INDIANAPOLIS — After months of debate, Indiana lawmakers prevent a state shutdown, agreeing on a final compromise budget with just hours to spare.

The final vote came down in the Indiana Senate just before 7 p.m. Tuesday, five hours before the state's current budget was set to expire.

Governor Mitch Daniels signed the new bill into law about an hour later, putting an end to the threat of Indiana's first government shutdown in more than a century.

The bill's chief architect called it the best compromise possible, particularly on the one main sticking point: funding for education.

"They got more increase per child — enormously more increases per child. The suburban schools are facing the same crisis. I think we spread the pain levelly to everybody," said Republican Sen. Luke Kenley of Noblesville.

In northern Indiana, that pain is actually a gain. Under the plan, schools across the area will see a funding increase of 1.2%, including $4 million more for South Bend, $300,000 more for Penn Harris Madison and $5,000 more for Mishawaka.

Democratic South Bend Senator John Broden, who voted against the plan, argued "looks" can be deceiving.

"One, they don't keep up with inflation. And two, they don't outweigh the money they'll be losing to the property tax caps. They all come out losers in that regard," Broden said.

It was a sentiment many House Democrats shared earlier in the day. Some, like Mishawaka Democratic Rep. Craig Fry, called the plan an "embarrassment." He says it gave some students more than others.

"For those of you who intent to vote for it on my side of the aisle, I'm sorry," Fry said.

Even the bill's harshest critics admitted there was movement from both sides.

"Yes, it is a Republican flavored budget. The bad taste has been watered down a little bit," said House Speaker Pat Bauer of South Bend.

In some cases, a lot.

House Republicans agreed to a $54 million increase in funding for K-12 education in exchange for a deal to keep at least $1 billion in reserve funding intact.

That was enough to convince 14 Democrats to support the two-year spending plan in what became a 62-37 final vote.

"It's unfortunate that it took six months to accomplish, but Indiana has a tremendous win for Hoosier taxpayers today," said House Minority Leader Brian Bosma.

With the overtime clock now stopped, Indiana lawmakers are left to reflect on what some have called the toughest budget compromise in state history. The question now: how to avoid a repeat performance in two years.

Governor Daniels issued a statement shortly after signing the budget bill into law.

He called it a "compromise that has its defects," but one he can support because it limits spending without a tax increase while protecting the state's revenue surplus.