ALBANY -- More than four months late, the state budget was finally approved Tuesday night after a Western New York senator retreated on his vow to withhold his vote until a new financing measure was approved for the state university system.

The approximately $136 billion budget, including about $1.5 billion in new taxes and fees approved Tuesday, is for the fiscal year that started April 1.

Passage of the stalled budget bill was assured after Sen. William T. Stachowski, a Lake View Democrat, dropped his monthlong threat to hold back his crucial vote until a deal emerged on a bill he had called a must-do for the University at Buffalo and the region's economy.

He backed down several hours after the Assembly left town following a brief, one-day session without agreeing to the state university bill.

Stachowski said his budget vote is not a retreat because Senate Democratic leaders say they have reached a "framework" of a deal with the Assembly on a state university bill. But the three-paragraph announced deal -- made by the Senate shortly before the budget vote -- produced no details.

"My whole point was to get them to negotiate an agreement that gets SUNY moving forward -- and that's what this does," Stachowski said.

Democrats who control the Assembly agreed there is some sort of agreement on SUNY, but acknowledged no aspect of the issue has been resolved.

"All the details are still being worked out," said Sisa Moyo, a spokeswoman for Assembly Speaker Sheldon Silver.

But one Assembly Democrat said Silver should not be believed. Assemblyman Mark Schroeder, a Buffalo Democrat, blamed Silver, a Manhattan Democrat, for killing the bill. "The impact is that the SUNY community, upstate New York in particular, and Western New York especially, is thrown right out the window," Schroeder said.

Schroeder had predicted Silver would OK announcement of a "tentative" deal; he said Assembly Democrats were told by Silver to return to Albany in September -- after the party primary elections in the Legislature -- to take up an unknown package of bills.

But Schroeder said Silver had earlier promised the SUNY bill would be approved if the SUNY chancellor supported the measure; Schroeder said the chancellor, Nancy Zimpher, and the SUNY board had backed the measure, but Silver still rejected the plan.

"The speaker has contempt for Western New York," Schroeder said.

A spokesman for Gov. David A. Paterson would only say the sides had a "productive" negotiating session Tuesday, and that the governor is "hopeful" for a deal at some point.

Earlier, Democratic leaders in the Senate could not even get a symbolic, one-house SUNY bill through their house. They had to pull the bill from the floor -- two times -- when not enough senators would even vote for what lawmakers called a face-saving attempt to approve a version of the SUNY bill proposed by Paterson.

The state university system, in a plan first pushed two years ago by UB, wants to let campuses raise tuition annually -- there were different percentage levels on the table -- and to keep the added revenues instead of the money going to the state's general fund. SUNY officials say the current tuition system -- large spikes that generally occur when the state's economy is lagging -- is bad for university planning and students' wallets. The measure would have also made it simpler for campuses to enter into private business deals or to lease land.

For UB, the measure was its singular push at the Capitol. Officials saw it as the tool to help it deliver its ambitious UB 2020 plan, which includes a major expansion to downtown Buffalo. UB officials did not have an immediate comment.

But critics in both houses say the Legislature should not give up its authority to approve tuition hikes, and that the SUNY plan would have hurt low- to middle-income families trying to afford the annual tuition hikes.

"We held it as long as we can," Stachowski said earlier in the day. He said he was not going to be responsible for the latest-ever state budget, a record that now stands at August 11. Stachowski had leverage because he is one of 32 Democrats and 32 votes are needed to pass bills; Republicans refused to go along with the revenue bill, saying they would not back its tax hike components.

Senate Democratic officials insist the SUNY talks would never have happened unless Stachowski made his line-in-the-sand threat to hold up the budget adoption. Backers had used the last budget bill -- a revenue-raising measure worth about $1.5 billion -- as leverage to try to move the Assembly to drop its opposition to the SUNY measure.

Stachowski said he gave SUNY and government leaders five weeks to work out a deal. "And every time we seem to get almost to where we get something done, one of the parties blows it up, or somebody really doesn't want to get something done," the lawmaker added.

The spending portion of the budget was already approved. The final revenue-raising piece OK'd Tuesday by the Senate had already passed the Assembly.

The revenue bill will have two immediate effects: it will raise taxes on assorted activities, people and businesses and it will permit the Legislature to get paid for the first time since the fiscal year began April 1 without a budget in place.

Senate Republicans, trying to retake control of the chamber this fall after two years out of power, sought to use the chaos Tuesday as evidence that Democrats should be reverted to their minority party status.

Senate Minority Leader Dean Skelos, a Long Island Republican, noted the new budget cancels tax breaks for upstate and Long Island businesses but increases incentives for movie industry productions mostly in New York City.

The bill approved Tuesday ends the current tax-free sales on clothing and shoes valued under $110 -- a move worth $330 million to the state. It puts off about $100 million in various business tax breaks, cuts charitable deductions on wealthy filers, raises civil court filing fees, and anticipates more gambling revenues by permitting racetrack casinos to be open 20 hours a day.

Both houses made some last-minute tax changes, including dropping a tax hike plan on hedge fund executives living out of state -- expected to be worth $50 million -- over fears it would cause their companies to relocate to Connecticut and other nearby states.

Both houses also passed a measure creating a contingency fund, valued at nearly $1.1 billion, to permit cuts to be made to the already-approved spending portion of the 2010 budget to prepare the state in case it does not get an expected increase in federal Medicaid reimbursement funding.

The contingency plan lets Paterson cut funding to a variety of programs, from schools to health care, beginning in September; not affected will be funding for public assistance, debt and court judgments.

tprecious@buffnews.comnull