HARRISBURG -- It took them four days longer than it was supposed to, but late yesterday the state House and Senate finally approved a $28.2 billion spending package for the fiscal year that started Tuesday.

"Everybody's not going to get what they want," said House Appropriations Chairman Dwight Evans, D-Philadelphia. "You've got to make choices, and I think we made excellent choices."

Public schools are the big winners in the budget, getting an unprecedented $274 million increase. That includes $8.3 million for Pittsburgh Public Schools, 5.77 percent more than last year.

Public welfare spending will rise $695 million, or 3 percent, while spending in most other areas will decrease by about 1.3 percent.

The budget also includes new funding for infrastructure improvements, water and sewer projects and alternative energy.

"For us to be able to make those types of investments without raising taxes makes this a very good budget indeed," Gov. Ed Rendell said last evening before signing the budget bill into law.

Overall, the budget is $1.1 billion, or 4 percent more than the fiscal year that ended Tuesday.

The Senate approved the budget 49-1 with Sen. John Eichelberger, R-Blair, opposing. The House vote was 170 to 32, with all but one of the no votes coming from Republicans.

Opponents of the budget bill were concerned that the budget calls for borrowing that would raise debt payments by almost $50 million, or 5 percent.

"The debt increases of today are the tax increases of tomorrow," said Daryl Metcalfe, R-Cranberry. "There's over a billion dollars in new spending, and we're saying this is a good budget?"

Mr. Rendell said the state's debt ratio is strong and interest rates are down, so it's the perfect time to borrow.

"We need to act now to repair our infrastructure now, and anybody with any common sense would have to agree with that," he said.

Rep. Vince Biancucci, D-Aliquippa, supported the budget and lauded its $650 million investment in alternative energy.

"This year's state budget is symbolic of our commitment to truly break free of our independence on foreign oil and unstable energy by instead investing in the people and businesses that can expand Pennsylvania's homegrown energy production," he said.

Enacting the 2008-09 state budget four days late actually ties the Legislature's speediest budget action during Mr. Rendell's administration. Four years ago a new state budget also was enacted on July 4.

Previous budgets have been given final approval later in July under Mr. Rendell, who's been governor since January 2003. Final action on the 2003-04 budget didn't come until almost Christmas of 2003.

"It is always a relief to pass the budget, particularly under these [economic] circumstances," said Sen. Jake Corman, R-Centre. "I am concerned with the borrowing, but not even that could be helpful for this economy."

Each year the budget debate is slowed by friction between Mr. Rendell, a Democrat and former mayor of Philadelphia, and conservative Republicans who control the Senate. Many of them are from small and rural towns located far from Philadelphia, and they often complain that Mr. Rendell likes to spend and borrow too much money.

In order to prod the Legislature into action, Mr. Rendell had warned he would furlough, without pay, about 25,000 "non-essential'' state workers if a budget weren't in place by Tuesday, the start of the 2008-09 fiscal year.

That threat was averted, but some lawmakers say another looms. In the last four months, state tax revenues have dropped off below expectations, due to the slowdown in the national economy.

Mr. Rendell downplayed those concerns, saying Pennsylvania's economy and unemployment rate are good compared to the rest of the country.

"There are reasons to be hopeful and optimistic," he said.

During budget talks, negotiators shaved $600 million off the governor's original proposal, but added about $500 million back in, mainly for operational costs for each of the four legislative caucuses. Also added back in were "legislative initiative grants,'' for projects in communities around the state, such as stadiums, parks, industrial plants etc.

The Commonwealth Foundation, a conservative think tank, said that even though the rate of spending increase for 2008-09 is less than in previous Rendell budgets, it's still too high.

If the national economic slowdown continues to erode state tax revenues, state officials will have trouble keeping the budget balanced, so spending must be better controlled, it said. Some observers fear that a year from now, the state could face a budget deficit or $1 billion or more.

"Now is the time to exercise serious fiscal restraint,'' the foundation said.

The budget calls for:

• Small budget increases for "state-related'' universities, such as Pitt and Penn State. Penn State will get a $4.1 million, or 1.2 percent, increase in state funding over its 2007-08 funding of $334 million. Pitt will get a $2.56 million, or 1.5 percent, increase, over its 2007-08 state funding of $168 million.

• Raising the debt ceiling on borrowing for redevelopment capital projects by $800 million. Some legislators criticized that move, saying it's akin to a family charging too much on their credit card.

• Slightly decreasing the original allocations for the state Gaming Control Board and three related agencies. The board, which has about 260 employees to oversee casinos, will get $33.3 million this year; state police, which station officers inside each casino, will get $16.7 million; the Department of Revenue, which monitors the gross revenue from each slot machine, will get $8 million; and the attorney general's office, which helps with background investigations, will get $925,000.

• Granting a $100 state income tax credit for 2008 for active volunteer firefighters and volunteer ambulance personnel,

One item that Senate Republicans and Mr. Rendell failed to reach agreement on was a bill for a five-year extension for the Pennsylvania Health Care Cost Containment Council, which does studies on hospital and medical costs. It went out of business Tuesday, causing the layoff of 43 workers, because the governor and senators couldn't agree on the exact wording of a reauthorization bill. The council could be reauthorized this fall.