AUSTIN – As lawmakers late Thursday put finishing touches on a budget agreement that approaches $140 billion, some of the conservative activists who dominate Texas GOP politics angrily began calling for some fiscal handcuffs.

The reason: The two-year budget has been spread across two bills that call for spending 19.1 percent more than the lean budget the Legislature passed last session.

Budget writers, including Sen. Steve Ogden, R-Bryan, defend the document, saying it addresses priorities without being extravagant. Mr. Ogden attributed much of the increase to an unusual growth in federal aid during the last two years.

Gov. Rick Perry, who will face re-election next March, has warned lawmakers to restrain spending a bit.

Perry 'concerned'

"He absolutely is concerned," said Perry spokeswoman Kathy Walt.

But Mr. Perry is also asking budget writers to double their funding of his deal-closing, job-creation funds, to $600 million. (It appears he'll get $380 million, if energy prices remain strong.)

The governor has tried to provide lawmakers with some cover by complaining about a spending spike in Medicaid, the federal-state health care program for the poor, disabled and elderly.

"He recognizes the huge impact that Medicaid has on our budget, and that's why he has talked about the need for Congress to address this issue," Ms. Walt said.

Cal Jillson, a political science professor at Southern Methodist University, predicted that Mr. Perry will escape major political damage from accusations about budget bloat.

"He's got two things he really can say: 'It would have been worse without me, I held them back as best I could.' And secondly, 'After they left town, I cut some of these big spending items right out of the budget,' " Dr. Jillson said.

Veto predicted

The governor can veto specific items in any spending bill that contains multiple appropriations. Dr. Jillson predicted that Mr. Perry will wield that power with a flourish before June 19, the veto deadline.

"After the Legislature has left town, he can cross out some particularly visible items," the professor said.

Ms. Walt declined to discuss possible veto amounts, saying: "It's way too early to say."

In 2003, Mr. Perry vetoed $81 million from the budget and an additional $200 million in two spending bills that affected the comptroller's office.

Group wants limits

Peggy Venable, state director of Americans for Prosperity, a group that advocates limited government, said the budget betrays voters who thought "we were electing fiscal conservatives."

"Taxpayers across the state are concerned," she said. "They're seeing the state spending increase disproportionate to how their paychecks are increasing."

Ms. Venable said her group and others will promote a constitutional amendment to cap state spending.

"I certainly see a groundswell of support for curtailing state spending ... to something like population and inflation," she said. "We plan to fuel that groundswell."

Sen. Eliot Shapleigh, D-El Paso, a member of the Senate's budget-writing panel, said the new spending is justified.

"Half the [new] spending this session is restoration of the cuts from last session," he said.

"Those extreme measures last year are influencing how the budget's viewed this session, and the conservatives miss the point," he said. "The point is to meet the needs of a growing and diverse state."

In 2003, lawmakers grappled with a $10 billion budget shortfall. They cut social programs deeply before passing a $117.4 billion spending blueprint. For the first time since World War II, spending from state tax revenues remained flat.

Budget defended

Rep. Leo Berman, R-Tyler, a critic of spending on social programs, said conservative groups are wrong to label the 2006-07 budget as excessive.

"People have criticized us for not spending CHIP dollars," he said, referring to the Children's Health Insurance Program, which is designed to cover youngsters in families that make too much to qualify for Medicaid but can't afford private insurance.

"Well, we're spending CHIP dollars now," he said. "And we're drawing down a lot more federal funds. ... You draw down as much as you possibly can."

Mr. Berman said a better measure of budget growth would be to exclude federal funds and just consider the spending of state tax revenues. That would show a more moderate rate of growth – though also in double digits.

Some budget experts, though, say watching the outflow of general state revenues is no longer a reliable gauge of spending.

They argue that lawmakers have reclassified much of the spending they used to label as coming from state tax revenue. For instance, the budget-writers now credit costs of transporting Medicaid patients, rural school buses and workforce development efforts, as well as more than 90 percent of DPS costs, to the highway fund, a separate account.

Some argue that the $140 billion is not nearly enough.

Federal aid for Medicaid and special education rapidly increased in the last two years, said Eva DeLuna Castro, a budget analyst with the Center for Public Policy Priorities. It advocates more education and social spending.

She said Texas ranks 50th in state spending per capita, and "if you add in local spending with the state's, we're in 41st place."

Ms. DeLuna Castro said that, just to keep up with population growth and inflation, the budget has to spend at least $134 billion.

"Texas is a nice place to live if you don't want to pay taxes," she said, "and if you have your own private museum and your own private set of books and don't need to go to the library, and you don't ever need to use public transportation."