ST. PAUL, Minn. (AP) - A Minnesota budget awaiting action by Gov. Tim Pawlenty caps college tuition increases, leaves funding static for K-12 schools and delays payments to ethanol producers.

Lawmakers hustled key elements of the two-year budgets through Wednesday, leaving Pawlenty to decide whether to enact it or send parts back for more work. Regardless, the budget isn't done because the GOP governor and DFL-led Legislature haven't come up with a way to bridge a gap of $1 billion or more.

"It's clear this comes down to a series of choices," said House Speaker Margaret Anderson Kelliher, DFL-Minneapolis, adding, "Now we await a further conversation with the governor. We have been listening to Minnesotans; we think it's time the governor is responsive to the same Minnesotans that we've heard from."

House Minority Leader Marty Seifert, R-Marshall, said a combination of aid reductions to local governments, further health cuts, accounting shifts and some borrowing could be the way out.

Pawlenty scolded legislators for moving ahead without a deal on revenue to cover the spending. He and top DFLers are $3 billion apart if they don't do an accounting shift for school payments and dip into reserves. If those two steps are taken, $1 billion separates them.

"Before we commit to the state to write checks from the public checkbook, I need to know how you intend to cover the $3 billion hole in your plan," Pawlenty said in a letter to Democrats.

Still pending is a backup plan: The House voted 88-46 Wednesday for a lights-on bill that would keep state agencies operating at current levels past June 30 if lawmakers fail to enact a budget by then. The bill needs further Senate action before going to Pawlenty.

Democratic House Majority Leader Tony Sertich said the aim still is to complete the budget on time.

"But as the Boy Scouts say, we should always be prepared," said Sertich, DFL-Chisholm.

Republicans objected, saying that continuing current appropriations for up to a year would drain the state treasury, which is running $4.6 billion short over the next two years. Most agencies would get more money than they would if the budget bills were enacted.

"This isn't a lights-on bill. This is putting the state on a dimmer switch until finally it is dark," said Rep. Sarah Anderson, R-Plymouth.

Several other House Republicans asked Pawlenty to veto the remaining budget bills until he and top Democrats agree on how much to spend in the two-year budget. On Tuesday, Pawlenty and Democratic legislative leaders had their first face-to-face talks in weeks.

"Let's get a deal worked out for the entire budget," said Rep. Paul Kohls, R-Victoria.

Pawlenty has until Thursday to act on spending for health and welfare programs and a second economic development bill. Pawlenty vetoed the first version because it would have forgiven part of a loan to St. Paul for the Xcel Energy Center complex. His deadline on a package for the courts, prisons and state law enforcement is Friday.

There were final votes Wednesday on five major budget bills.

The House kicked things off with a rare show of bipartisan harmony, unanimously passing a spending bill that cuts agricultural programs to spend more on veterans and military programs. The bill also redirects $6 million worth of ethanol subsidies.

"It's as close to perfect as we're going to get," said Sen. Jim Vickerman, DFL-Tracy.

A K-12 plan, containing about $14 billion in all, got through on more-splintered votes - 85-49 in the House and 49-16 in the Senate. Schools wouldn't see their allowances drop, but they wouldn't go up either. Some education groups are warning of teacher layoffs and program cuts.

"We know there is not enough money here. Schools are cutting because we haven't kept up with inflation since 1991," said Rep. Mindy Greiling, DFL-Roseville.

Republicans said they were anticipating a veto.

Both chambers easily passed legislation trimming budgets 2 percent for public colleges and universities, cuts eased by federal stimulus dollars. The bill aims to keep University of Minnesota and Minnesota State Colleges and Universities tuition from going up more than about 3 percent a year, or $300 at the University of Minnesota.

"We were able to buy down much larger cuts," said Sen. Sandy Pappas, DFL-St. Paul.

The bill also would block the University of Minnesota from using state money for human cloning research and require college bookstores to sell U.S.-made clothing if possible. It includes a provision requiring the university to offer alcohol sales throughout the new football stadium, instead of just in premium seats.

The Senate approved a state agency bill cutting spending on the Legislature, Pawlenty's office and the Management and Budget Department. It was due up later Wednesday night in the House.

Meanwhile, a $308 million construction projects bill cleared the Legislature on lopsided votes. The package would borrow money to fix up higher education buildings, build flood mitigation projects in the Red River Valley and qualify for federal dollars for intercity rail projects.

"That's going to go a long ways toward protecting the Red River Valley from future flooding," said Rep. Paul Marquart, a Democrat from Dilworth, a community in the flood area.

The bill also has a grant for Hugo, struck by a tornado a year ago, and aid for St. Charles schools that have lost students since last month's fire in a meat processing plant.

Opposition came from Republicans who said the spending was too much. Rep. Dean Urdahl of Grove City said he expects Pawlenty to trim the bill using the line-item veto.

(Copyright 2009 by The Associated Press. All Rights Reserved.)