State House and Senate budget negotiators agreed last night to use federal stimulus money meant for public education to help offset spending cuts to the state Department of Education rather than use the money to help close the state's budget deficit, as Gov. Linda Lingle has suggested.

The agreement, part of the state's two-year budget, puts majority Democrats and the Republican governor significantly out of tune over state spending.

The state could receive $192 million in state fiscal stabilization funds from the federal economic stimulus package — $157 million intended for public education and $35 million for other government services.

Lingle wants to use most of the federal education money for the deficit — including $90 million this fiscal year — while educators and lawmakers want the federal funds to help the department absorb state spending cuts that total about $94 million a year over the two-year budget.

"It helps us use the flexibility that was intended to be there with the passage of the stabilization funds," said Pat Hamamoto, the state schools superintendent. "For us, this is really a way to continue doing what we're doing."

Members of the state Board of Education, and U.S. Rep. Neil Abercrombie, D-Hawai'i, and U.S. Rep. Mazie Hirono, D-Hawai'i, have warned that using the federal education money for the deficit may conflict with at least the spirit of the stimulus package approved by President Obama and Congress.

The Lingle administration did not comment last night, but Georgina Kawamura, the state's budget director, has said that the administration's plans for the federal education money are necessary because of the budget deficit.

Linda Smith, the governor's senior policy adviser, has also indicated that Lingle is prepared to use her discretion to implement the state budget and may disregard some of the lawmakers' work. The governor, for example, has said she would veto bills that would increase income taxes on the wealthy and the hotel-room tax, which lawmakers have passed to help with the deficit.

Lingle is also negotiating with government labor unions on an estimated $278 million in labor savings.

State Sen. Donna Mercado Kim, D-14th (Halawa, Moanalua, Kamehameha Heights), one of the lead budget negotiators, said it may not be easy for the governor to ignore lawmakers' intent for the federal education money. She said lawmakers believe the federal funds were meant to help stabilize public eduction as states restrict spending during the recession.

"She can restrict it. She can try to move things around, but there are going to be pukas," Kim said. "I'm not sure how she is going to deal with that many pukas. It would be a domino effect."

Public education accounts for more than $2 billion a year in state spending, 41 percent of the state's general-fund spending and a quarter of the state's overall operating budget.

The state Board of Education and the Lingle administration agreed to $40 million a year in spending cuts over the two-year budget and the administration has imposed roughly $11 million more in spending restrictions. House and Senate budget negotiators last night agreed to an additional $43 million a year, bringing total spending cuts to about $94 million a year over the next two years.