The Ho-Chunk tribe agreed Wednesday to pay the state $60 million immediately to resolve a gambling compact dispute that left a huge hole in the state budget.

That payment is $12 million less than the state said it was owed, but the deal was praised as the end of a long court fight that left lingering questions about the health of the budget.

"With this compact, we can now put these disputes behind us and work together in the future," said Department of Administration Secretary Michael Morgan.

The state will take $1.5 million from the $60 million to cover attorneys' fees to the firm that worked the case. Going forward, the tribe agreed to pay the state 5 percent on winnings — or revenue after payout — at its casinos that are below $350 million. Anything above that and payment to the state will be 5.5 percent.

Under the old compact, the tribe would have paid a 6 percent tax on its winnings. Under deals the state has with other tribes operating casinos, the Potawatomi make payments at 6.5 percent of winnings and the Oneida pay 4.5 percent, increasing to 5.5 percent when winnings are above $350 million.

The Ho-Chunk operates casinos offering Las Vegas-style games in Baraboo, Black River Falls, Nekoosa and Tomah. A new casino is opening next month in Wittenberg. It also runs a bingo parlor in Madison.

Its new deal can be renegotiated after 25 years.

"While neither the Ho-Chunk Nation nor the state got everything we asked for, we are happy that this matter has come to a long anticipated conclusion," said Ho-Chunk Nation President Wilfrid Cleveland.

The deal was finalized after both sides worked with an arbitrator as ordered by a federal judge in June.

"The federal arbitration was thorough and let both parties work toward this conclusion," Gov. Jim Doyle said in a statement. "The agreement is in line with other gaming compacts we have in Wisconsin and allows us all to move forward."

The co-chair of the Legislature's budget-writing committee, Rep. Kitty Rhoades, of Hudson, said it was good to have the dispute resolved.

"Now we know where we're at," she said. "It's somewhat predictable. It's not the ongoing question of 'Are we going to lose even more.' Resolution is good."

The state sought payment from the Ho-Chunk under a gambling compact Doyle signed with the tribe in 2003. The compact gives the tribe perpetual gambling rights and additional games in exchange for much larger payments to the state.

The tribe argued that it owed nothing following a state Supreme Court ruling in 2004 invalidating a similar compact with the Forest County Potawatomi that expanded gaming.

The Ho-Chunk stopped paying the state annually in 2004, though it made a one-time $30 million payment in 2006 that it said was done to show it was negotiating in good faith.

There was more good news for the budget on Wednesday. The state Department of Revenue reported that preliminary tax collections for the last fiscal year were $173.1 million more than originally projected, but about half of that was due to tax returns being processed faster than in the past.

How those numbers, along with the new Ho-Chunk deal, affect the budget will be outlined in a report due Oct. 15 from the state.