State lawmakers settled on a tentative agreement that would raise the state's minimum wage to $9 an hour as part of the $136.5 billion budget.

After a private conversation Monday morning, Senate Republicans — who had previously described a wage hike as a "job killer" — said they could settle on a spending plan that included an increase paired with tax credits for individuals and small businesses.

The wage boost would be phased in over three years, from $7.25 to $8 an hour by Jan. 1, 2014, then to $9 by Jan. 1, 2016.

It won't be indexed to inflation, a mechanism that would take future increases out of the hands of lawmakers.