The compromise - a concession to business leaders who had balked at the early time frame - will save the city $3.5 million in election costs, though board President David Chiu said there could still be a special ballot in July.

The announcement came just five days after Chiu convened a series of meetings with city officials, business and labor interests to hash out a budget compromise. The city is facing a $576 million deficit for the fiscal year beginning July 1, and labor had been pushing the supervisors to schedule the election to put a number of tax increases before voters.

Chiu said Friday that the agreement gives city leaders time to negotiate a budget package tolerable to all sides.

"The really good thing is everyone is starting to sit down face-to-face to figure out how we can all share the burden," Chiu said.

In a statement, Chamber of Commerce President Steve Falk and San Francisco Labor Council Executive Director Tim Paulson said the package will probably include spending cuts, new revenues and some budget reform, though they did not offer details.

Mayor Gavin Newsom's press secretary, Nathan Ballard, also praised the delay, saying it will allow time for the mayor's economic stimulus plan to move forward. That plan includes no-interest loans for small businesses and a payroll tax credit for new or expanding businesses.

Newsom, who has been meeting with both sides individually and is attempting to wrestle $90 million in wage concessions from labor, announced Friday that he had reached a deal with the union that represents 126 nursing supervisors. They agreed to reduce their upcoming wage increases, which will save the city $913,000 over the next year and a half.

E-mail Marisa Lagos at mlagos@sfchronicle.com.

This article appeared on page B - 2 of the San Francisco Chronicle