By Eric M. Johnson

SEATTLE, June 30 (Reuters) - Washington state lawmakers approved a two-year budget late on Friday, hours before a midnight deadline that would have triggered a shutdown of government agencies.

The $43.7 billion operating budget, which includes a $5.2 billion revenue increase paid for in part with new taxes, was approved by both chambers of the legislature.

Governor Jay Inslee, a Democrat, has already signaled he intends to sign the spending bill into law before midnight to prevent the closure of many state agencies and the layoff of thousands of employees.

Apart from funding government operations, the budget adds about $1.8 billion in new funding for K-12 public schools over the next two years and promises $7.3 billion total over four years, according to a summary of the legislation.

It was not immediately clear whether the education funding increase would satisfy a 2012 order by the state's Supreme Court that found the state was failing to fully fund basic education in violation of its own constitution. The court gave lawmakers a deadline - the first day of school in 2018 - to lay out a credible plan to fix the problem.

The spending legislation was approved in the Senate 39-10 and in the House 70-23, according to the office of Senator Mike Padden, a Republican.

(For specifics of the budget see: http://bit.ly/2taF0Li)

(Reporting by Eric M. Johnson in Seattle; Editing by Leslie Adler)