By Corrie MacLaggan

AUSTIN, Texas (Reuters) - The Republican-controlled Texas Senate approved a two-year budget bill on Wednesday that calls for a 7.7 percent increase in state spending over the previous cycle, restoring some cuts made to education and mental health services in 2011.

The vote was 29 to 2, with two Democrats voting no. The measure proposes nearly $94.1 billion in spending and now goes to the House, which also has a Republican majority. The total proposed budget, including federal funds, is $195.5 billion, a 2.9 percent increase.

The budget for the fast-growing state "is a model of fiscal conservatism that holds spending below inflation and population growth yet still funds our state's priorities," said Lieutenant Governor David Dewhurst, a Republican who presides over the state Senate.

The measure passed after hours of discussion that was less contentious than in 2011, when lawmakers cut $4 billion from schools. The new budget -- for 2014 and 2015 -- includes an additional $1.4 billion for schools.

Democrat Wendy Davis said she voted against the bill because it provided too little for schools.

"This budget fails Texas children," Davis told her colleagues.

The bill adds $240 million to reduce waiting lists for mental health and substance abuse programs, an infusion that came in light of questions about mental health funding following recent school shootings, said Senator Tommy Williams, chairman of the Senate Finance Committee.

In December, a gunman shot dead 20 children and six adults at an elementary school in Newtown, Connecticut.

The proposal includes an additional $66.8 million for wildfire prevention. In 2011, the most destructive wildfire in Texas history burned 34,000 acres, destroyed 1,600 homes and killed two people east of Austin.

The proposed budget also provides for pay increases for high-turnover state jobs such as Child Protective Services caseworkers.

(Reporting By Corrie MacLaggan; Editing by Daniel Trotta and Leslie Adler)