A increase in the cap on charter school enrollment in Massachusetts would be tied to major new investments in all public schools starting two years from now under a proposal released Thursday by Senate leaders that could serve to heat the debate over charter schools.

The bill would link a 5 percent increase in the cap over the next 10 years to a commitment from the Legislature starting in fiscal 2019 to fully fund a new foundation budget formula for all public schools that would cost an estimated $203 million to $212 million annually. Failure to fully fund the higher foundation budget by the Legislature would result in a proportional decrease in the number of new students that could enroll in new charter schools, senators said.

"We are putting forth legislation today that, very importantly at a bottom line, puts forth tens of thousands of new seats in innovative classrooms targeted at districts that are struggling the most," said, Sen. Sonia Chang-Diaz, a Jamaica Plain Democrat and co-chair of the Education Committee.

Chang-Diaz, along with Sens. Dan Wolf, Karen Spilka and Patricia Jehlen, spent the past two months working to craft a charter school bill that could pass that branch by satisfying both proponents and opponents of charter schools. The Senate aims to debate and vote of the legislation next Thursday, but its fate both within the Senate with the House and governor remain uncertain.

The bill is also sure to provoke strong reaction with the charter advocacy community who are pushing a ballot question that would allow up to 12 new charter schools a year outside the cap without any of the new regulations or spending caveats contemplated in the bill.

"This is not a reform bill. It is designed to freeze the growth of public charter schools across the state, and it imposes onerous new regulations that will shackle the operation of existing charter schools," Marc Kenen, executive director of the Massachusetts Charter Public School Association, said in a statement.