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What if during the renewal of the compromise of 1867 the Austrians made a major deal with the Hungarians? There would be no combined army anymore, rather, each part of the empire would have its own army and would fund that army separately. I know that sounds ASB given the Habsburgs hatred of the Hungarians and their fear of another 1848, but this would be the only way to prevent them from vetoing all military spending on the army and allow for a fully funded, staffed, and modernized force. The major caveat would be that the Imperial AND Royal (Austrian and Hungarian) armies would fall under Habsburg control. The general staff would still control the entire military force in wartime and still have inspection rights and nominal control over the Royal Hungarian army in peacetime. Equipment still needs to be standardized, but the Hungarians are able to train and organize their forces as desired.

This means that each half of the empire could fund its own projects, be they build arsenals for the Hungarians, or build rail in Galicia and Bosnia for the Habsburgs. Given that the Hungarians are going to want to have a powerful army of their own, I assume they will fund it well, especially given the troubles coming the next decade.

Would such a force be better equipped and prepared to fight WW1? I assume it will be bigger and better trained (reforms are able to be carried out without political interference) and most likely better equipped with more military rail infrastructure built in Galicia and Bosnia. Also, there probably would be a modern artillery force with more shells being available. As a result, less time and resources need to be wasted building up production infrastructure during the war. The navy is probably quite a bit smaller, given that military funding is going to be pumped in to the army and the navy is not a compromise funding solution. Sure there will be dreadnoughts, but there will not be shipyards built from scratch in Croatia to appease the Hungarians and there won't be a large transfer of manpower from the army to the navy to sustain the expansion.

Thoughts?

Edit: The Austrian regular army would be around 35 divisions plus 6 cavalry divisions. The Hungarian army would stand at 25 divisions with 5 cavalry divisions. There would be an additional Bosnian corps, funded and controlled by the Austrians (after 1908). Each division on both sides of the empire would have a field artillery regiment made up of 5 batteries of 6 guns and a howitzer regiment made up of 3 batteries of 6 guns. The corps artillery would be an artillery brigade of heavy howitzers-6 batteries of 150mm howitzers. Together the combined army of AH would have 48 of 305mm Skoda mortars broken into 2 gun batteries.
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