House Democrats said that they felt a budget deal was within reach on Friday, but that Republicans departed before an agreement was reached. Yesterday's scheduled talks were put off.

"We were on the 20-yard line, heading for the end zone," House Majority Leader Bill DeWeese, (D., Greene) said on the House floor yesterday. "There was a fumble, and now we're on the 29- or 32-yard line."

Nevertheless, all sides pledged to meet again today in an effort to hash out differences over Gov. Rendell's $28.3 billion spending plan and avoid another furlough of state workers.

Even if a deal is reached, the state is virtually certain not to have a budget approved by the beginning of the fiscal year on July 1 for the sixth year in a row. But all the parties agreed that even at this late date employee furloughs could still be avoided.

"I am confident that by June 30 that we will have a handshake deal," said Rendell's chief of staff Gregory Fajt. "There is a real desire on the part of everyone in this building to be out by July 4."

Fajt said the governor would not order the furlough of up to 25,000 workers if the framework of a deal is in place. Fajt said he believes such a framework exists.

"The issues that divide us are not insignificant, but the issues that divide us are not insurmountable," he said.

A budget stalemate last year led to a one-day furlough of 24,000 state workers, and the shutdown of state parks and driver's license centers.

House Appropriations Chairman Dwight Evans (D., Phila.) said Republicans ended talks Friday amid a dispute over $291 million in additional education funding.

Evans said Democrats have identified $600 million in budget cuts, pledged to preserve the state's Rainy Day Fund, and proposed no new taxes.

But he said they would draw the line on education funding - which provides the largest increase in education funding in two decades.

"I will protect the $291 million for education," said Evans, who returned to Philadelphia after talks broke off. "That is non-negotiable."

Fajt agreed.

"We are rock solid with Dwight," he said.

Sen. Dominic Pileggi (R., Delaware) said Republicans objected to a school-funding formula that was consistent everywhere in the state except Philadelphia, where schools are slated to receive an additional $34 million.

He also charged the administration with failing to present a balanced budget.

Fajt conceded there was a budget gap, but said administration officials told Senate Republicans on Friday that they could find a way to "bridge the gap."

Pileggi said disagreements remain over how much to reduce overall spending and how much the state should borrow for energy conservation and clean-energy programs.

Evans said Democrats will scrap their plan to tap the $744 million Rainy Day Fund if the annual contribution to the fund this year - about $130 million - is directed into the general fund.

Rendell's budget increases overall spending by 4.2 percent. Republicans are trying to shave that number down to the 3 percent range.

"We are fighting to keep spending below what the governor presented and fighting to preserve the Rainy Day Fund," said Steve Miskin, spokesman for House Minority Leader Sam Smith (R., Jefferson).

Senate Majority Appropriations Chairman Gibson Armstrong (R., Lancaster) said he is concerned that spending increases in the current economic climate could lead to a budget shortfall like the one in 1990 that prompted major tax increases.

"That is unacceptable," he said.

Evans' spokeswoman, Johnna Pro, said Democrats are mindful of the tough economic times, but are unwilling to cut as deeply as the Republicans want in areas that would affect children or harm the elderly or disabled.

Pileggi said the major health-care-coverage proposals - Rendell's plan to expand state health-insurance programs for the uninsured and a competing plan promoted by Senate Republicans - are off the table until the fall.