HARRISBURG -- Lawmakers made a modicum of progress toward a state budget agreement during a long day of negotiations that wrapped up at midnight.

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Discussion is expected to continue today, six days into the new fiscal year.

If a deal doesn't come together in the next three days, 24,000 state employees -- a third of the work force -- could be furloughed as soon as Monday. The furloughs would force state parks, casinos and motor vehicle licensing bureaus to close.

Agencies and employees essential to public health, safety and welfare would not be affected.

"We had a productive discussion, but no agreements were reached," Senate Majority Leader Dominic Pileggi said after a late-night session with caucus leaders and high-ranking administration staffers.

A deal could be reached by Sunday, in time to avert furloughs, he said. Final passage would come next week, but a handshake agreement would be enough to prevent furloughs.

Leaders of other caucuses declined to speak with reporters after last night's meeting except to say they would continue their talks this morning.

Gov. Ed Rendell proposed a $27.3 billion general-fund budget, which was passed by the Democrat-controlled House. The Republican-controlled Senate rejected that budget and proposed its own, shifting spending and cutting $300 million from the House version.

Democrats, including Mr. Rendell, refuse to forge a budget agreement unless the GOP agrees to several proposals not directly related to the general fund. They would add an electricity-use fee, promote energy conservation, fund alternative energy projects, expand the scope of practice for nurses and other health practitioners, make Interstate 80 a toll road and borrow money for roads, bridges and mass transit.

Senate Republicans said they would not address those issues until there is a budget agreement.

"It's July 5. We don't have a budget even in concept," Mr. Pileggi, R-Chester, told reporters yesterday afternoon. "It would be irresponsible for us to spend all day on July 5 and then July 6 talking about health care or energy.

Republicans during the late-night meeting agreed to keep the governor's other agenda items on the table, but not how or when to deal with them, Mr. Pileggi said.

Mr. Rendell said the best chance he has to get those issues passed is now, while he can use the budget as leverage. He isn't afraid to use the threat of furloughs, either.

"We've tried in every way we can to protect our workers [by continuing their health insurance through furloughs and providing information about unemployment compensation], but sometimes a principle is the most important thing," Mr. Rendell said.

He sees the furloughs as comparable to a 40-day transit strike he withstood in 1998 as mayor of Philadelphia. Hundreds of employees were out of work and countless commuters were inconvenienced, but the strike resulted in new work rules and reduced the cost of mass transit operations, he said.

"There are some things that are worth some temporary pain," he said.

Republicans say that pain should not be inflicted needlessly.

"There is only one person in the state that can stop the furloughs: the governor," said Senate Pro Tem Joe Scarnati, R-Jefferson. "The furloughs and shutting down state government is not necessary."