HARRISBURG -- House Democrats are still feuding with Senate Republicans over an acceptable state budget for fiscal 2009-10, but Gov. Ed Rendell said he is optimistic that he and legislators of both parties can agree soon on a spending plan.

Mr. Rendell has called a special meeting for this morning at his residence here for legislative leaders of both chambers and both parties.

They will discuss a newly fashioned, Senate Republican budget plan of $27.8 billion, which is about $100 million less than the plan that was agreed to Sept. 18 by Mr. Rendell and leaders of three legislative caucuses -- Senate Republicans, Senate Democrats and House Democrats.

But last week, rank-and-file House Democrats, whose leaders had been a party to creating that budget, angered Senate Republicans by refusing to go along with some of its revenue proposals, such as a tax on arts groups' tickets and on small games of chance.

The latest proposal eliminates those two taxes, as well as a proposed tax on natural gas pumped from areas of Marcellus shale and an excise tax on cigars and smokeless tobacco. All four had been controversial and the topic of debate.

House Democrats and Senate Republicans have been fighting over those tax options in recent days. One reason the four tax ideas can be scuttled, Senate officials said, is that the bottom line of the new budget plan is $100 million less than the previous budget plan. Most of the spending cuts would come from the Department of Public Welfare, said Erik Arneson, a Senate Republican spokesman.

The state budget is now more than three months late and the governor and legislators are feeling pressure from the public to get it approved.

Mr. Rendell said, in a letter yesterday to legislators, "We are extremely close to having a budget agreement that not only we all can live with, but that reduces spending, holds down the level of new revenue and protects education, health care and economic development.

"Given the fact that many Pennsylvanians are not getting services they desperately need because of our budget impasse, I believe it is essential that we meet quickly to resolve our remaining differences."

The latest proposal from Senate Republicans, like the proposal informally agreed to on Sept. 18, includes $5.5 billion for basic education, an increase of $300 million over last year's budget. That funding was a point that Mr. Rendell had insisted on.

The new budget proposal could be voted on in the Senate as early as today and sent to the House.

Expanding gambling by adding table games to casinos is also in the bill, Mr. Arneson said, but the tax rate on table games won't be as high as 34 percent, as some legislators want.

Mr. Arneson also said the Senate's new spending package, called Senate Bill 1085, doesn't contain any "WAMs," or walking around money, a term sometimes given to special grants for legislators' pet projects. Last year, $300 million was allocated for such grants, and earlier 2009-10 plans have included $100 million.

It isn't known yet how House Democrats will react to the new plan. Mr. Rendell, talking to reporters yesterday, said the differences over the budget were more "procedural" than substantive.

That means the six-member, House-Senate conference committee on the budget, which has existed for the past two months but has met only three times, may no longer be necessary.

Two Republican senators refused to attend a conference committee meeting yesterday because, they said, they were working on the new GOP spending plan.

Senate Majority Leader Dominic Pileggi, R-Delaware, was critical of the budget conference panel, which is headed by Rep. Dwight Evans, D-Philadelphia. Mr. Pileggi claimed the panel had a "disappointing" track record in crafting a budget and was bogged down in "delays and inefficiency."

Some House members said the decision by Mr. Pileggi and Sen. Jake Corman, R-Centre, to boycott the conference panel meeting could delay approval of a budget by another month. The third senator on the six-member conference panel, Sen. Jay Costa, D-Forest Hills, was also missing and couldn't be reached for comment.

"We call on the senators to return to the committee so we can send a budget to the governor this week," said House Democratic leader Todd Eachus of Luzerne. "If the Senate chooses to begin the budget process all over again, it will take us a month to conclude a budget."

"If we restart the budget process with a new free-standing bill [as senators are proposing], it could take three weeks or another month" to enact a budget and send it to Mr. Rendell, said House Speaker Keith McCall, D-Carbon.

Mr. Evans said that waiting for a budget "until the first week in November is too long and outrageous."

But Mr. Pileggi insisted that once the Senate approves the new budget proposal -- which could happen today -- it would move to the House. If some time-consuming House procedures were waived, then the new budget bill could be sent to the governor late this week, he insisted.

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