HARRISBURG - Hope springs eternal as lawmakers push for a compromise on the state budget.

Overall, lawmakers say the rhetoric, grandstanding and bickering seems to have been kept at a minimum this year during the negotiations process, which some have looked at as a positive sign that a budget is within their grasp.

"So far, negotiations are going well, much better than last year when there was basically no productive dialogue between the House, Senate and Governor until several weeks after the budget deadline had passed," Adam Harris, R-Mifflintown, said. "The mood is definitely more optimistic and bipartisan.

"The goal now is to get that budget done on time and to be as fair as possible to all organizations that are supported by state funding."

Revenue projections remain off by $1.2 billion for the year, which is better than the $3.2 billion gap this time last year. Lawmakers finally hammered out a deal in September 2009, 101 days past the deadline for a new budget, by using a variety of revenue sources, such as the legalization of table games, a cigarette tax increase and a slow down in the phase-out of the Capital Stock and Franchise Tax in addition to money from the Rainy Day Fund.

Gary Tuma, a spokesman for Democratic Governor Edward Rendell, said those revenue sources plus $2 billion in additional cuts throughout the fiscal year brought an end to the budget stalemate.

There is a bright spot in looking at budget revenue sources this year, Mike Fleck R-Lewistown said. The states Tax Amnesty program which targeted tax scofflaws was a resounding success.

"It brought in millions more than was expected," Fleck said. "But it is a drop in the bucket in the long run."

This year, Rendell has submitted a $29 billion budget, an increase from last years budget by $1.15 billion and about $1.5 billion away from the $27.5 billion budget the Republican-controlled Senate is more comfortable with.

Rendell had proposed increased taxes on Marcellus Shale gas drilling and certain tobacco products, but House Democrats were unable to pass such a measure.

"There is not a lot of taste for tax increases this year to generate revenue," Kerry Benninghoff, R-Bellefonte, said. "I think there is a general consensus there is not enough revenue for additional spending.

"There is way too much borrowing and way too much spending."

Senate Appropriations Chair Jake Corman, R-Centre, and Jon Eichelberger, R-Blair, both said current revenue projections make it possible to plan for a $27.5 billion budget for the next fiscal year.

Now the bad news. Last year, some things were "cut down to the bare bones," Tuma said. "As we cut further and further, we are getting close to cutting essential services."

There is also "another wild card" in the form of $850 million in federal funds the state was expecting to receive to help pay for the Federal Medical Assistance Percentage as well as other programs and this was not included in a recent U.S. Senate Bill.

Tuma said without that money from the federal government, thousands of jobs could be in jeopardy.

Eichelberger said the stimulus money used to supplement funding for portions of the budget in the last two years, will not be available for the fiscal year 2010/2011 budget.

If a $27.5 billion budget is passed this year, he said, next year the state will be looking at a "$5 billion hole" and that hole could get deeper.

Eichelberger said a reduction in spending is an absolute must this year to lessen the blow next year, and he will not support any kind of tax increase.

Eichelberger said he uses the word "reduction," as opposed to "cut," because the budget has grown an average of $1 billion a year under the Rendell administration, so its not really a cut.

Lawmakers need to take a closer look at reducing the three largest portions of the budget, he said, which are education, corrections and welfare.