TOPEKA — The big stare-down between the Kansas House and Senate continued through the Legislature's 95th day in session.

Budget negotiators today tentatively settled most of a long list of differences dividing the two chambers over state spending. But they couldn't find agreement on funding for public schools, apparently the major remaining obstacle to a budget deal.

House members in a late afternoon bargaining round said they couldn't settle on a compromise until parallel negotiations by a separate conference committee over tax cuts were settled.

A new tax plan

Meanwhile, tax negotiators met twice Wednesday before agreeing to disagree to a House proposal, a procedural move that paves the way for the lower body to vote on a tax-cut plan different from the massive one it approved last week.

The bill approved last week is projected to leave the state budget at least $2.4 billion in the hole by 2018 and lawmakers have been looking for an alternate tax agreement that wouldn't leave the treasury depleted. Gov. Sam Brownback said last week he would sign the big bill unless he gets an alternative.

House negotiators offered one that would reduce the state's income tax brackets from three to two. The lower bracket rate would drop from the current 3.5 percent to 3 percent. The top bracket rate would be cut from 6.45 percent to 5.5 percent for tax years 2013 and 2014 and then be shaved in increments until bottoming at 4.9 percent in 2018.

The House plan also would reduce the current 18 percent earned income tax credit for the working poor to 15 percent.

It would retain the child and dependent care tax credit, but eliminate the current credit that can be claimed for child daycare costs. (A detailed comparison of the tax plans prepared by legislative research staff is attached.)

The latest House plan would leave the state with projected cash reserves in each of the next five years ranging from $717 million in the coming fiscal year to a low of $356 million for fiscal 2018.

But it was unclear Wednesday whether the plan would win enough House votes when put before all 125 members or whether Senate leadership would then let the plan be voted upon by the 40 members in the upper chamber. The governor issued a statement urging the Legislature to adopt the compromise plan.

Sen. Les Donovan, the Wichita Republican who chairs the Senate Taxation Committee, told House negotiators he felt certain that the House proposal would not pass muster with Senate leaders who have said they want a tax bill that doesn't cut income taxes as much or as fast as the House and governor would prefer.

"I don't have much hope in the Senate approving this offer," he said of the House proposal. "It does some good things. Mainly, it would keep us from having to live with the bill on the governor's desk."

Budget wrangling

The Senate Ways and Means Committee first thing on Wednesday passed out an already-approved House budget bill but not until they had inserted a full budget plan for the remainder of current fiscal year and the new one that starts July 1. The bill contained all the agreements tentatively conceded to by House negotiators during earlier bargaining rounds. Any items from the negotiations still unsettled were also put in the bill with the Senate preferences intact.

Ways and Means Chair Carolyn McGinn, a Sedgwick Republican, said that bill could be ready for a Senate floor vote on Thursday and hinted that the Senate could pass the bill and then adjourn.

"We weren't getting anywhere with the House," McGinn said.

That tactic apparently brought the House team back to the bargaining table after they had declared Tuesday that the negotiations were at an impasse.

Among the things tentatively agreed to on Wednesday:

The House agreed to drop its budget proviso that would have barred the Kansas Insurance Department from spending federal grant dollars associated with the Affordable Care Act, which Kansas, along with 25 other states, is challenging in the U.S. Supreme Court. The department had about $800,000 of a $1.9 million grant remaining as of April 18, according to legislative staffers.

Negotiators agreed to spend $3.6 million in the coming fiscal year to help reduce waiting lists for home and community based Medicaid services for the disabled; $1.8 million would be earmarked for the physically disabled and $1.8 million would be for the developmentally disabled.

They also agreed on provisions that would delay the inclusion of long-term services for the developmentally disabled in KanCare, the governor's plan for remaking the state Medicaid program. The bill would postpone the inclusion until one year after the launch of KanCare regardless when the program starts. But it also would allow for sooner changes in the ways the need for services are assessed. Those changes could begin with introduction of the KanCare program, which still needs federal approvals to be launched. The administration aims to begin KanCare on Jan. 1, 2013.

The budget teams agreed to meet again at 9:30 a.m. on Thursday. The tax teams had not yet scheduled their next meeting when both chambers adjourned for the day.