Negotiations on a 2008-09 state budget could culminate in a handshake agreement by the end of the week, improving the chances that 25,000 state workers would not face furloughs Tuesday.

The state’s fiscal year ends Monday. Gov. Ed Rendell has said he probably would hold off on shutting down government operations on Tuesday if a budget deal is close.

If the talks stay on track through Friday, House Republican Leader Sam Smith said Wednesday, the House and Senate could begin voting on budget bills Monday and could send them to Rendell by July 2.

For the first time this week, legislative leaders had several hours of talks with Rendell aides Wednesday. “Everybody’s talking. That’s always a good sign,” said Greg Fajt, Rendell’s chief of staff.
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