Penn State's lobbyist Richard DiEugenio said the state Senate would most likely reach a resolution and pass the unfinished portions of the general revenue budget within the next two weeks.

The state Senate would then consider the non-preferred bill, which determines state appropriations to state-related universities, including Temple, Lincoln and University of Pittsburgh, he said.

"There has been no controversy with the higher education appropriations themselves," DiEugenio said.

Sen. Jake Corman, R-Bellefonte, agreed that negotiations in Harrisburg seem to be moving forward and he expects a decision will be made by the end of next week.

"I think they are doing much better right now than they have been in the past," Corman said.

In March, Rendell vetoed the entire basic education subsidy and proposed a plan to include additional reforms, such as a full-day kindergarten program and a property tax reduction for local school districts.

To obtain the additional revenue needed for these reforms, Rendell suggested a combination of a personal income tax increase and gambling legislation to put slot machines at racetracks. These issues are currently being debated.

Although DiEugenio has been lobbying in Harrisburg to convince the General Assembly to restore the 5 percent cut approved by the state House in July, he said he has been told there would probably not be additional funding once the budget is complete.

"Apparently, they're looking at the revenues and trying to hold the tax increase to as small of an amount as they can," DiEugenio said. "That's where things could break down, because that will obviously limit what they can do with some of the programs the governor is interested in."

Corman said Penn State's appropriation has been set at $306.5 million and is not being negotiated.

While Penn State waits for its state appropriation, the university is losing about $100,000 in interest each month by dipping into university reserve accounts, DiEugenio has said.

Penn State spokesman Tysen Kendig said money in financial reserves could sustain the university for several more months.

However, if the money runs out before the state appropriation comes through, the university would have to borrow money at a 1.5 percent interest rate, DiEugenio has said in the past.

The university has arranged for a line of credit at three local banks if it becomes necessary to borrow money.