OLYMPIA – Legislators may reach a deal sometime today on one of the key stumbling blocks to passing a budget and adjourning, a spokesman for Gov. Chris Gregoire said Saturday evening.

They still disagree on major changes proposed for the state’s workers compensation system but progress was made in a day of negotiations, Jim Justin, Gregoire’s legislative director, said. "We are very close. Something’s going to happen in the next 24 hours."

But a deal is not guaranteed, he added: "Is there a potential for it to still blow up? Yes."

Justin spoke as the Legislature adjourned after a rare Saturday session. . .

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...  and marathon talks on workers compensation changes likely ended for the night. Legislative leaders including Senate Majority Leader Lisa Brown, D-Spokane, and Sen. Joe Zarelli of Ridgefield, the Republican budget expert, entered Gregoire’s office as Justin was concluding his briefing, possible for a quickly scheduled talk on the budget.

The Legislature has four days left in its special session to settle on a budget that closes a $5.1 billion gap between expected revenues and projected costs for all current programs and wages. Legislative leaders and budget writers said they are close to an agreement between the different spending plans passed by each chamber, but several other items – which some call roadblocks and others call hostage-takers – remain under negotiations.

The primary one is a possible change to the state’s century-old workers compensation system that would allow some injured workers to be given settlements rather than lifetime pensions. Business groups support the change as a way to lower their rates. Gregoire supports such a change for workers 55 and older to take voluntarily and the Senate passed one version with bipartisan support. House Democrats, however, oppose it, as does organized labor.

Jeff Johnson, the president of the state Labor Council, denounced Gregoire’s latest compromise Saturday morning, a day after being briefed on it. Labor opposition "complicates the negotiations but we’re still moving forward," Justin said.

One sticking point is different proposals to lower the age at which settlements could be offered. Some Republicans want the age limit to be set lower at the outset, or be reduced over time, Justin said.

Also being negotiated in separate sessions are different plans to reduce the amount of money the state can borrow for large projects in the Capital Budget.

With key legislators coming and going from different negotiations, the two chambers still managed to move a handful of bills out of each house. The Senate approved and sent to the House a proposal to ask potential buyers how much the state could get for its wholesale liquor distribution system.

On a 31-14 vote, it overcame objections the proposal merely shifted the state's liquor monopoly to private hands and that the state should consider selling the retail stores as well. Hanging over the debate was Friday’s filing of an initiative by Costco, the state's restaurant association and the region's grocery stores that would privatize liquor distribution and sales throughout the state.

Sen. Rodney Tom, D-Bellevue, argued the bids should not be sought until after the November election if the initiative gets enough signatures to qualify for the ballot. "If the initiative is certified, this bill is essentially worthless," Tom said.

But supporters said the Legislature can't put issues on hold just because an initiative was filed. "If the initiative process is a reason for people not to act, we shouldn't be here," Sen. Ed Murray, D-Seattle, said.

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