Heading into the final seven weeks of the session, leaders have yet to rise above partisan differences and enact a school funding bill.
Their failure to do so by an April 1 deadline has caused headaches for school administrators, who have had to make personnel decisions without knowing exactly how much state aid they will get.
Another major setback occurred last week when talks collapsed on reaching an agreement on a general funding bill.
In the past, legislators have agreed on passing basically a standstill budget for the fiscal year that begins July 1, then worked individually on separate bills that increased funding for various agencies.
Without a general appropriations bill, legislators risk a special session if they cannot resolve their disagreements and complete the budget process by the adjournment deadline, which this year is 5 p.m. on May 27.
Inaction on school funding revolves around the issue of all-day kindergarten.
Democratic Gov. Brad Henry proposed a $144 million increase in spending for schools. Most of the money is ticketed to pay for pay raises as part of a five-year plan to raise teacher salaries to the regional average.
The Republican-led House, however, has not agreed to the governor's $24 million kindergarten proposal, which was included in a Senate-passed education bill. The House did not have a separate education bill, but placed money for teacher raises in its version of the general appropriations plan.
Philosophical differences over taxes are at the core of the overall budget dispute.
In his State of the State speech, Henry proposed a $163 million tax-cut proposal that called for rebates this year of up to $100 for all Oklahomans. The plan also includes cuts in estate taxes, income taxes paid by retirees, and a sales tax holiday on back-to-school purchases.
House Speaker Todd Hiett, the first GOP speaker in 80 years, has been pushing a similar tax program that would permanently reduce income taxes, cutting the maximum rate from 6.65 percent to 6.25 percent. That would cost about $100 million each year.
Henry's $100 million rebate program would not be in effect every year, occurring only in growth years when the state is flush with excess funds.
Senate Democrats also passed a tax program that is geared toward correcting an inequity in the tax system and helping low-to-middle-income taxpayers who do not itemize their taxes. Their plan would raise the standard deduction used by most taxpayers to the federal level over a period of four years.
Taxes were the subject of some of the shrillest partisan comments from House and Senate leaders after the collapse in discussions on the GA bill.
"With over a half billion dollar surplus, we must make sure the Democrats don't spend it all so we can give some money back to taxpayers," Hiett said.
Senate Democrats "have created a potential crisis through inaction," he said in announcing the budget impasse over the GA bill.
Senate President Pro Tem Mike Morgan, D-Stillwater, said the newly elected Republican House majority had made it clear it favors "tax cuts for the rich" over funding critical services, including health care and rural fire protection.
Earlier in the week, House Republicans issued a series of news releases accusing Senate Democrats of attempting to sidetrack pro-family programs sponsored by the GOP.
On Thursday, Morgan seemed optimistic the two sides could work out their differences.
He predicted passage of "a significant work comp bill" this session and said progress had been made on tax cuts and other issues.
Morgan said approval of the college bond plan was a huge achievement.
"There are a lot of times when you get to the halfway point of the session and you really can't say that we have completed anything," he said.
He also soft-peddled the partisan infighting that has flared off and on and said it was "not my style" to engage in "a press release derby."
After Hiett's Friday news release criticizing Democrats, however, Morgan responded with one of his own accusing Republicans of placing "very little value in working families" when it comes to budget priorities.