"We are continuing to work and continuing to talk, and I still believe that the differences are bridgeable," Senate President Pro Tem Darrell Steinberg said Thursday.

The Legislature faces a Friday midnight deadline for passing a balanced spending plan for the fiscal year that begins July 1. Democrats said they intend to pass the main budget bill, which will keep their paychecks flowing.

California lawmakers do not receive pensions but are the highest paid in the nation with a base annual salary of $95,290. Nearly all receive additional tax-free per diem payments of about $30,000 a year. Lawmakers are scheduled to see their pay cut 5 percent, or down to $90,525, starting Dec. 3.

On Thursday, Republicans sent letters to the state controller and treasurer asking them to verify whether the Democrats' budget proposal is balanced even though they have no authority over legislative pay.

Last year the governor vetoed the budget passed by Democrats calling it unbalanced. The state controller withheld 12 days' pay but a judge has since found that the controller has no authority to block paychecks because it violated the separation of powers clause of the California Constitution.

Steinberg said the majority party plans to pass several companion bills but will delay voting on more contentious issues such as Brown's request to release financing for construction on the first leg of a bullet train in the Central Valley.

Brown spokesman, Gil Duran, said, "discussions are ongoing."

Democrats agree with the governor on most aspects of his $91.4 billion spending plan. Both sides assume that voters will approve Brown's initiative on the November ballot to raise the sales tax by a quarter cent and increase income taxes on people who make more than $250,000 a year.

Brown has also proposed a 5 percent reduction in state worker pay that still must be negotiated with unions and he wants savings from the state's Medi-Cal program, which provides health insurance for low-income families.

Sen. Noreen Evans, D-Santa Rosa, said Democratic leaders have been working with Brown to try to avoid a budget veto.

"I'm very hopeful," she said. "The differences are so minimal that at this point I'm hopeful that he will sign it immediately."

Republican lawmakers, who have been sidelined from negotiations because Democrats can pass the budget on a majority vote, said the budget was not released in time for a comprehensive review. They criticize the overall spending plan, saying it lacked public pensionreform or a spending cap to control government spending.

"It's sad, because there are no reforms in this budget," said Sen. Sam Blakeslee, R-San Luis Obispo.

Democrats put out a plan this week that doesn't save as much as the governor proposed. They sought to minimize the amount of cuts they have to make by slashing his proposed reserve fund from $1 billion to about $500 million.

Brown is proposing to cut $880 million from CalWORKS by establishing different levels of support that reward parents for working and reinstitute tougher work requirements.

Democratic lawmakers and advocates fear the changes would drive more families into homelessness because it includes welfare cuts by as much as 27 percent. They countered with a proposal to cut $428 million by extending existing cuts to counties to provide work training and child care.

Democrats also oppose Brown's plan to cut $225 million from the In-Home Supportive Services program, which helps disabled and sick people continue living at home. Brown wants to eliminate services for people who do not live alone and cut by 7 percent the number of hours of help they are eligible to receive.

Democrats are only willing to extend an existing 3.6 percent cut, which would save $90 million.

More than three dozen people have been arrested at the state Capitol this week in protests over cuts to home health care and other programs for the needy.