State budget talks to resume at 1 p.m.: Negotiators consider sales tax on services.

Byline: Chris Christoff

Sep. 28--LANSING -- Despite hours of negotiations and a looming state government shutdown, the House and Senate were unable to reach a compromise on the 2007-08 budget, although leaders continued discussions into the early morning of Friday.

The two chambers adjourned at 1 a.m. Friday and were scheduled to come back into session at 1 p.m. Friday.

Even though there was no agreement on how to fix a $1.75 billion budget deficit, lawmakers said that wasn't a sign that no deal could be reached.

"It's not a bad sign. Nobody is throwing up their hands. Everybody is still talking and trying to pin down the final details," said Sen. Ron Jelinek, R-Three Oaks.

But state Rep. Andy Meisner, D-Ferndale, said he's frustrated at the lack of progress as an Oct. 1 deadline approaches.

"I think they're working, but not with the sort of urgency that is needed," he said.

Senate Minority Leader Mark Schauer, D-Battle Creek, said even …