Senate leaders said late Wednesday that negotiations had stalled with the House of Representatives on funding the state's public schools.
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With other major issues left unresolved, talk of special sessions began at the Capitol.
The school money question left educators around the state uncertain about their institutional and personal budgets.
"Yesterday we thought we were well on the way to solving this," said Sen. Lyda Green, R-Wasilla, president of the Senate.
"We had an agreement for a one-year fix," she said.
As of late Wednesday, the Legislature also had yet to give final approval to the Alaska Gasline Inducement Act, the landmark legislation of Palin's first term as governor.
Other issues that lawmakers were not able to solve during the previous 120 days include municipal revenue sharing and teacher and public employee pensions costs.
Sen. Lyman Hoffman, D-Bethel, is one of the key players on the Senate side of the negotiations.
"They're all intertwined, affecting different parts of the state differently," he said of the problems. "They all need to be addressed."
Green rebuffed questions about whether there was time remaining before the session was legally required to end at midnight to complete work on even a temporary solution for schools.
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"I haven't thought past midnight," she said.
Nevertheless, Green said she and other leaders wanted a special task force consisting of five House members, five senate members and one person appointed by the governor.
It would be called a Joint Legislative Education Funding Task Force and would study the issues during the summer and try to come up with a funding formula.
If there was a deal to consider, Green said a special session could be held in the fall.
"We'd ask the governor's assistance to call us into special session," she said.
Two top leaders in the House of Representatives dealing with the issue are Rep. Kevin Meyer, R-Anchorage, and Mike Chenault, R-Nikiski. They have discussed in closed session how to balance the competing views.
No education funding plan was publicly proposed until late at night during last weekend's session, when the Senate Finance Committee made a surprise introduction of its own funding plan.
"They presented a bill Saturday night, and there wasn't even much public notice on it," Meyer said.
Meyer represents the state's largest school district, Anchorage. Sen. Kim Elton, D-Juneau, called the Senate Finance Committee proposal a good one.
The delay in reaching an agreement comes at an embarrassing time for legislators who had said they would try to finish work prior to the 121 days mandated by the constitution.
House Speaker John Harris, R-Valdez, even said they were going to try to complete the session in 90 days.
Next year a voter-mandated session limit of 90 days takes effect, and Harris said he wanted to use this year as a trial run for how to do things more quickly.
Despite the difficulty with education funding, Green said she remains proud of the work accomplished by the Senate this year, the first under the leadership of the Senate Working Group, a bipartisan coalition of Democrats and Republicans.
"Education funding will probably always take more time than is ever available," she said.
Pat Forgey can be reached at firstname.lastname@example.org.
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