The governor and legislative leaders met until one a.m. Thursday but still haven't reached a deal to end the partial government shutdown. They're still stuck on gambling, in particular, Gov. Pawlenty wants a vote on a plan to put slot machine at Canterbury Park. MPR's Tim Pugmire has the latest on the overnight negotiations:

Pawlenty invited both sides to his office shortly after Senate DFLers unveiled their latest budget proposal. The offer includes an expansion the card tables at Canterbury Park. It also embraces one of the governor's education reform initiatives: performance-based pay for teachers. Senate Majority Leader Dean Johnson described the offer as a substantial compromise.

"Governor, Governor, we need to get Minnesota off the front pages, off the national news as a state that doesn't work. Governor, we need to compromise," he said.

The Senate offer also revived Gov. Pawlenty's earlier proposal to add a 75-cent tax on a pack cigarettes. Pawlenty included the same revenue source, which he calls a "Health Impact Fee," in the counter offer he outlined Wednesday night. He also stuck with the so-called Racino, a proposal to raise money from slot machines at Canterbury Park. That's still a deal breaker for some Democrats. House DFL Minority Leader Matt Entenza says the potential revenue from Racino would be held up by legal challenges.

"The Attorney General has said that it violates the constitution. It will be tied up in courts and there's no way to get the revenue. So, we're engaging in a theoretical debate," he said.

Entenza's argument hasn't deterred Gov. Pawlenty. He views Racino revenue as a sure bet, and he wants legislators to vote on the issue.

"There are competing legal opinions about the issue involved. It's been litigated in a bunch of other states and the states have won in every case, or similar issues have been litigated in other states. So we just disagree. We think it can move forward both financially and legally," he said.

They're going to meet again Thursday. If they can get a tentative deal together by the time the House and Senate convene, there could be a vote to reopen (at least temporarily) the shutdown parts of government. But just to repeat: Gov. Pawlenty wants a vote on the racino proposal. The question is, will DFL'ers give him one?

As this all plays out there are about 9,000 state employees waiting to hear whether they can go back to work. Hundreds of them rallied at the Capitol Wednesday. MPR's Art Hughes talked to some of them:

The shutdown forced Health Department employee Nancy Petschauer to go on vacation. She considers herself fortunate to have the time available, and another income earner in her house. But she's having to think about unpleasant choices if the impasse continues.

"Unemployment lines, which I've never had to do before in my life. Possibly bumping friends -- in order to be able to get an income -- that I've worked with for a long time whose jobs are just as important as mine," says Petschauer.

And one consequence of the shutdown is proving particularly painful: the lack of permits for some truckers. The Pioneer Press reports that may soon change:

Howitzers are massed at the Iowa border, buyers can't get their houses delivered, and a nuclear reactor could be stopped at the St. Croix River. On the third business day of the Minnesota government shutdown, real economic and military hardships were evident.

Relief, however, was in sight Wednesday when Special Master Edward Stringer recommended that the Minnesota Department of Transportation resume issuing permits for truckers hauling oversized loads.

But will there be relief for everyone else? Stay tuned. And keep those comments coming. I'll try to be a little more diligent about canning the spam. I'm also going to be out of the office for the next few days, so keep listening to the radio and checking the Session 2005 section for the latest news.