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ST. PAUL (AP) ― A major piece of a session-ending budget deal fell into place Saturday when a key negotiator said a health care agreement had been reached.

Sen. Linda Berglin came out of the governor's office late Saturday afternoon to say legislative negotiators and Gov. Tim Pawlenty had signed off on a package of medical payment reforms and expanded health care coverage.

Berglin said it would result in coverage for 12,000 more Minnesotans, including 7,000 on public programs. She said the deal also includes a one-time $50 million transfer from a dedicated health care account that had been the subject of much disagreement between Democrats and the Republican governor.

"They're still in there working on the rest of the pieces," said Berglin, DFL-Minneapolis. "But I believe that this agreement has helped them to be able to finish that fairly quickly."

Pawlenty spokesman Brian McClung said final approval of the health care proposal hung on an overall deal coming together. Top legislators and Pawlenty were still talking behind closed doors.

Still, politicians of all stripes were eager to highlight the health care package.

McClung said it would put Minnesota ahead of the rest of the country on giving consumers information about medical care. GOP Rep. Laura Brod, R-New Prague, said she liked that it included tax credits and other measures to make private health insurance more affordable.

Berglin, the top Senate Democrat on health care, said changes to allow more single adults and children into state programs were a step in the right direction.

"It's better to get 12,000 people covered today than to wait another year," she said.

Earlier Saturday, leading lawmakers and Pawlenty stepped out of their budget talks and onto the Capitol steps, breaking to mark Minnesota's 150th birthday even though they still hadn't resolved all their differences.

Lawmakers in suits mingled with casually dressed visitors as vintage airplanes buzzed overhead. But major unresolved issues included homeowner property taxes, tight school budgets, a nearly $1 billion state deficit and finance plans for the Mall of America and urban mass-transit users.

Pawlenty and top Democrats posed together for a picture, smiling broadly for the cameras before heading back into the closed-door negotiations.

"We hope we can see if they can get resolved in the next few hours," the Republican governor said.

Democratic House Majority Leader Tony Sertich said a handshake was close -- but final details were stubborn.

"We're 99 percent of the way there, so it would be a shame to not finish and come to agreement on the final one percent," said Sertich, DFL-Chisholm.

The Senate narrowly approved a bill that would hold off foreclosures for homeowners struggling to make their mortgage payments. The vote was 34-33. The House approved it late Friday after adding amendments to restrict the protection to those earning less than $250,000 a year and forbidding illegal immigrants from taking advantage of the help.

House Minority Leader Marty Seifert said there was still a chance things could end on a sour note.

"My fear is that there's going to be fireworks both inside and outside the Dome today," said Seifert, R-Marshall, referring to the evening sesquicentennial festivities.

Democratic leaders were aiming to end the session around sunrise on Sunday. Midnight late Sunday is their last chance to pass bills or override vetoes, with Monday's session reserved for ceremony and internal business.

There were some wild cards remaining. Sponsors of a proposal to raise the minimum wage, a bill Gov. Tim Pawlenty vetoed this week, hoped a scaled-back plan would prevail. And a veto override was possible on a bill prohibiting Minnesota from complying with federal-imposed driver's license overhaul many Republicans and Democrats view as heavy-handed and underfunded.

Pawlenty issued an executive order Saturday preventing state government from implementing the federal Real ID regulations before June 2009, saying he shared some of the concerns. It was unclear whether that order would head off an override attempt.

Still, the most attention was being paid to bills dealing with property taxes, health care and the state budget.

The sides agreed in concept to a property tax relief plan that would prevent local levies from rising more than 3.9 percent a year. It would be combined with $60 million and would go to cities, counties and townships to cushion the effect of a levy limit. More money would also be plowed into programs that provide direct, income-based relief for homeowners.

Seifert said there were continuing negotiations over how long the cap would be in place, with discussions ranging from one to three years.

There was also an expectation that cities would be permitted to raise taxes above the cap if the money generated went toward hiring new police officers and firefighters.

To address a $935 million budget shortfall, lawmakers were primed to sign off on about $355 million in spending cuts, a corporate tax change worth $100 million in new revenue and a $500 million withdrawal from the state's rainy day fund. The final package was also likely to contain one-time aid to schools totaling $51 per student.

Other items under consideration on the final day: a $70 million borrowing request viewed as vital to a planned Minneapolis-to-St. Paul light rail line, an appropriation to buy land for a new state park in northeastern Minnesota and a subsidy package toward a massive Mall of America expansion.

(© 2009 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)