Indiana lawmakers failed to strike deals on some major issues and meet a tentative deadline of adjourning the session by midnight Thursday night.

House Speaker Patrick Bauer, D-South Bend, abruptly adjourned the House shortly before 11 p.m. and said the chamber would reconvene Wednesday. The statutory deadline for adjourning is March 14, but lawmakers hoped to finish days earlier.

Democrats who control the House and Republicans who rule the Senate appeared close to a compromise that would allow schools to shift money from property tax funds to help offset some of the $300 million in budget cuts in general operating expenses.

There also were still partisan differences on measures dealing with unemployment insurance tax increases and tax breaks, and incentives designed to create jobs. Bauer said the break would give Senate Republicans time to consider compromises offered by House Democrats.

Senate President Pro Tem David Long, R-Fort Wayne, said he was baffled by Bauer's decision, saying the speaker indicated earlier that he wanted to try to finish work by Thursday night or push into Friday. Long said the Senate would return Friday, but it would impossible to settle the major issues without the House present.

"There was no explanation or hint of this happening," Long said. "We said we were perfectly willing to keep working. So this came out of nowhere."

Bauer said negotiations took a hit when Republican Senate Tax Chairman Brandt Hershman of Lafayette, a top negotiator on the unemployment insurance issue, left for two hours to attend a GOP Lincoln Day dinner. Hershman, who is running for Congress in the 4th District, said he left his cell phone number and e-mail address but Bauer made no attempt to reach him. Bauer's response: "He's a key part of this and when you negotiate, you do it face to face."

One compromise Democrats offered would allow schools to use up to 5 percent of their capital project accounts to help offset at least part of the $300 million in budget cuts in instructional money that Gov. Mitch Daniels imposed because of the state's declining revenues.

But Senate Republicans also wanted to allow schools to use up to 10 percent of property tax funds to help offset some of the cuts so teachers would not be laid off. But for schools to get that higher percentage, they could not give teachers pay raises next year except for so-called step increases that provides more money for many teachers for each additional year of experience.

"It's got to have both options in it—the 5 percent and the 10 percent," said Sen. Ronald Alting, R-Lafayette.

But such a compromise on that issue passing could depend on legislation that would delay increases in taxes that employers pay into the state's unemployment insurance fund. Lawmakers passed the increase last year as a way to start shoring up the fund, which has borrowed $1.6 billion from the federal government to remain solvent.

The tax increase slated to take effect in April would cost employers an additional $360 million in taxes. Republicans want at least a one-year delay, saying an increase this year would force businesses to lay off workers in a still struggling economy.

The House passed a bill that would repeal the tax increase. But Democrats included provisions that would crack down on employers who misclassify workers as independent contractors to avoid paying jobless premiums, expand eligibility for benefits in order get $148 million in federal stimulus dollars for the fund, and increase weekly maximum benefits.

Republicans say the expanded eligibility and increase in maximum benefits would end up costing tens of millions of dollars, further depleting a bankrupt fund.

Earlier Thursday, Bauer didn't sound optimistic about negotiations on that issue.

"It seems like the closer you get, the farther you get away," he said.

The House and Senate did pass a bill Thursday that would prevent companies from banning guns that employees keep in their locked cars while on company property. The bill now goes to Gov. Mitch Daniels for his consideration.

The bill would exempt some investor-owned public utilities, certain chemical plants, agencies whose drivers transport developmentally disabled people, school property, child care centers, domestic violence shelters and group homes.

Long said earlier Thursday that even if there were agreements on major pending issues, there would not be enough time to print the bills and adjourn by midnight.