RICHMOND -- Virginia lawmakers continued negotiations late Thursday on a transportation funding bill and revisions to the state's two-year budget, with legislative leaders holding out hope that the General Assembly will adjourn as scheduled on Saturday.

Negotiations on both issues were held up Thursday by lengthy floor sessions in the Senate and House of Delegates, as both chambers scrambled to meet a deadline for completing work on bills that don't require reconciliation. The floor activity included a decisive House vote to defeat a proposal allowing Colonial Downs to add "historical horse racing" games at its New Kent County track and its off-track betting facilities around the state.

Republican leaders hope to overcome differences between the House and Senate on long-term transportation funding by this weekend, ending more than a year of legislative gridlock on the issue.

"It's complicated," said House Majority Leader Morgan Griffith, R-Salem, one of a dozen negotiators on the transportation bill, HB 3202. "We're still hoping to get an agreement and sell it to our caucus."

Sen. William Wampler, R-Bristol, said budget negotiators "have made a lot of headway" in agreeing on a spending plan, but stopped short of guaranteeing a Saturday adjournment.

The General Assembly has not finished its work on time since 2003. But, with all 140 legislative seats up for election this fall, lawmakers have ample motivation to meet their deadline this year.

A key sticking point between the House and Senate is whether the transportation plan should rely on a recurring use of revenue from the state's general fund, which supports services such as education, public safety and public heath. Virginia largely funds its portion of transportation with dedicated revenues from gasoline taxes, vehicle sales taxes and licensing fees.

The House has backed a plan that would pump $250 million a year from the general fund into transportation, but a Senate coalition of 17 Democrats and six Republicans has blocked the proposal.

The two houses have generally agreed to gradually issue up to $2 billion in bonds for construction and to generate new ongoing revenue by increasing vehicle registration fees and fines for serious driving offenses, and by imposing new fees on drivers with poor traffic records. The packages also would allow designated localities in Northern Virginia and Hampton Roads to increase various taxes and fees to finance projects in those regions.

Negotiators from the two houses have broached the idea of putting new revenue into road maintenance and using general fund money to pay off bonds. Gov. Tim Kaine has said that transportation debt should be retired with specific revenue sources and has been critical of plans to pay off bonds with general fund dollars.

The House wiped out another transportation funding option Thursday, voting 72-25 against a Senate amendment to allow betting on "historical horse racing" games. Supporters of the legislation said the new gambling option could generate as much as $300 million a year for transportation. Opponents likened the games to slot machines and dismissed the revenue projections as unreliable.

House Republicans said the gambling proposal could unravel a fragile coalition supporting the House transportation bill.

"I'm putting on my Puritan hat today to say 'Don't muck up the transportation package,' " said Del. Vince Callahan, R-Fairfax County, the chief House budget negotiator.