Ah, Albany: What appeared to be the potential white smoke of a budget agreement Thursday morning melted away in more vows from state legislative leaders that an agreement was close, but not quite there yet.

Earlier in the day, Assembly Speaker Sheldon Silver indicated a budget deal was expected at some point this afternoon.

Now, following a second, hours-long leaders meeting, the budget is not quite soup.

Senate Independent Democratic Conference Leader Jeff Klein told reporters that he expects an announcement by Friday morning.

Lawmakers leaving Gov. Andrew Cuomo’s office on the second floor of the state Capitol insisted they were still trying to lock down technical language.

Sources said earlier in the day that lawmakers and Cuomo were considering a two-tiered reimbursement system for pre-Kindergarten teacher certification.

Language is being discussed that would allow for a $7,000 reimbursement for parochial and community-based organizations while a $10,000 reimbursement would be available for public schools.

Meanwhile, Klein said a proposed compromise on the Dream Act and an education investment tax credit is likely not possible.

“We haven’t really come up with an agreement on a solution yet,” Klein said.

The compromise would have yoked the Dream Act — which provides tuition assistance to the children of undocumented immigrants — to the tax credit for donations to private and parochial school scholarships as well as public school programs.

Assemblyman Francisco Moya, a lead sponsor of the Dream Act, said it was a mistake to link both proposals.

A subsequent joint statement from Senate Republican Leader Dean Skelos and Brooklyn Sen. Marty Golden agreed.

“We agree with Assemblyman Moya that the Dream Act should not be coupled with a proposal to create an Education Investment Tax Credit. The two items should stand separately and be judged on their merits,” the lawmakers said. “Last week, legislation to approve the Dream Act was defeated on the floor of the Senate, but both co-leaders of the chamber believed it deserved a vote. Like Cardinal Dolan, we support the Education Investment Tax Credit because it would create bright new educational opportunities for countless New Yorkers, including immigrants and the poor. We should move swiftly to get it done.”