SPRINGFIELD - The Illinois Senate rejected a $2.2 billion pension-borrowing plan Tuesday, further clouding an already murky budget picture.

With time running out on the state's fiscal year, the measure twice fell just a few votes short of the 36 needed for passage.

It was considered a key piece in building a spending plan for the fiscal year, which begins today, that prevents significant cuts to social service programs serving the poor, elderly and disabled.

The vote came just hours after Gov. Pat Quinn threatened Tuesday to veto any budget sent to him by lawmakers that is unbalanced.

In a speech to lawmakers, Quinn praised the pension borrowing plan as an important part of the budget but emphasized that lawmakers still must approve an increase in the state income tax rate to stave off massive cuts.

In a last-minute twist, however, Senate President John Cullerton, D-Chicago, alleged that Quinn worked behind the scenes to kill the pension borrowing plan in the Senate in order to gain leverage for his proposed income tax increase.

Quinn didn't respond to the accusations.

"We have no immediate comment," spokeswoman Marlena Jentz said as lawmakers headed home for what could be a short break.

The standoff means Illinois will enter the new fiscal year today without a spending plan on the books.

That doesn't mean state operations will cease immediately, but it does set up a scenario in which paychecks could be missed within the next two weeks if a solution isn't found. Because state funding is in limbo, some local social service providers have already implemented layoffs.

Quinn wants an income tax increase to help close a deficit estimated as high as $11.6 billion, but the idea has been bottled up in the Democrat-controlled House.

Lawmakers have sent him a budget that contains enough money to operate for about six months in hopes a better solution can be found down the road. Quinn said lawmakers aren't doing their jobs and said he would veto any budget that isn't balanced.

"We cannot live in a pretend world," Quinn said. "I will veto that budget. We can't have half-measures."

House Speaker Michael Madigan, D-Chicago, said lawmakers should be prepared to return to Springfield to resume work on the budget. For now, no date is set.

"I'm prepared to stay here all summer to get the job done. Whatever it takes," Quinn said.

State Rep. Mike Bost, R-Murphysboro, said Quinn's lecture to lawmakers suggesting they do the "adult" thing wasn't effective.

"It didn't help negotiations," Bost said.

State Sen. Mike Jacobs, D-East Moline, said he didn't see a tax increase coming in the near future and criticized Quinn for not compromising more.

"You can't be in a position of leadership and not try to meet people half way," Jacobs said.

Even with a tax hike, Quinn said the budget would still need to be cut. Among the more than $1 billion in cuts on the table are 2,200 layoffs and 12 furlough days for state workers.

kurt.erickson@lee.net|789-0865