HARRISBURG -- With less than two days remaining to complete a new state budget on time, the fiscal stalemate continues between Democratic Gov. Ed Rendell and legislative Republicans.

The two sides planned to meet today at 5 p.m. for budget talks at the governor's mansion, which is about a mile from the Capitol.

However, at a press conference today, Mr. Rendell expressed no optimism that a compromise is anywhere near between his $28.8 billion spending plan for fiscal 2009-10 and the Senate Republicans' alternative budget of $27.3 billion, which makes deep cuts in many state programs.

"Do I think (the impasse) will go beyond 60 days? Maybe,'' he said. "I would rather get the budget done right than get it done on time,'' meaning by Wednesday -- the start of the new fiscal year.

Mr. Rendell has proposed several new or larger taxes that legislators, including some Democrats, are having trouble supporting, such as increasing the Personal Income Tax rate to 3.57 percent (from the current 3.07 percent) for the next three years.

Mr. Rendell insisted that the state's current $3.2 billion budget deficit cannot be erased just by cutting state spending, as Republicans want to do. Besides the PIT increase, he wants to institute a tax on natural gas extracted from Marcellus shale areas of the state; increase the cigarette tax by 10 cents a pack; apply the sales tax, for the first time, to sales of cigars and smokeless tobacco; and use some of the funds in the state's $750 million Rainy Day Fund for emergencies and some of the $700 million surplus in a fund that pays for doctors' medical malpractice insurance.

Mr. Rendell said that July 17 may be a more important day than July 1. The 17th is the first day that many state workers would actually miss a paycheck, since they will be paid on July 3 for their previous two weeks of work.

He said that members of his administration, and state legislators, are due to get their next monthly paycheck on Wednesday -- July 1 -- and so they would have to wait for that paycheck if a new 2009-10 budget isn't approved by then.

Mr. Rendell praised a state employee credit union for offering 60-day no-interest loans to state workers, and he said he may seek to have that no-interest period extended if the budget isn't completed within 60 days.

"We will do everything we can to minimize the pain for our state workers,'' he said. "They surely didn't cause this (budget problem).''