HARRISBURG — A partisan deadlock over Pennsylvania's budget stretched into the new fiscal year Wednesday, as the state lost legal authority to pay most of its bills and warned vendors that they may not be paid on time.

Nursing homes, hospitals and others that rely on billions of dollars in Medicaid reimbursements were among the vendors and contractors that were advised about the potential interruption in payments.

Spokesmen for some state agencies acknowledged that their operations depend on the willingness of vendors to extend credit. But delaying payments to vendors could force those businesses to scrape bank accounts and put off paying their own bills.

"We are not a corporation, so I don't have homes in Ohio or Florida that can get me by in a crisis," said Nancy Kleinberg, who owns the Park Pleasant Nursing Home with her sister in Philadelphia. The business typically bills the state $500,000 a month in care for Medicaid patients.

In the just ended 2008-09 fiscal year, tax receipts ended up $3.3 billion shy of expectations, adding up to a shortfall of more than 11 percent, the Revenue Department said Wednesday. Democratic Gov. Ed Rendell and GOP lawmakers, who control the Senate, have no agreement on how to resolve the deficit, and their spending proposals for the 2009-10 fiscal year are at least $1.5 billion apart.

No breakthroughs emerged from nearly 10 hours of closed-door talks between Rendell and top legislators Monday and Tuesday. High-level talks are not expected to resume until after the holiday weekend.

No counterproposals surfaced Wednesday, and with the Democratic governor and Republicans dug in to their respective positions, many observers predicted a protracted stalemate that could last for weeks.

Rendell continued to advocate a 16-percent increase in the state income tax — a major friction point with Republicans, who insist that state spending be cut to compensate for the state's lackluster tax collections.

But while the income-tax increase has support of the Legislature's top Democrats, at least some rank-and-file Democrats are balking at the prospect, and Republicans are dead set against it.