SPRINGFIELD - Setting up a showdown over tax increases, Gov. Pat Quinn on Wednesday vetoed part of the state budget lawmakers had approved, saying it would have forced "disgraceful and shameful" cuts to Illinoisans who need state help the most.

As a result, Illinois currently has no budget as it heads into the opening days of the 2010 budget year. Lawmakers aren't scheduled to be back for nearly two weeks. A July 14 session has been scheduled during which lawmakers may again consider raising taxes or cast aside Quinn's veto and force their budget on his administration.

What Quinn rejected Wednesday was only one part of the budget, the part that includes billions of dollars worth of grants to local, not-for-profit groups who, on behalf of the state, provide care and services for the disabled, elderly, poor and addicted.

Those grants can total $10 billion a year. The plan lawmakers approved covered about half that.

"I had no choice," Quinn said of his veto. The remainder of the budget plans - which cover education, prisons, police and the rest of state government - have not yet been acted upon. Although there's no budget, state offices remain open, prisoners remain behind bars, police patrol the highways and taxes will still be charged and collected.

In fact, the lack of a budget for now may mean very little for most state agencies. Court orders require the state to make public aid payments regardless of the budget status. And the last time the state found itself in a similar position, a court told the state to continue sending out paychecks while the budget remained up in the air.

But the situation is different for the service providers who are not part of state government but rely on state grants to make payroll and cover other expenses.

House Speaker Michael Madigan, a Chicago Democrat, called the veto "regrettable" and said the question the governor should be asking is whether some funding for those services is better than no funding, which is where those groups now are as a result of Quinn's veto.

"The governor complains the budget is not balanced," Madigan said. "What he really means is he wants more money."

The political scenario is this: Republicans and Democrats alike agree they cannot balance a nearly $12 billion deficit with cuts alone. Democrats control state government but were unable to muster the votes to raise taxes to fix the budget. Now, because legislators missed the May 31 budget deal deadline, Republican votes are needed for any solution and Republicans aren't keen on voting for tax increases, especially before spending cuts have been made. But Democrats didn't embrace the tax hike, either, when it was voted on in May.

Madigan, who supports an income-tax increase, said he didn't think there would be enough votes to raise taxes until state services and programs begin to shut down and public pressure builds on members of the General Assembly.

So far that hasn't happened.

Before leaving Springfield late Tuesday after budget talks again fell apart, many suburban lawmakers said their voters back home don't want to pay more.

As budget realities began to set in, Crystal Lake Republican state Rep. Mike Tryon said he's been receiving more calls from people concerned about cuts and pressing him to support higher taxes.

"But way more no-tax increase calls," Tryon said.

The coming days are likely to be filled with news reports of service and care providers turning away clients and families because the state will no longer subsidize their therapy and care.

Mattoon Republican state Sen. Dale Righter said it was "horribly irresponsible" to use these families as pawns.

But it's clear there is no consensus on how to fix the state's budget. And Quinn's behavior in budget negotiations has raised red flags among many lawmakers. He's been against and for temporary spending plans, warned of massive service cuts but then said he wouldn't make them and has varied on exactly what kind of tax hike he wants.

"The governor's flip-flops," Madigan said, "have not helped."