Sacramento -- As the Legislature's constitutional deadline to pass a budget approaches, some lawmakers now acknowledge they might end up passing a gimmick budget that delays a comprehensive solution to California's fiscal crisis.

Republican and Democratic lawmakers remain deadlocked over whether tax increases are needed to close a $38.2 billion cash shortfall, leading some to conclude that lawmakers will pass a budget that balances on paper only.

That could leave California wallowing in even more debt and on the outs with Wall Street.

"I'm afraid we're going to be putting off the big problems," said Assemblyman Mark Leno, D-San Francisco. "It's not what I think is wise, but I think that is what we are going to be forced to do."

California's Constitution requires the budget to be approved by a two- thirds majority in the Legislature, meaning a handful of minority Republicans will have to go along with any final spending deal.

But Republicans have said they will not vote for tax increases, which make up $8 billion of the Democrat's budget proposal. That leaves Democrats -- who have vowed not to accept deep cuts that threaten services for the poor and disabled -- left to decide how to make the budget balance.

If Democrats decide sitting through a stalemate won't change GOP minds, they may agree to a budget that moves a lot of the tough decisions until next year.

The state is already doing some of that. Both Republicans and Democrats have agreed to roll over $10.7 billion in debt with bonds. Some spending cuts are being deferred from one budget year to the next by moving the payment dates.

A "get out alive" budget would use accounting tricks to help the state balance its books on paper, but create more problems in future years. For example, the state can shift cuts from one budget year to the next by simply delaying payments from June 30 to July 1, the start of the next fiscal year. Lawmakers could also take $2 billion in onetime federal money and spend it on continuing programs, leaving the state looking for that money again next year.

It's not good policy, but it's certainly possible, said Assemblyman John Campbell, R-Irvine, a member of the budget conference committee.

"It's frankly easier to get votes for a paper-over budget than one that really deals with the issues," he said. "Because one that deals with the issues would have to make more spending reductions than one that defers into next year."

One banker at a major Wall Street investment bank, with particularly close ties to the state, said the state risks losing access to more credit financing if that happens.

"It is not completely out of the question that at some point in the near future -- if there is no broad-based solution coming out of the Legislature and the governor -- that in order to obtain cash for current operations, bankers and investors will insist upon severe restrictions on how the state runs its business," said the banker, who spoke on condition of anonymity. "And that is not in the state's best interest. . . . They need to instill confidence in people who lend them money."

California is already skating on thin ice with Wall Street. The state was able to get backing for an $11 billion loan last week, but not everyone wanted to participate.

Of the approximately 40 banks the state solicited for participation, only seven ultimately agreed. Bear Stearns refused to participate, the banker said, and others, including PaineWebber and JPMorgan, felt the fees they would be paid would not justify the risk.

It is possible Democrats and Republicans will each stick to their principles, leading to a long stalemate. The Legislature faces a June 15 constitutional deadline to pass a budget, and the governor is required to sign a plan by July 1, though both branches of government have routinely missed their deadlines in the past.

"We'll be here all summer," said Assemblywoman Jenny Oropeza, D-Los Angeles,

who chairs the budget conference committee. "We're not going to make the number of cuts required to make up that kind of a gap. We're just not going to do it."

A spokesman for Gov. Gray Davis said he remains committed to finding a budget solution that includes structural reform and is on time.

"The governor wants a real solution. He is not willing to accept a paper overed plan just so the Legislature can go home," said Davis spokesman Steve Maviglio.

But Leno thinks Republicans have Democrats right where they want them.

"They are holding us hostage," he said. "It's part of the Republican game plan -- they are going to tie our hands, make us put off all problems until next year, which is an election year. Then we won't be able to borrow any more,

they won't raise taxes, and we'll have to cut.

"It's a brilliant plan," he added. "But it is completely disrespectful of the well-being of the state of California."