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FRANKFORT (AP) - Seeking to break a prolonged budget standoff with the Senate, Kentucky House Speaker Greg Stumbo floated a last-minute offer Wednesday night that would hand over authority to the governor to continue funding state government for up to a year.

Stumbo's proposal for a so-called continuation budget amounted to a major concession by House Democrats because it would not allow the state to incur additional debt while in effect.

His caucus is comfortable with the plan until a budget can be formulated, Stumbo, D-Prestonsburg, told reporters before meeting privately with Senate leaders to discuss his offer.

The latest development came after top lawmakers made no progress toward an accord on a two-year spending plan before the General Assembly's final gavel sounds this week. Lawmakers returned to the Capitol on Wednesday to start a scheduled two-day wrap-up session.

Earlier, Senate President David Williams said it appeared "pretty much inevitable" that lawmakers would leave town without a new budget for the fiscal year beginning July 1. The lack of a new spending plan would set the stage for a special session, a politically unpopular move that would cost taxpayers about $64,000 a day.

If lawmakers fail to enact a budget before the fiscal year begins, it would lead to the shutdown of some state services.

Stumbo said a continuation budget would ensure that funds keep flowing to state operations. He said his proposal would allow Gov. Steve Beshear to fund state government at status quo until at least April 15, 2011.

"At least we'd have a spending plan, we'd have the appropriation authority in place for the governor to continue operating government," Stumbo said.

Stumbo, D-Prestonsburg, said some details still needed to be worked out because "it's never been done before, so there are some concerns."

Senate leaders did not immediately comment on the speaker's offer.

Stumbo acknowledged that the proposal would not include any new projects. House Democrats have insisted on a new budget that includes a stack of school construction, water and sewer projects - which turned into the biggest sticking point in the impasse with the Senate.

Top House Democrats say the projects would create thousands of badly needed jobs amid stubbornly high unemployment while adding manageable amounts of debt. Senate Republicans say the bonded projects would add too much state debt in uncertain economic times.

Williams, R-Burkesville, said earlier Wednesday that the insistence on projects by House Democrats showed "they are out of tune and out of touch with reality in the world that we live in today."

Before floating the continuation budget, Stumbo said House Democratic leaders scaled back the construction projects to about $200 million in borrowing, down from about $1 billion originally backed by the House to replace dilapidated schools and do other projects.

With a continuation budget in place, lawmakers could be brought back in a special session to pass a new budget or could wait until next year's regular session, Stumbo said.

With Kentucky's economy still trying to recover from the deep recession, one problem could arise if the state's tax collections failed to keep pace with current spending levels. That could result in budget cuts by the governor to maintain a balanced budget.

Stumbo said he spoke with Beshear about the proposed continuation budget, and said that the governor still wanted lawmakers to agree on a new budget.

Beshear did not offer immediate comment on Stumbo's latest proposal.

Earlier in the day, Beshear gave his toughest statements during the impasse, warning that lawmakers on this year's ballot risked a backlash from voters if they failed to pass a budget.

"There is no reason that they can't enact a budget by midnight tomorrow night except if they allow personal interests or egos to get in the way of the will of the people," he said.

The Senate passed a $17.3 billion two-year budget last month that called for deeper spending cuts to almost all state agencies than the House's $17.5 billion version.

Copyright 2010 by The Associated Press. All Rights Reserved.