(Adds bills were sent to governor, rating agency comments from Monday)
CHICAGO, July 4 (Reuters) - The Illinois Senate on Tuesday gave final approval to a $36 billion fiscal 2018 spending plan and big income tax hike aimed at ending an unprecedented budget impasse that threatens to push the state's credit rating to junk.
The Senate passage, which followed House approval of budget bills on Sunday and Monday, sent the legislation to Governor Bruce Rauner, who has vowed to veto the $5 billion tax package.
A stalemate between Republican Rauner and Democrats who control the legislature has left the nation's fifth-largest state without a complete budget for two-straight fiscal years. While fiscal 2018 began on Saturday, lawmakers have been scrambling to piece together a spending and revenue plan to avoid Illinois becoming the first-ever U.S. state whose credit is rated junk.
The budget votes breezed through the Senate with little debate. For the measure that raises personal and corporate income tax rates, only one Republican voted "yes," Senator Dale Righter, whose district covers one of the most cash-poor universities in the state, Eastern Illinois University.
The tax increase bills lead sponsor warned that without a budget, Illinois universities would risk losing their accreditation, road construction would cease and pieces of the states social-service network faced closure.
"Right now, in this moment, in this time, on this day, the choice is simple. Either we live to fight another day or we watch the state crash, said Democratic Senator Toi Hutchinson.
The Senate's approval of the three budget bills on Tuesday came despite a plea from newly installed Senate Republican Leader Bill Brady to vote against the package to allow further negotiations on a property tax freeze and a change in how injured workers are compensated by employers, among other things. Those issues are priorities that Rauner had attached to budget talks, but have not advanced.
"Its regrettable I stand today not capable of supporting this package, not necessarily because whats in the package is bad but because its incomplete, said Brady, who took over as Senate Republican leader Saturday after his predecessor, Christine Radogno, abruptly resigned.
Two of the three budget bills that passed achieved the bare-minimum 36 votes needed. That is the same number of votes that would be needed to override a veto by Rauner, which is likely. The third part of the package that contained specific appropriations passed with 39 votes.
House action on budget bills elicited hopeful comments on Monday from S&P, which called it "a meaningful step," and Fitch Ratings, which pointed to "concrete progress."
The measures include a plan to issue up to $6 billion of state general obligation bonds and borrow money from a myriad of funds earmarked for specific purposes to pay down $8 billion of the $15 billion unpaid bill backlog Illinois amassed largely during the impasse.
Illinois already pays the biggest interest rate penalty among states in the U.S. municipal bond market. A junk rating would make selling debt even more expensive and difficult.
(Editing by Matthew Lewis)