AUGUSTA — The Legislature has five days, starting this morning, to enact a budget or face the “dreadful prospect,” as Gov. Angus S. King put it, of shutting down state government for the second time in four years.

By midnight Friday, the state will need to have a two-year budget signed into law, or once again thousands of state workers could be kept at home without pay.

If legislators don’t pass the budget by Friday, they could avoid a shutdown by passing a temporary spending order and continuing to work on a permanent budget. But King has said he would veto such an order.

After arduous negotiations by the leadership last week, the Appropriations Committee finally came up with a unanimous vote Friday night for a $3.5 billion two-year budget.

The panel’s final step was to take $2 million from the Office of Substance Abuse and use it to increase hospital tax relief, the Republicans’ No. 1 priority, to $16 million; and to increase property tax relief, the Democrats’ top priority, to $16 million.

Despite the unanimous committee vote, which had seemed impossible during weeks of 7-6 party-line voting, passage of the compromise budget this week is far from certain.

For one thing, King has threatened to veto the budget if it includes a current provision, the Income Tax Stabilization Program. But it might not reach King’s desk because Senate Democrats are almost united in opposing the same tax cap, and their votes are needed to achieve two-thirds approval.

The tax cap is a plan dreamed up by Senate President Jeffrey H. Butland, R-Cumberland, to cap income tax revenue at 1997 levels, projected at $674 million. Then starting in 1998, any excess revenue would be used to lower taxes for taxpayers in low- to moderate-income brackets.

King points out that the program could produce $50 checks for eligible taxpayers, “enough to go to the movies six times,” but end up costing the state $100 million or more in lost revenue every two years.

King has campaigned vigorously against a wide range of future tax cuts pushed by Republicans. The independent governor has warned that he will veto the budget and risk shutdown if major tax cuts are included in the budget.

But King faces a dilemma on several fronts with his veto threat, and in some respects he is in a no-win situation.

From last year’s campaign through last week’s commentary, King has maintained that no single piece of legislation or ideology is more important than keeping government functioning properly and avoiding the disaster of the 1991 shutdown.

So how does he square that with vowing to veto the budget over an income-tax cap?

Tax caps have worked poorly in other places, notably California. But voters may not understand why King would shut down state government to spare them a program that might lower their taxes.

If two-thirds of the lawmakers agree, they can pass a budget, have it vetoed by King, and then override the veto. But there could be a time between the veto and the override when government is shut down.

Besides blame for the shutdown, King faces a bigger risk with his veto threat. If he vetoes the budget and is overridden by two-thirds of the Legislature, he could end up looking ineffective and irrelevant.

Given the powerful feelings still swirling around this budget, it’s a good bet it will be changed some more on the floor this week.

“It’s pretty close to good, but the part that worries me is the income tax cap,” said independent Sen. Jill Goldthwait of Bar Harbor on Sunday. “I think there will be some alterations in that. I think we could do some fine-tuning on that item in particular. I think there’s going to be another back-and-forth before this wins two-thirds.”

Could a lesser tax cut, say repeal of the nursing home tax, be substituted for the income-tax cap and still satisfy Republicans?

“It would have to be something quite substantial,” said Senate Majority Leader R. Leo Kieffer, R-Caribou. “Our caucus is pretty firm on having some kind of tax reduction. If we keep waiting, when is the right time?

“A tax cut is important to Republicans. Within that parameter, I’m willing to talk.”

Kieffer said Republicans might be willing to trade the income-tax cap for a constitutional reserve fund of 2 percent of revenues, which King supports. That would be subject to voter ratification.

“I think the first thing that should be done is putting it to the House and Senate,” Kieffer said of the budget compromise developed Friday. “I’d like to bring it to a vote as soon as we can.”

The budget, which also contains the controversial school funding plan, is expected to encounter the most trouble in the Senate. A two-thirds vote requires the support of 24 senators. If all 18 Republican senators stick together and are joined by Goldthwait, then five Democrats have to join them to achieve two-thirds.

“I don’t see five votes in my caucus (for the budget),” said Senate Minority Leader Mark Lawrence, D-Kittery. “Within the Legislature as a whole, I don’t think it’s getting a lot of support.”

The big stumbling block for Senate Democrats is the income-tax cap.

“We have to go back to the drawing board to find what is the mix that will pass,” said Lawrence. “I’m not optimistic about this one passing. We’ve got to keep mixing things around and see what sells.”

Sen. Beverly M. Bustin, D-Augusta, was ready to support the budget, tax cap and all, but then changed her mind when $2 million was plucked from the Office of Substance Abuse, a program she strongly supports.

“I can’t imagine it going through with as much disgruntlement as there is,” said Bustin, the assistant Senate minority leader.

There were winners and losers in the budget compromise.

State employees were spared having to pay 20 percent of their health insurance premiums and losing merit pay raises. But the University of Maine System gave up $1 million and the Maine Technical College System lost $600,000.

Quality Centers, a program established by then-Gov. John R. McKernan to provide tailor-made training for industry at the technical colleges, lost most of its funding.

Today’s budget action will likely begin with party caucuses to discuss the budget compromise hammered out Friday. The earliest an initial vote is expected on the budget is during tonight’s session.