Governor threatens to furlough workers 3rd day CALIFORNIA'S FISCAL CRISIS Governor issues threat as legislators fail again to fix $24 billion deficit

Gov. Arnold Schwarzenegger answers a reporters question concerning the state's pending cash crisis at the Capitol in Sacramento, Calif., Friday, June 26, 2009. State Controller John Chiang has warned that California will be forced to issue IOU's instead of payments next week unless Schwarzenegger and state lawmakers can come up with a solution to the state's $24.3 billion deficit.(AP Photo/Rich Pedroncelli) less Gov. Arnold Schwarzenegger answers a reporters question concerning the state's pending cash crisis at the Capitol in Sacramento, Calif., Friday, June 26, 2009. State Controller John Chiang has warned that ... more Photo: Rich Pedroncelli, AP Photo: Rich Pedroncelli, AP Image 1 of / 1 Caption Close Governor threatens to furlough workers 3rd day 1 / 1 Back to Gallery

Gov. Arnold Schwarzenegger threatened Friday to force state workers to take a third unpaid day off each month beginning in July unless the Legislature approves a budget that solves the state's $24.3 billion shortfall by Tuesday.

The state's 210,000 workers are already forced to take two furlough days. A third would result in a total pay cut for each worker of 14 percent, saving California more than $2.2 billion in the new fiscal year that begins on July 1.

"It's clear that if the Legislature does not send a full budget solution to my desk by June 30, California will face an extreme cash-flow problem that will threaten our ability to pay for vital services," the governor said.

Schwarzenegger said imposing an additional furlough day would help stave off the state's cash crisis.

State worker union leaders said they were disappointed by the governor's threat.

"This is absolutely ridiculous. The governor has made us into budget scapegoats," said Nancy Swindell, president of the American Federation of State, County and Municipal Employees AFL-CIO Local 2620 that represents 5,000 state health and social services workers.

For a third straight day Friday, no progress was made in the Capitol on the budget crisis.

Lawmakers were unable to reach an agreement on how to close the massive shortfall. Democratic lawmakers, once again, put up portions of their budget proposal and Republicans refused to support them.

The Assembly voted on the same bill that was introduced Wednesday - to cut spending by $11.4 billion - but it failed again to clear the required two-thirds majority without GOP support.

3 other bills failed

The state Senate took up three other bills that would have raised billions of dollars in additional revenue by various accounting maneuvers. They included the early collection of taxes, increasing tax withholdings in paychecks, adding fees on homeowners to fight wildfires and fees on motorists to keep the state parks open.

But the bills failed, with Republicans arguing for deeper spending cuts and no new taxes.

Senate President Pro Tem Darrell Steinberg, D-Sacramento, argued that all of the bills that Republicans rejected since Wednesday amount to more than $21 billion worth of solutions that included cash-saving measures to avoid next week's possible issuance of IOUs and delay the state's cash crunch by at least a month.

The Senate leader said Senate Republicans are playing a "dangerous game of chicken" by refusing the Democratic proposals.

IOUs to begin Thursday

State Controller John Chiang has said California is on pace to run out of cash by July 28, and he will begin issuing IOUs on Thursday to begin conserving cash so that he can make constitutionally mandated payments such as debt payment and money to schools.

Schwarzenegger has argued that with the end of the fiscal year just a few days away, the only way to avoid a financial disaster is for lawmakers to get the budget done by Wednesday.

"It's extremely important that we work overtime now," he said outside his state Capitol office. "We work hopefully to 12 o'clock midnight sometimes, every day, during the weekend and not take off at all and just concentrate on getting the budget done."

The governor said he hopes to talk with legislative leaders today. Steinberg and Assembly Speaker Karen Bass, D-Baldwin Vista (Los Angeles County), have scheduled floor sessions for Sunday evening.