“The Democrats want to block cuts to state government spending, and the Republicans want to block revenue increases because they have signed pledges to protect special interests,” David said in a statement. “Legislators were sent to Sacramento to fix problems, but now what they’re doing is making the situation worse.”

If lawmakers fail to pass an updated budget plan, state Controller John Chiang said, his office will be forced to defer billions of dollars in payments or issue IOUs to state contractors. The instability of the banking industry has made borrowing money to bridge the gap an uncertain possibility, he said.

“The state’s dire cash position not only jeopardizes and places at risk our ability to meet our financial obligations in a timely manner, it threatens our ability to respond to natural disasters and protect our communities from crime,” Chiang wrote.

Also on Monday, state employee unions filed labor complaints to stop Schwarzenegger’s plans to furlough workers as a way to deal with the state’s ballooning budget deficit.

Last week, he ordered all state employees to take two days off a month without pay or a similar salary cut to save $1.3 billion in the coming fiscal year. He also ordered state agencies to cut their payrolls by 10 percent.

The Schwarzenegger administration referred calls to the state Department of Personnel Administration.

“We have attempted to bargain under circumstances where there are no resources for pay increases, and that has made bargaining extremely difficult,” department spokeswoman Lynelle Jolley said.

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