HONOLULU -- Gov. Linda Lingle on Monday announced she will begin furloughing state workers for three days a month starting on July 1.

Lingle outlined her plans to deal with a budget an additional gap of $185 million projected by the Council on Revenues to reach $730 million by June 30, 2011.

"In short, we now have a government that we cannot afford," she said.

Lingle said the furloughs will save about $688 million over the next two years and likely keep the state from laying off workers.

The three-day furlough would cut about 13.8 percent from a state worker's paycheck over the year.

Union leaders complained that the governor is too focused on taking money out of payroll and not willing to consider tax increases or other cuts. They said they may sue to block the furloughs.

"We will certainly take steps to make sure both the law and our contracts are upheld," Hawaii Government Employees Association Executive Director Randy Perreira said.

"I would hope that the unions would work with us at this time," Lingle said.

The governor said new revenue projections put the state $100 million in the hole right now, but state lawmakers said the budget they proposed already fixed that.

There is time to address the shortfall without resorting to cutting worker hours yet, legislators said. They said the governor is using the furlough proposal to bully or avoid bargaining with the unions.

"That's who she has to bargain with. She can't bargain through you guys through the camera," Senate President Colleen Hanabusa said referring to the media.

The governor said the unions have not been willing to accept pay cuts, although no formal proposals have been made. She said the furloughs are fairer than layoffs.

The unions said they have been willing to bargain. However, they said it is not fair that workers' pay is filling 90 percent of the shortfall.

Lawmakers said the governor is not willing to work with either unions or them.

"She worked on this over the weekend. Speaker didn't get a phone call. I know I didn't get a phone call," Hanabusa said.

The governor cannot issue furloughs to workers in the Department of Education, the University of Hawaii and the Hawaii Health Systems Corp. that runs the state hospital system. However, Lingle said she will issue budget cuts that equal to furloughing workers for three days a month.

The governor said she will also ask the Judiciary, Legislature and the Office of Hawaiian Affairs to make similar furlough plans or budget cuts.

Without the furloughs, Lingle said the state would have to lay off 10,000 workers.

"I believe in spreading it so we don't need to lay off people, but still, the three days is, you know, a lot of money. So, I don't know. Everyone is having it bad right now," state worker Suzanna Ohoiner said.

"Well, I think that three days off is better than having no job at all, and I'm glad that they're doing it rather than telling people that they're going to lose their job," state worker Susan Jong said.

The state will still face a $42 million deficit after the furloughs, the governor said. That will have to be made up by other cuts to departments, she said.

Lingle said part of her plan to make up the $42 million is to cut the amount of money the state pays for low-income adults currently getting free health care. She stressed that it would not affect the free health care for children of low-income families.

"The reduction of $42 million represents about 4.3 percent of the total amount the State spends on health insurance under the Medicaid program," Lingle said in her address.

The economists in the council predicted that the state will see a 9 percent decrease instead of the earlier-projected 5 percent drop in tax revenues.

To make up some of the shortfall in the last 30 days of this fiscal year, Lingle ordered the budget director to delay paying some bills until July. The bills include payments to the state employees' health and retirement funds and reimbursements to managed care health plans for Medicaid expenditures.

Lingle said the payments will be made a few days late and will not affect coverage or benefits.