HONOLULU -- The state's largest public unions are headed back to the bargaining table on Monday.

The unions said they are ready to present an offer for furloughs and pay cuts to help deal with the state’s financial crisis.

The counties, the Department of Education and the University of Hawaii have agreed to the offer in principle.

Gov. Linda Lingle said Wednesday that the state budget shortfall has increased by about $56.7 million to roughly $786 million.

That means layoffs and furloughs may need to be drastically higher than originally predicted.

The even bigger shortfall means state worker layoffs may be worse than the original estimate of 2,500, or pay cuts may have to be higher than the 14 percent the Lingle administration wanted to achieve through furloughs.

By the end of the week, the governor said she plans to send letters to union leaders with position titles and names of the people who would be laid off.

Hawaii's mayors said they hope Lingle will attend negotiations on Monday. The unions are ready to present a formal offer to the state for a 5 percent pay cut or one day a month furloughs, according to sources familiar with contract talks.

All four of the state's mayors support the proposal as a way to begin negotiations.

On Wednesday night, the mayors and officials from the university, the Department of Education, the courts and Hawaii Health Systems went to the Capitol to meet with the governor and tell her they have agreed to the proposal and want her to sit down and hear the unions' offer.

The mayors say the governor agreed to attend negotiations as long as they are official and on the record.

Property taxes also are expected to plummet further next year, leaving the state’s counties in financial trouble. All of the mayors have said they may need to furlough employees beginning next summer, but not this year.

Lingle unsuccessfully tried to furlough state workers three days a month to cover a shortfall of about $730 million. Now, she said year-end tax revenues came in about $56.7 million lower than expected last month.

Does this mean the governor will have to increase the number of layoffs planned?

"I think it's a little too early to answer that question, because we do continue to meet with our departments, finding additional savings, additional ways to cutback," she said.

Workers at the Department of Transportation will not face layoffs, because their jobs are not funded by the general treasury, but by user fees and gas taxes, she said. Other departments that will not face layoffs include Hawaiian Homelands and the Department of Commerce and Consumer Affairs.

"So that means the numbers are that much higher in the remaining departments," Lingle said.

Lingle said she wants the public to brace for fewer government services.

"We will not be the same government when we come out of this process. We can't be the same government we were a year ago and survive financially, because we have billions of dollars less money than we had counted on. So, we can't possibly look the same or act the same," Lingle said.