California Governor Arnold Schwarzenegger on Wednesday declared a state of emergency in California.(Mark Ralston/AFP/Getty Images)

California Governor Arnold Schwarzenegger declared a state of emergency due to the state's dire financial situation on Wednesday.

The governor has been wrangling with state lawmakers for months over how to deal with a projected $19 billion budget shortfall.

His declaration places added pressure on legislators to work out a solution to the budget, which is nearly one month overdue.

To cope with interim cash problems, Schwarzenegger ordered that many state employees take three unpaid furlough days off per month. Several weeks ago, he gave the controversial order for 200,000 state workers to be paid minimum wage.

“Without a budget in place that addresses our $19 billion budget deficit, every day of delay brings California closer to a fiscal meltdown,” said Governor Schwarzenegger in a statement on Wednesday.

The furlough days will start for the state employees in August and will end when the budget is passed, highlighting the state's need to pay off its debt as well as keep operating costs in check.

California Highway Patrol and Department of Fire and Forestry Protection workers as well as the Franchise Tax Board are exempt from the furloughs.

This isn't the first time California, the world's eighth-largest economy and home to some 35 million people, has had to push the budget process past the deadline.

Last year, the state controller had to issue IOUs rather than actual payments.

“The State Controller [John Chiang] has indicated he could be forced to issue IOUs starting in August in order to avert a cash crisis,” Schwarzenegger said. “Our cash situation leaves me no choice but to once again furlough state workers until the legislature produces a budget I can sign.”

The worker furloughs were decried by labor unions.

"Furloughs are bad for state scientific programs which deliver services to the people of California, and they are bad for the economy. They are also illegal,” said Patty Velez, President of the California Association of Professional Scientists, in a statement.

She added that the labor union will challenge the furloughs in the California Supreme Court.