A federal judge Wednesday issued a temporary restraining order blocking New York Gov. David Paterson’s plan to save funds by furloughing state employees starting next week. Three unions sued Paterson after the Legislature Monday passed an emergency spending bill that included the furlough plan.

Paterson has said the furloughs were necessary to save money because state employee unions had not accepted concessions worth $250 million to help close the budget gap. The furloughing of about 100,000 employees one day next week would have saved the state an estimated $30 million.

The plaintiffs claim the furloughs violate collective bargaining agreements. The judge’s order also prevents Paterson from submitting emergency extender bills that do not include appropriations for already agreed-upon raises. Legislators cannot amend emergency spending bills, leaving them the choice on Monday of either enacting the measure that included the furloughs or face a government shutdown.

U.S. District Court Judge Lawrence Kahn set a hearing on the case in Albany on May 26.

The state has been operating without a budget since April 1 and may run out of cash by the end of the month. Paterson’s proposed $135.28 billion fiscal 2011 spending plan would close a $9.2 billion gap but lawmakers have balked at some cuts to education and local aid.

New York is $1 billion short of a $4 billion school aid payment due June 1, said Division of Budget spokesman Matthew Anderson. The state is considering a short-term borrowing as one option to deal with the shortfall.

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