HARTFORD, CT (AP / CBSNewYork) – Gov. Dannel P. Malloy said his administration is beginning the process Tuesday of issuing 4,742 layoff notices to Connecticut state employees because a two-year, $2 billion labor savings deal has not yet been reached with unionized workers.

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The Democrat said in a statement that the Office of Policy and Management will begin issuing the notices “in an orderly fashion,” despite efforts to complete a deal over the weekend and Monday night, into early Tuesday morning. Talks were expected to resume later on Tuesday. If a deal is reached, the layoffs, effective July 1, would be rescinded.

The layoffs are expected to save $455 million in the first year of the two-year, $40.1 billion budget. To make up the $545 million difference, Malloy has also ordered OPM to begin the process of making additional spending cuts. Malloy’s budget chief last week provided the Democratic governor with a Plan B budget that included $1.2 billion in additional possible cuts that affected all aspects of state government and included large reductions in state aid to cities and towns – something Malloy has tried to avoid increasing local property taxes.

“I want to be clear that this is not the road I wanted to go down,” Malloy said in a written statement. “I didn’t want to lay people off, and I didn’t want to make additional spending cuts beyond the $780 million in spending we’ve already cut. But I have no choice.”

The budget signed into law raises taxes by about $1.4 billion in the first year. Malloy has said he’s unwilling to raise taxes any higher. The State Employees Bargaining Agent Coalition, which represents 15 state employee unions in the closed-door talks, said it was disappointed that Malloy had begun the layoff process but was willing to keep talking.

“Despite the fact that the governor has indicated layoff notices will commence later Tuesday morning, SEBAC leadership has decided to continue meeting with the Malloy administration, for at least one more day, in the hope of achieving a just and fair outcome. The discussions have been extraordinarily complex and demand our continued efforts to find mutual resolution,” according to a statement posted on the union leadership’s website.

SEBAC reiterated that laying off public or private sector workers at a time when Connecticut’s unemployment rate is 9.1 percent “will prove disastrous to our shared goal of creating jobs and rebuilding the middle class.”

There are approximately 45,000 unionized state employees in Connecticut.

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