The State Senate standstill in Albany is affecting more than just school governance in the city.

Mayor Michael Bloomberg says it is also causing financial problems in an already rough economic climate, which could force more belt-tightening.

The mayor Monday issued an immediate hiring freeze for certain city workers which he says will last indefinitely.

Among the positions that will not be filled: 250 NYPD recruits, 150 firefighters, 151 traffic agents, and 34 9-1-1 operators.

The mayor says part of the problem is that Albany lawmakers do not understand the significance of deadlines.

"I thought they would solve their problems two, three weeks ago," said Bloomberg. "I don't think anybody expected this to go on; yet, it does. Does it mean it's going to go on forever? Common sense says that they will have to at some point come up with a resolution. This is the fourth-largest state in the country and it's fundamentally not functioning."

Earlier this year, the City Council and the mayor reached a budget deal that included a sales tax increase. In order for the sales tax to take effect, both the State Senate and State Assembly must vote to approve it.

The Assembly approved the tax but it has not yet passed in the Senate, becoming one of the many time-sensitive bills that have become a casualty of the June 8th power grab by Republicans and two rogue Democratic senators.

Last week, the Board of Education once again took over the city's education system after the Senate failed to act on a measure to renew mayoral control of the schools.

Bloomberg says the city may lose up to $60 million a month if the sales tax increase does not go through.

Meanwhile, State Comptroller Thomas DiNapoli has asked an Albany court if the state can legally hold the paychecks of the senators who have been battling over leadership for more than a month.

Governor David Paterson has been pushing to withhold lawmakers paychecks and expense checks until they return to a working session.

This comes as the governor is reportedly telling his own party members they may want to accept turncoat State Senator Pedro Espada Jr. in a top position.

Republicans named Espada as Senate president after he and fellow Democrat Hiram Monserrate voted with the GOP during its power grab June 8th. Monserrate returned to support his party, creating a 31-31 stalemate, but Espada has remained a staunch supporter of the Republican coalition.

Democrats have refused to recognize Espada as Senate president.

In Monday's New York Daily News, Paterson said it may be time for Democrats to accept Espada in the role as a way to break the legislative logjam. Espada also told the News that Democratic opposition to the idea of him as Senate president is weakening.

Senators held another fruitless session Monday – gaveling in and out without voting on or discussing any legislation.

Spokespeople for both parties say negotiations to end the dispute are ongoing.

A Queens lawmaker says he has the solution to the Senate gridlock.

Assemblyman Michael Gianaris joined advocates and legal scholars today to present an interpretation of the state Constitution that would allow the governor to appoint a lieutenant governor that would serve until the next general election.

"If we had a Republican in office and the Senate was in its state it's in right now and we needed this in order to get this state moving again, I would be the first one on line to say this is what the law provides and this is the way out of this mess," Gianaris said. The fact is law is the law is the law. This is not for me about politics. This is about a clear reading of the law."

But State Attorney General Andrew Cuomo says the state constitution clearly states that when there is a vacancy in the office of lieutenant governor, the temporary president of the Senate takes over those duties.

Cuomo called the proposal politically convenient, saying: "It is not constitutional.... Contrary to the proponents' goal, we believe it would not provide long-term political stability but rather the opposite, by involving the governor in a political ploy that would wind through the courts for many months."

Paterson acknowledged the plan, thanking those involved for working on it, but did not comment on whether or not he would consider it.