Mayor Michael Bloomberg says the city is already feeling the effects of the state's failure to pass an on-time budget, and urged New Yorkers to call their state lawmakers and demand action.

The budget deadline passed at 12 a.m. Thursday.

An emergency spending plan is keeping state government running, but all nonessential spending is being delayed.

On his radio show Thursday, the mayor urged New Yorkers to call their state lawmakers and demand action.

"Not only is school aid being delayed, but road construction projects in our city and across the state are being shut down,” said Bloomberg. “And that's putting people out of work at a time when they can least afford it. And it's also leaving a mess on the roads. We need those jobs and we need the Legislature and the governor to come together and agree on a budget."

With no agreement reached to close New York's multi-billion dollar budget gap, Governor David Paterson is asking the leaders of the state's public employee unions to forgo four-percent raises scheduled to go into effect today.

"In agreeing to forgo these scheduled four-percent salary increases, the leaders of New York's public employee unions have a real and concrete opportunity to demonstrate they understand the dire nature of this fiscal and economic crisis, and that they are willing to become a serious partner in addressing it," Paterson said.

"This is just not acceptable. This is just incompetent. This is the governor not understanding that he has no credibility left to make that kind of request," said Civil Service Employees Association Spokesman Stephen Madarasz.

State Attorney General Andrew Cuomo, meanwhile, who has been silent on most issues that fall outside his official job duties, weighed in on the budget mess. He says New York needs fundamental reform on many levels.

"We are going to have to cap property taxes. Where we just say to local governments across this state, there is a cap and you can't spend your way out of these problems. We have to cut the waste and the fraud," Cuomo said.

This is the fourth year in a row that Albany lawmakers have failed to reach a budget agreement by April 1.

Also as of Thursday, lawmakers and Paterson will no longer get paid until a budget is passed.

"We have run out of money,” said the governor. “We can't meet our obligations and to continue to spend when we are in these dire circumstances is something no family would do, no company would do and certainly no government should be doing."

Paterson has resumed the distribution of tax refunds to New Yorkers. These refunds had temporarily been withheld due to a cash shortage.

The governor, Assembly and Senate agree on about $3.5 billion in cuts, but at least another $1.5 billion in reductions are still needed.

An agreement is not expected anytime soon, as lawmakers are on a holiday break until April 7.