Gov. Arnold Schwarzenegger plans to cut the pay of state workers to minimum wage if a timely budget accord is not reached, according to a memo sent Wednesday from the director of the governor's Department of Personnel Administration to state agency and department heads.

The memo, written by DPA director Debbie Endsley, also warned that Schwarzenegger could order more controversial furloughs, even though the state's final scheduled furlough day for tens of thousands of employees was last Friday.

"The Governor retains the right and authority to order furloughs if necessary to address a fiscal and cash crisis," Endsley wrote.

The new fiscal year begins July 1, but lawmakers and Schwarzenegger remain far from an agreement on a spending plan. Democratic lawmakers in the Senate and Assembly still have not unified behind one budget plan, while Schwarzenegger and legislative Republicans have stood behind the governor's May proposal to eliminate welfare and trim billions from state spending.

Schwarzenegger tried in 2008 to pay workers minimum wage when the budget talks stalemated, but state Controller John Chiang, a Democrat, refused. A lower court judge ruled against Chiang and the issue is now before the 3rd District Court of Appeals.

In the Wednesday memo, Endsley wrote that "absent a state budget, we will send instructions to the Controller to pay [minimum] wages ... for the July pay period." The paychecks for that pay period are issued at the end of July. Once a budget is signed, workers would be entitled to their full back pay.

The threat is intended both to speed up budget negotiations in the Legislature and to push union leaders to the collective bargaining table. Last week, Schwarzenegger announced tentative deals with four labor unions. If ratified, those workers would be exempt from the minimum wage order, as Endsley noted in the memo.