(AP) - Gov. David Paterson is ordering 8,900 state workers be laid off after unions refused concessions amid a staggering economic downturn.

Budget Director Laura Anglin tells The Associated Press that Paterson is calling for the first state layoffs since the late 1990s after unions refused to even provide counter proposals. The state employs about 199,000 people.

The layoffs could begin July 1.

Anglin says unions have been informed, but could still try to return to the table in the coming days before a budget is negotiated.

She says the layoffs will save nearly $500 million over two years. The state faces a $16 billion deficit this year.