SACRAMENTO -- Releasing his last annual budget plan, Gov. Arnold Schwarzenegger on Friday proposed slashing state worker pay and making wholesale cuts in social services to close the state's $19.9 billion deficit.

Taxes would not be raised and schools would not face more cuts in the governor's $82.9 billion general-fund plan for the fiscal year that begins July 1.

But the welfare cuts would take a huge toll in the Valley, where social service agencies already are stretched to the limit, said one lawmaker.

"When the state catches a cold, the San Joaquin Valley catches pneumonia," said Assembly Member Juan Arambula, I-Fresno. "I think the impact is going to be greater in the Valley, just because we're not as well off as other parts of the state to begin with."

The plan requires legislative approval and is certain to change as lawmakers seek a compromise.

Schwarzenegger called for portions of his plan to be enacted immediately in a 45-day emergency special session.

And he again renewed his call for more money from the federal government, threatening the elimination of several welfare programs if Washington does not give up an additional $6.9 billion for the state.

"I will be relentless to get money for California because it's our money," he said, adding that the state's share of federal dollars has declined in recent years.

(A report released Friday by Sen. Barbara Boxer said California now collects more in federal dollars than it sends Washington D.C., thanks to federal stimulus money.)

But another long budget fight looks to be looming in Sacramento. Democrats immediately rejected the governor's plan to pressure Washington, vowing to protect social service funding no matter how much is pried from the nation's capital.

"Typically he threatens the Legislature, now he's threatening the president of the United States," said Assembly Speaker Karen Bass, D-Los Angeles. "We need to approach the federal government from a point of collaboration."

Unions and welfare advocates around the state bashed the governor's proposals. In Fresno, a couple dozen people protested in front of the governor's office downtown against looming state budget cuts. But Republicans gave the plan a more favorable review.

The state's budget is once again in the red because the economy is struggling to recover and previous fiscal solutions are falling short.

The governor's plan aims to close a $6.6 billion gap in the current budget year and a projected $12.3 billion shortfall in the 2010-11 fiscal year that starts July 1. The plan would leave the state with a $1 billion reserve and $82.9 billion in general fund spending, down from $87.2 billion this year.

The emergency budget session -- one of many special sessions the governor has called in recent years -- requires lawmakers to take some sort of budget action within 45 days. The deadline to pass the full 2010-11 plan is June 15, although lawmakers routinely miss the mark.

One of the major battles is likely to be over state employee pay cuts to replace furloughs, which have run into trouble in the courts. The three-day-a-month furloughs would cease at the end of June.

Instead, the plan would cut worker pay by 5% and require employees to contribute an additional 5% of their pay to pension costs. The combined 10% cut is less than the 14% pay reduction workers face in the furlough program.

Jennie Ruiz, a psychiatric technician at the state-run Porterville Developmental Center, said she was counting on soon recovering her entire salary. The governor's plan is "still wrong -- but not to such an extent. It's 4% less wrong."