Lawmakers return to work Monday with little time left to settle their differences and reach a budget agreement.
Gov. Mitch Daniels says there is legal authority to keep essential services like state police and prisons running, but most of the state's nearly 31,000 employees would be furloughed.
Republicans and Democrats have been trying to strike a compromise on a new state budget by Tuesday's deadline. They've been at odds over several spending issues, especially funding for public schools.