2:15 p.m.SACRAMENTO — Gov. Arnold Schwarzenegger declared a fiscal emergency on Monday and called lawmakers into a special budget session, warning that California was in danger of running out of daily operating cash within two months.

The special session will force the new Legislature to get to work immediately and figure out a way to solve the $11.2 billion budget deficit in the current fiscal year. The governor’s declaration came just days after a previous special session with the outgoing class of lawmakers failed to produce a compromise.

Unless budget corrections are made quickly, the state is likely to run out of cash in February and see its revenue gap widen to $28 billion over the next 19 months.

Schwarzenegger said legislators so far have failed to grasp the seriousness of the crisis, which is growing worse by the day.

“The longer we wait, the more we will have to lay off people ... It gets worse very quickly. It’s like an avalanche, it gains momentum,” Schwarzenegger said during a news conference in Los Angeles, where he signed a series of budget-related orders.

The Republican governor and Democrats in the Legislature have proposed a combination of tax hikes and spending cuts, but Republican lawmakers have remained steadfast in their refusal to raise taxes.

Lawmakers failed to reach a compromise during the special session Schwarzenegger declared last month, pushing the problem to the new Legislature that was sworn in Monday.

Schwarzenegger said lawmakers’ failure to act has cost California an additional $1.5 billion to $2 billion because the state continues to spend at the same rate even as revenue declines.

“Now we have to make more cuts and raise more revenues because of that,” he said.

Assembly Speaker Karen Bass, in accepting her nomination to remain head of the Assembly, told her fellow lawmakers to put party ideology aside and help Californians.

“These are not ordinary times,” said the Los Angeles Democrat. “Our state continues to be rocked by the deepening national recession. Our projected deficit is growing, and the cash we need on hand is disappearing.”

But there appeared to be little reason to believe that Republican lawmakers are any more likely to support Schwarzenegger’s compromise appeal for program cuts and tax increases than they were when they rejected a Democratic proposal to do that last week.

“If anything, I think our resolve (against raising taxes) is deeper than it has ever been because of the economic realities,” Senate Minority Leader Dave Cogdill, R-Modesto, said Monday.

Democrats were expected to gain three seats in the state Assembly, but failed in the November elections to win a two-thirds majority in either house, which is needed to pass tax increases or a state budget.

Democrats proposed $8.2 billion in spending cuts and $8.2 billion in tax increases during the special session Schwarzenegger called last month, but Republicans rejected the package because of the taxes. Instead, they seek an economic stimulus program to kick-start the economy.

Schwarzenegger asked for both Monday, offering essentially the same plan legislative leaders rejected last month.

His proposal includes raising the state sales tax by 1.5 percentage points — or 1 1/2 pennies on the dollar — for three years, generating $3.5 billion in the current fiscal year.

He also seeks to expand the sales tax to include more services, increase the annual fee for registering vehicles and tax oil extracted in California.

He proposed cutting K-12 education funding by $2.5 billion and funding for the University of California and California State University systems by $132 million, as well as reducing the state’s welfare-to-work program, CalWORKS, by 10 percent. Schwarzenegger also wants to cut two paid holidays for state workers.

Bass, the Assembly speaker, has called on the federal government to use some of its economic bailout money to help California, but Schwarzenegger said the state shouldn’t go hat-in-hand to Congress until it has taken steps to fix its own problems.

Schwarzenegger and other governors were expected to meet with President-elect Barack Obama Tuesday at the National Governors’ Convention in Philadelphia. Schwarzenegger said he will urge Obama to invest in infrastructure to stimulate job creation and boost the ailing economy.

He said California already has laid the groundwork for $26 billion worth of infrastructure improvements.

“We can put shovel into the ground literally the day after he becomes president. That’s how ready we are,” the governor said.

Schwarzenegger called two special sessions, one addressing the budget deficit in the current fiscal year and another to consider an economic stimulus plan.

The stimulus session would focus on two issues: preventing more home foreclosures through loan modifications and preventing the state’s unemployment insurance fund from sliding into insolvency. The governor wants to raise the taxes employers pay into the pool and slightly reduce jobless benefits.

Without changes, the unemployment fund is projected to have a $2.4 billion shortfall next year, according to the governor’s office.

Schwarzenegger enacted the fiscal emergency under Proposition 58, the initiative approved by voters the year after he took office. It forces the Legislature to address the current-year budget deficit within 45 days.

If lawmakers do not, they would be prevented from acting on any other bills until the problem is solved.

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Associated Press writers Samantha Young in Sacramento and Solvej Schou in Los Angeles contributed to this report.