Democratic leaders announced Thursday that the state will not have a budget in place by Friday's deadline.

That means that Gov. Dannel Malloy will run the state's finances for at least two and a half weeks starting Saturday, a so-called nuclear option that means massive cuts to schools and social services.

The bare-bones backup budget immediately cuts nonprofits and many services by up to 10 percent.

Malloy has urged state lawmakers to pass a temporary, stop-gap budget to prevent some of the most painful cuts, but top Democrats in the state House say they would rather vote on a full two-year budget on July 18.  In the state Senate, both parties say they were prepared to vote on the plan.

"The governor will run the show," says state Rep. Joe Aresiowicz, a Democrat and the state's House speaker. "We're fairly comfortable in his ability. He's the duly elected governor of the state of Connecticut. He will not do anything to permanently damage this state, and we'll be in it less than three weeks."

The Democrats want a plan that includes a sales tax hike that Republicans adamantly oppose.

State Rep. Themis Klarides, a Republican from Derby, expressed exasperation.

"I don't know what else it will take, between GE leaving, Aetna moving out," he said. "When they left and were moving out, they said the same thing."