SPRINGFIELD, Ill. – Thousands of state workers converged on the Capitol Monday to ratchet up pressure on the Blagojevich administration to end a stalemate over a new union deal before the current one expires next week.

A new contract for more than 35,000 state employees represented by the American Federation of State, County and Municipal Employees remains at an impasse after seven months of negotiations.

The four-year contract expires June 30, and it would be the first time state workers would be without a labor contract if a new deal isn’t reached by then. A strike is a possibility after that, union officials acknowledge.

Gov. Rod Blagojevich’s office won’t talk specifics about the dispute or what’s holding up the contract. Union officials say the administration wants workers to pay much more for health care and pension benefits without giving them pay increases sufficient to deal with the extra costs.

“With more money deducted for pensions and pay increases that don’t match it, employees end up in the hole,” AFSCME spokesman Anders Lindall said.

Workers rallied at the Capitol before marching to a downtown Springfield hotel for more negotiations.

A sea of green shirts poured out of white buses headed for the Capitol steps Monday morning. Springfield Police did not have a crowd estimate, but Lindall said AFSCME bused 4,000 members to the rally – including health care workers, educators and law enforcement officials – and estimated another 1,000 joined the group that chanted and waved signs through downtown Springfield.

Lt. Robert Ellinger said the contract dispute adds more of a financial strain especially since he, his wife, two children and their spouses all work at a prison Blagojevich is trying to close.

“We already pay a good dividend for health insurance and we also pay a good part for our own retirement and now they want to take more from us in this tough economy and it’s not right,” said the 25-year veteran who works at the Pontiac Correctional Center.