State Budget Watch

On the state’s 33rd day without a budget, here were the key developments in Sacramento:

THE PROBLEM

Legislators and Gov. Pete Wilson need to bridge a $10.7-billion gap between anticipated revenues and the amount it would take to continue all programs at their current levels, rebuild a reserve for emergencies and erase last year’s deficit. Without a budget for the fiscal year that began July 1, the state is short of cash and cannot borrow money to pay its bills. Instead, claims are being paid with IOUs, known as registered warrants.

IOUs

Issued Sunday: None.

Since July 1: 770,648 with a total value of $1.6 billion.

GOV. PETE WILSON

Met for about four hours with the top four legislative leaders in his office. They discussed health and welfare issues but failed to reach any final agreements, they said.

THE LEGISLATURE

The Assembly met at 6 p.m. but did not consider budget-related legislation. The Senate did not meet.

KEY ISSUES

Education: Wilson budget negotiators and teachers association leaders apparently agree that primary and secondary schools should get the same dollars per student next year as they did in the fiscal year that ended June 30. Because of higher enrollments, this would require a year-to-year increase in education spending of about $810 million, according to the Administration. But Wilson wants to use an accounting maneuver to take back $1.1 billion the schools received in the last fiscal year beyond what was required by the state Constitution. The teachers and state Supt. Bill Honig oppose this move because it would reduce the base on which future education budgets are built and cost the schools billions of dollars over the next five years.

KEY DEVELOPMENTS

Treasurer Kathleen Brown today will begin redeeming IOUs, or registered warrants, issued by the state at the beginning of July. Brown said warrants worth $922 million are eligible to be redeemed today. More will be eligible each day through Thursday. Holders of the IOUs may redeem them in person at Brown’s office or through the mail.