People, Programs Feeling the Economic Pinch : State budget: The real crunch is expected at the end of the month. That's when 195,000 state employees are due to collect their paychecks.


With the state's fiscal machinery down for the duration of the budget impasse, big-ticket items are being funded by court order, but a myriad of people and programs are going without their state checks.

Some examples:

Money for programs benefiting mentally disabled children is on hold, leading one program director to take out bank loans to keep operating.

Many state employees have not been reimbursed for travel and other expenses.

Some college instructors who taught summer school classes have not been paid.

Finance officials say these and other disruptions are nothing compared to the trouble ahead if the Legislature and Gov. George Deukmejian do not agree on a budget by the end of the month, when a $500-million payroll for 195,000 state workers is due.

"We're accelerating toward a brick wall," Controller Gray Davis said Tuesday. "Hopefully, the governor and Legislature will have the good sense to jam on the brakes before a catastrophe occurs."

Cindy Katz, spokeswoman for the Department of Finance, said, "The closer we get to Aug. 1, the greater impact (the budget impasse) will have. Now, the state continues to function with a few inconveniences. There's less travel (by state employees), no new contracts, hiring may be risky. For right now, the state is still grinding along. . . . But if there's no budget by the first of the month, it will get worse."

Court orders have kept money flowing to the state's largest social and medical programs, including $688 million in payments to Medi-Cal, welfare recipients and in-home care workers. On Tuesday, a court order restored millions of dollars in local sales taxes collected for transportation improvements that had been withheld from the counties, another casualty of the budget crisis.

But not everyone has won in court. Highway workers, paid twice monthly unlike most state workers, sought a court order on Tuesday for their mid-July checks but a Superior Court judge put off a ruling until after the end of the month, when it will be time for another payday.

Programs that have been hard hit include 46 centers around the state serving 100,000 people with developmental disabilities have been unable to pay their bills. One San Diego center, which operates 16 homes serving 96 people, has been forced to borrow $2 million. Even so, the center has already closed two homes and will have to close another on Friday, said Richard Farmer, director of the Assn. for Retarded Citizens in San Diego County.

Farmer expressed outrage at lawmakers who have been unable to agree on a budget. "I think the people should look at the impeachment process for the governor as well as state legislators. I think people's memories are awfully short as far as reelection is concerned."

Also hard hit are an estimated 2,500 part-time faculty members at Cal State who taught the spring or early summer quarters and have not received paychecks. All 12,230 full-time Cal State faculty members, who are paid year-round whether or not they teach in the summer, and 18,000 non-teaching staff members are scheduled to receive monthly paychecks on July 31.

There has been no disruption of class schedules or any refusal to teach. But Paul Worthman, an official with the faculty union, warned: "Certainly, some people have said, 'You don't pay me, we don't work.' In addition to loving teaching, they're teaching to get paid."

Officials said that UC and community college systems have not been affected by the budget impasse because, unlike Cal State, their funds come indirectly from the state via the UC Regents or the local community college district. Cal State employees receive checks from the state treasury.

Anne Garbeff, a spokeswoman for the Department of General Services, said her agency has ordered a freeze on all new purchases for state agencies except food, drugs and emergency supplies. She said the budget crunch was preventing purchases of road equipment for Caltrans, medical equipment for state-funded hospitals, electrical generators for the California Highway Patrol, and kitchen equipment for state prisons.

Most supplies needed for the day-to-day functioning of state government--such as gas for state vehicles and repair services for copy machines--will continue to be purchased on credit, said Ed Fong, a spokesman for Davis.

"Most vendors who provide goods and services to the state bill us at the end of the month. As long as the vendors are willing to carry us, we're OK. But if they submit their bills and we can't pay them because there's still not a budget, then I don't know how they'll react," he said.

Davis said the budget crisis hit home recently when one of his employees in Sacramento attempted to take a taxi across town to another state government building. The worker wanted to pay for the trip with her state charge card, which is routinely accepted by cab drivers. But not this time. Two cabbies refused to accept the charge card, apparently because they feared that they wouldn't be reimbursed for the cost of the ride.

One state program that has not been fazed by the budget crisis: the California Lottery, which operates outside the state's general fund.

Another untouched expenditure--the $200 in gate money convicts at state prisons receive upon completion of their sentences. A spokesman at San Quentin Prison said that money comes from a separate fund.

Times staff writers Jerry Gillam and Virginia Ellis in Sacramento and Larry Gordon in Los Angeles contributed to this report.

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