For Her Eyes, Bottom Line Is the Prize : Finances: Chief of the controller’s accounting unit monitors the ebb of revenue and the flow of state spending for signs of red ink.

Imagine bringing home a salary of $40 billion a year and still not being able to make ends meet. Try as you might, those bills keep piling up, and your checkbook just will not balance.

That is the pickle California’s state government finds itself in this month. And as in many of the state’s 11 million households, someone in government is watching the ever-dwindling balance in the checking account and searching for ways to shore up the family finances.

Carla Lenerd is the person whose job it is to tell state officials when they are out of cash. With the state spending far more than it is taking in, that day is coming soon.

“We’ve maxed out all our credit cards and we’ve exhausted our line of equity credit at the bank,” said Lenerd, chief of the state controller’s accounting division. “Our bills are due and payable. Our paycheck is there but is nowhere near sufficient to pay our bills.”

Although Lenerd has no control over how much money legislators and the governor raise and spend, she always has her eye on the bottom line.

As each bill comes in, Lenerd’s office determines whether the claim is consistent with what the Legislature has appropriated. At the same time, her staff checks to see if the state has enough money to pay the bill.

Lenerd adds up the bills as the state pays them, totals the money coming in from taxpayers and estimates how much longer the state can go before the ledger turns red. By her figuring, the state has until June 30. Soon after, if Gov. Pete Wilson has not signed a budget providing borrowing authority for the new fiscal year, the state, for the first time since the Great Depression, will pay its creditors with IOUs.

Although 1992 is extraordinary, the state has a cash flow problem even in good years because the tax receipts come in ebbs and flows while the bills arrive in a steady stream.

The sales tax might be $500 million one month and $2 billion the next because of differing deadlines for businesses. The income tax, of course, peaks in April, when $4 billion might arrive with the annual returns. In other months, one-tenth as much may flow into state coffers.

On the other side of the ledger, bills for gas, electric and telephone service, among other things, stack up each month. Twice a month, the state writes checks to doctors and hospitals who treat the poor. And at the end of every month, the state has to pay $1 billion-plus to the public schools.

To flatten the peaks and dips of this fiscal roller coaster, the state borrows billions near the start of each year by selling notes to private investors, then redeems the notes, with interest, later when the tax receipts come in.

Lately, though, that borrowing has not been enough. In three of the past four fiscal years, the state has spent more than it took in, and last year ended with a record deficit of $1.3 billion.

In each of those years, the state would have run out of cash by June had it not borrowed from state funds set aside for specific purposes.

Lenerd said it is like having several savings accounts, and deciding which you are going to tap to keep your checks from bouncing.

“There’s the vacation savings account, the retirement savings account, or the one-I-will-not-touch-except-for-death-and-dismemberment savings account,” she said. “You have to make that decision.”

This year, the state has borrowed all it can from all its accounts. In desperation, the governor has granted authority to the state controller to ask private banks for a $400-million loan that the state will not be able to repay until after the start of the next fiscal year. If that bailout were not on the horizon, the state already would be using IOUs, known as registered warrants.

But even this last-ditch effort may not keep the state from running out of money. The crisis will ease if the Legislature passes a budget and the governor signs it by July 1. With a spending plan in place, the state once again would be able to borrow from private sources to even out its cash flow. But if the new fiscal year begins without a budget, Lenerd said, her office will have no choice but to pay its bills with warrants.

Lenerd’s boss, Controller Gray Davis, is calling on lawmakers and the governor to compromise to avert the issuance of IOUs. Wilson insists on erasing the deficit in one year and balancing the budget without raising taxes. Democrats are trying to raise taxes on business and the wealthy and take two years to pay off the deficit.

Issuing registered warrants, Davis said, “is tantamount to surrender.”

State Treasurer Kathleen Brown said issuing IOUs would be a “political disgrace,” and one that is avoidable. “It just requires the tough decisions from the governor and legislators.”

The politics mean little to Lenerd, the keeper of the checkbook, who just wants to have enough money to pay the bills.

“We don’t have the cash and I don’t have any place to go to borrow it,” Lenerd said. “There’s none left.”