State Budget Watch

On the state’s 14th 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 out of cash and cannot borrow money to pay its bills. Instead, claims are being paid with IOUs, known as registered warrants.

KEY DEVELOPMENTS

* Wilson signed the emergency measure approved by the Legislature. He said court decisions implied that the state would be liable to pay fines if it withheld paychecks from employees who were required to come to work. Legislative staff mem bers, who are ordinarily paid twice a month, will be paid with IOUs today. Most state employees are not scheduled to receive paychecks until July 31.

* Controller Gray Davis announced that the state will have sufficient funds on hand July 24 to repay $475 million it borrowed from private investors to make it through the fiscal year that ended June 30.

IOUs

* Issued Tuesday: 16,680, valued at $104 million

* Since July 1: 340,364 with a total value of $611 million

GOV. PETE WILSON

Met over lunch with Senate Republicans to plan strategy for budget negotiations.

THE LEGISLATURE

* The Legislature met briefly and passed an emergency measure to pay state employees until a full budget is adopted.