State Budget Watch

On the state’s 15th 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.

IOUs

Issued Wednesday: 17,732, valued at $17 million.

Since July 1: 358,096 with a total value of $628.5 million.

THE LEGISLATURE

The Assembly and Senate did not convene.

GOV. PETE WILSON

Met with Assembly Republican caucus to plot strategy for negotiating on the budget. Met with several big-city mayors, including Tom Bradley of Los Angeles, and representatives of the League of California Cities.

KEY DEVELOPMENTS

State Controller Gray Davis paid 17,000 state employees, including 5,000 Caltrans maintenance workers and 3,500 legislative employees, who either got regular paychecks or IOUs, depending upon the source of their funding. About 8,500 psychiatric technicians also received IOUs.

Bradley and mayors of several other cities also met with Assembly Speaker Willie Brown (D-San Francisco) to discuss the consequences of reversing post-Proposition 13 bailout aid to cities, a measure being sought to help resolve the state budget crisis.

Standard & Poor’s announced that the state’s credit rating has dropped from AA to A+ on $13 billion of outstanding bond debt.