State Budget Watch

On the state’s 17th 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 Friday: 8,924, valued at $16,865,798

Since July 1: 464,728 with a total value of $804,515,026

THE LEGISLATURE

The Assembly and Senate met briefly, but did not take up budget-related matters.

GOV. PETE WILSON

Governor was in Bay Area on state business unrelated to the budget.

KEY DEVELOPMENTS

A Senate-Assembly conference committee screened a compromise budget proposal offered by Assemblyman Phillip Isenberg (D-Sacramento) and Sen. Frank Hill (R-Whittier). The committee then sent a letter to Wilson asking him to reconvene budget meetings with the legislative leadership by 3 p.m. Monday and provide direction to the committee on several issues contained in the proposal. The conference committee is scheduled to resume deliberations at 2 p.m. Monday.

State Controller Gray Davis said the Tri-County Bank in Chico has announced that it will stop cashing state IOUs, which Davis said is the first bank to change its policy of agreeing to cash the registered warrants. Davis said several other independent banks in Pasadena and San Pedro have announced intentions to discontinue the policy.

Senate President David A. Roberti (D-Van Nuys) indicated that the budget stalemate could last until sometime in August. Asked by a reporter when the matter might be resolved, Roberti said: “Your guess is as good as mine.” When the reporter noted two years ago that the budget stalemate went until the end of July, the Senate leader replied: “This one looks like it’s going to be longer.”