State Budget Watch

On the state’s 27th day without a budget, these 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.

The state is short of cash and, without a budget for the fiscal year that began July 1, cannot borrow money to pay its bills. Instead, claims are being paid with IOUs known as registered warrants.

IOUs

Issued Monday: 12,001, valued at $27 million.

Since July 1: 639,099, with a total value of $1.18 billion.

GOV. PETE WILSON

Met with Assembly Speaker Willie Brown to discuss a plan to take as much as $1.7 billion from local governments to help bridge the state’s budget gap. Wilson and Brown declined to disclose details of their negotiations but announced that they intend to meet every day this week. “I think we’re making progress,” Wilson told reporters. If the impasse extends beyond Friday, it would be the longest the state has ever gone into the fiscal year without a budget.

THE LEGISLATURE

The Assembly and Senate met briefly but took no action on the budget. Private negotiations are continuing.

KEY DEVELOPMENTS

Controller Gray Davis confirmed that he will pay public schools and universities at the end of July with checks backed by cash in the state treasury, rather than IOUs. The Constitution and state law give the schools first call on the state’s money, even if no budget has been adopted.