State Budget Watch

On the state’s 31st 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 Friday: 12,522, with a value of $47.1 million.

Since July 1: 770,648, with a total value of $1.6 billion.

GOV. PETE WILSON

The governor campaigned with President Bush in Southern California and did media interviews in Fresno. He is scheduled to meet with legislative leaders today.

THE LEGISLATURE

The Senate passed and returned to the Assembly a bill to expand the authority of the Franchise Tax Board to negotiate settlements in disputed cases. The measure, by bringing about settlements in cases otherwise headed for the courts, is expected to produce at least $300 million for state coffers in the current fiscal year. The Assembly also met but did not address any legislation related to the budget.

KEY DEVELOPMENTS

The state broke its record for the longest period California has gone into a new fiscal year without a budget. The longest previous deadlock was in 1990 and lasted until July 31.

Representatives of the California Teachers Assn. are meeting privately with Wilson Administration Education Secretary Maureen DiMarco in an attempt to forge a compromise on school funding. The talks have not included state Supt. of Public Instruction Bill Honig or Democratic lawmakers--the traditional defenders of the education budget. Neither side in the negotiations will disclose its position.

Controller Gray Davis issued checks to more than 5,000 minimum-wage workers who assist the homebound elderly under the In-Home Supportive Services Program. The payments had been in doubt since earlier this week when a federal judge lifted a 2-year-old order requiring the checks to go out. But Judge David F. Levi on Friday agreed to grant a two-week grace period. After Aug. 14, unless there is a budget in place, the state no longer will have authority to pay the in-home workers or doctors and hospitals that care for the poor.