State Budget Watch

On the state’s 41st 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. Without a budget for the fiscal year that began July 1, the state is short of cash and cannot borrow money to pay its bills. Instead, claims are being paid with IOUs known as registered warrants.

IOUs

Issued Monday: 16,265, with a value of $13.4 million.

Since July 1: 1.03 million, with a total value of $2.2 billion.

GOV. PETE WILSON

Met in his office with three of the top four legislative leaders. Also met with members of the Senate Republican caucus.

THE LEGISLATURE

The Assembly debated legislation to shift property tax money from cities, counties and special districts to the schools. The Senate did not meet.

OTHER ACTIVITY

The State Board of Equalization agreed to allow businesses to pay sales taxes with state-issued IOUs. “If the government can pay its (bills) with IOUs, people and businesses should have the same right,” said Controller Gray Davis, a member of the board. The board’s action means that any businesses that accept IOUs from their customers, or which are paid in IOUs for services rendered the state, can then use them to satisfy their state tax obligations.