State Budget Watch

On the state’s 44th 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 Thursday: 106,896 with a value of $404 million.

Since July 1: 1.17 million, with a total value of $2.65 billion.

Interest costs to date: $5 million.

GOV. PETE WILSON

Met with legislative leaders in his office. Wilson today is expected to offer a repackaged budget proposal that would cut $2 billion in public school spending from the $25 billion the governor proposed in January but would loan the schools enough to keep even with enrollment in the coming year. The proposal also is likely to include cuts of $2.2 billion in health and welfare programs, about $1 billion in local government, $419 million in higher education, $132 million in prisons and $200 million in general government.

THE LEGISLATURE

The Assembly met to debate legislation on local government finance. The Senate did not meet.

OTHER ACTIVITY

A federal appeals court denied an eleventh-hour appeal by California hospitals to keep state Medi-Cal funds flowing from Sacramento. The ruling means that the state no longer has the authority to pay doctors and hospitals that treat the poor, even with IOUs.

Assembly Speaker Willie Brown (D-San Francisco) said the bottled-water company that supplies the members’ district offices is balking at delivering any more water without payment, and legislators risk losing their cellular phone service. He also said some Assembly members, who have not received paychecks since July 1, are having trouble paying their mortgages. “The situation is getting to be really desperate,” Brown said.