Budget Watch

On the state’s 59th 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: 68,816, with a value of $69.3 million

Since July 1: 1.43 million, with a value of $2.98 billion.

Interest costs to date: $9.51 million.

GOV. PETE WILSON

Took no budget-related action.

THE LEGISLATURE

Senate leaders agreed on a budget compromise that would cut deeply into health and welfare programs and local governments but spare the public schools, at least for this year. The plan, which was to be put to a vote Friday night, included a provision that would give schools the same dollars per student this year that they got last year--but would cut into the expected growth in school funding at least through 1995.

OTHER ACTIVITIES

Lawyers for group homes caring for 1,500 poor and retarded Californians filed suit in U.S. District Court in San Francisco to force state officials to resume Medi-Cal payments suspended since Aug. 15 because of the budget impasse. Of the 475 such homes in the state, at least half will be out of cash by Monday, forcing discharge or transfer of residents, said Kathy Daigle, spokeswoman for the California Assn. of Health Facilities, whose lawyers helped file the lawsuit. The homes’ primary source of income is Medi-Cal, the state health insurance program for the poor. Federal Judge Vaughn Walker scheduled the first hearing in the case for Tuesday.

Controller Gray Davis announced that the state will have sufficient cash on hand between Sept. 9 and Sept. 23 to redeem all IOUs issued through Sept. 10. The total value of outstanding IOUs would be about $2.6 billion.