State Budget Watch

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 Wednesday: 17,646 with a value of $44.1 million.

Since July 1: 1.06 million, with a total value of $2.25 billion.

GOV. PETE WILSON: Met with legislative leaders to discuss health and welfare issues. Wilson reportedly is preparing to seek passage of his welfare reduction proposal in a special session of the Legislature, to run concurrently with the regular session now in progress. The rules of a special session allow bills approved with a simple majority to go into effect immediately, rather than Jan. 1

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

OTHER ACTIVITY: State Treasurer Kathleen Brown proposed that Gov. Wilson, a Republican, cede his authority over the state’s short-term borrowing to a three-member panel dominated by Brown and Controller Gray Davis, both Democrats. Brown said her proposal would help avoid the use of IOUs next spring if the state again runs short of cash.