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 Saturday: None.

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

GOV. PETE WILSON: Met with top legislative leaders for 3 1/2 hours. Wilson told reporters afterward that he and the lawmakers were making progress and will meet again at 2 p.m. today in his office.

THE LEGISLATURE: The Senate and Assembly did not meet. The Assembly is scheduled to meet at 6 tonight.

KEY ISSUES: Wilson and Democratic Assembly Speaker Willie Brown agree that current law is sufficient to allow most counties to increase sales taxes to replace any property tax revenue the state might shift from local governments to the schools to help bridge the budget gap. But Brown believes that the courts have ruled that counties need not place the issue before voters. Wilson believes that the law requires a majority vote of the people. The issue remains unresolved.