State Budget Watch

On the state’s 38th 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 Friday: 20,252 with a value of $40.5 million.

Since July 1: 1,017,137 with a total value of $2.2 billion.

GOV. PETE WILSON

The governor met for about three hours with legislative leaders and said they were making progress toward a budget agreement. He said he probably would veto a compromise budget plan passed Friday by the Legislature’s conference committee if it clears the floors of both houses and comes to his desk.

THE LEGISLATURE

The Senate and Assembly did not meet Friday. Private negotiations are ongoing.

KEY DEVELOPMENTS

The conference committee, on a 5-1 bipartisan vote, passed an alternative budget plan that cuts deeper into local governments and the state bureaucracy than Wilson has been willing to accept but does not reduce education spending as much as Wilson has proposed. The bill is scheduled to be put to a vote on the Assembly and Senate floors Sunday night.