LOS ANGELES -- California lawmakers expect the state's budget stalemate to spill into next week as legislative leaders await Gov. Pete Wilson's plan to close an $11 billion gap.
The continued delay comes after the governor this week helped block passage of a compromise $58 billion spending plan proposed by state Sen. Frank Hill, R-Whittier.
"We're putting together a new plan from the governor. It's not finalized yet," Cynthia Katz, spokeswoman for the state Department of Finance, said yesterday. Ms. Katz said the plan could be released early next week. "The governor is trying to embrace any idea he can, while avoiding a tax increase or a rollover of the deficit," she said.
The expected proposal would be the first concrete plan offered by the governor since state leaders failed to reach a budget accord on July 1, the start of the current fiscal year. When they did not pass a budget Thursday, it marked the longest stretch in California's history -- 44 days -- that the state entered a new fiscal year without a spending plan.
Lawmakers have reached a tentative agreement on funding items such as correctional facilities and higher education, but they are deadlocked in areas such as the level of funding reductions for cities, counties, and special districts.
Gov. Wilson's new budget plan may cut school funding by about $1.49 billion, or $810 million less than he originally proposed in January, according to published reports.
Under the proposal, local government funding would reportedly be reduced $1.3 billion, including $400 million in cuts for counties, $300 million for cities, $200 million for redevelopment agencies, and $300 million for special districts. The state also may reduce vehicle license payments to local governments by $100 million.
A heavier burden of reductions for cities is a shift away from earlier proposals from the governor, a former city mayor.
"If we get anything new from the governor, the speaker is going to put it on the floor for a vote immediately," said Jim Lewis, press secretary for Assembly Speaker Willie Brown, D-San Francisco.
Mr. Lewis said legislators would meet today to discuss and amend several key budget trailer bills. He said the hope is that any accord reached on such legislation may make it easier to reach a consensus on a budget. But many lawmakers may not work this weekend because some of them have not had a two-day weekend since the budget crisis began.
"I don't think we will be meeting this weekend. Everybody' rear end is dragging," Mr. Lewis said.
The state cannot borrow money without a budget. Instead, it has issued $2.25 billion of IOUs, or registered warrants, to pay its bills. It started redeeming some of those warrants last week.
In other budget news this week, the Department of Finance said in its August finance bulletin that a meaningful recovery in California's economy is probably unlikely until at least 1993.
"The second-half recovery expected when the Department of Finance released the May [budget] revision now appears to be unlikely," the bulletin says. "Two elements that had been counted on to bring the state out of recession -- a housing upturn and a solid, sustained national recovery -- now appear very much in question."
The finance department added that actual general fund revenues of $1.98 billion in July were in line with projections made in the revised May budget forecast.
