California.

California's economy continued to sputter in October, increasing the likelihood that state legislators will hold a special session to address a potential $3 billion budget shortfall in fiscal 1992, which began July 1.

Gov. Pete Wilson met last week with Democratic and Republican leaders from the Legislature and asked them to consider potential remedies for addressing the deficit.

Tax increased helped the state erase a $14.3 billion gap last summer, but political leaders appear to favor budget cuts over tax increases to close the current deficit.

California's general fund revenues in October fell $183 million below budget projections, according to figures released last week by the California Department of Finance. Actual revenues for the fiscal year total $10.8 billion, or 8528 million less than projected in the budget.

"It is clear the performance of the state's economy is weaker than the forecasts of virtually all public and private economists," a finance department bulletin said. "Simply put, the recession is deeper than originally thought, and the economy is not showing signs of improving."

The Legislature does not resume meeting until January, but Gov. Wilson suggested last week that legislators convence earlier in a special session to discuss the budget.

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