LOS ANGELES -- California's lingering recession -- and the resulting impact on state finances -- is a continuing concern for municipal market participants as the state prepares to take bids tomorrow on $441 million of general obligation bonds.

California may face a budget gap of $3 billion in the current fiscal year, primarily because key economic indicators suggest the state's recovery may be delayed or weakened, Kevin Scott, executive director of the nonpartisan Commission on State Finance, told a caucus of Assembly members last week.

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