LOS ANGELES -- California's month-long budget stalemate was expected to continue through the weekend, although Gov. Pete Wilson met last Thursday with key lawmakers for the first time in weeks.

Gov. Wilson and Democratic and Republican leaders of the Assembly and Senate planned to meet Saturday for further discussions.

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 Friday, it marked the longest time in California's history -- 31 days -- that the state has gone without a spending plan.

Two topics continuing to dominate discussions are how much the state should reduce funding for local governments, and how much to cut from schools.

Gov. Wilson on Friday campaigned with President Bush in Southern California, while both houses of the Legislature met on minor components of the budget package.

The state cannot borrow money without a budget. Instead, it has been forced to issue $1.57 billion of IOUs, or registered warrants, to pay its bills.

State Treasurer Kathleen Brown said last week that California would make its Aug. 1 debt service payments from cash set aside for that purpose. The state will pay $141 million in principal and interest due on $2.5 billion of Public Works Board bonds and $11.4 billion of general obligation bonds outstanding. The state is constitutionally required to make such payments with available cash, rather than IOUs.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.