State Budget Watch

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. The state is short of cash and, without a budget for the fiscal year that began July 1, cannot borrow money to pay its bills. Instead, claims are being paid with IOUs known as registered warrants.

IOUs

Issued Wednesday: 17,065, with a value of $17.6 million.

Since July 1: 892,801, with a total value of $1.97 billion.

GOV. PETE WILSON: Met for about two hours with the top four legislative leaders in his office. Wilson said afterward that the leaders had agreed on most of the budget for prisons and the California Youth Authority. He criticized a proposal circulated by Republican Sen. Frank Hill of Whittier as “unbalanced.”

THE LEGISLATURE: Neither the Senate nor the Assembly met. Private negotiations are ongoing.

KEY ISSUE: Prisons: Wilson withdrew his support for a proposal to save $70 million by allowing nonviolent felons to go without parole supervision at the conclusion of their prison sentences. The governor said the leadership group decided instead to have each parole officer supervise more ex-convicts.