CALIFORNIA BUDGET CRISIS ENDS

September 3, 1992

Gov. Pete Wilson signed a $57 billion budget early yesterday, ending a 63-day stalemate that forced California to issue IOUs for the first time since the Great Depression.

The governor, a Republican, signed the measure just 30 minutes after the Democratic-controlled Legislature approved a school-spending bill that he said was essential to balance the austere, no-new-taxes budget.

The state had gone without a budget since the start of the fiscal year July 1 because Wilson and the Legislature could not agree on how to close a $10.7 billion deficit.

During the crisis, Wilson pressed for deep cuts in welfare, education, and aid to local governments. The Democrats wanted more-modest welfare and education cuts.

The final package reduces support for cities, counties, and other local governments by $1.3 billion and cuts welfare grant levels 5.8 percent, or a total of $435 million.

The bill gives schools the same amount per pupil as last year but borrows $973 million against future years, thus reducing future spending.