, Oct 8 (Reuters) – California lawmakers on Friday approved a state budget filled with spending cuts and creative accounting to fill a $19.1 billion deficit, 100 days after a spending plan should have been in place.

But critics fear the governor to be elected on Nov. 2 will immediately face a new shortfall as the budget’s rosy revenue assumptions prove unfounded. That’s a familiar story for California, which has seen its revenue plunge in recent years due to recession as well as turmoil in financial and housing markets.

Both chambers of the Democrat-led Legislature endorsed the budget, hammered out by top lawmakers and Republican Gov. Arnold Schwarzenegger last Friday to end a record stalemate over a spending plan for the most populous U.S. state.

State Senate President Pro Tem Darrell Steinberg said the process had been particularly tortuous, given the weak economic background.

“We’ve done more than OK,” he said.

Schwarzenegger must still sign the budget, which may avert the embarrassment of California resorting to IOUs later this month. Last year, contractors were given IOUs during a lengthy budget impasse while investors holding state bonds were paid on time, following state Constitution guidelines.

State Treasurer Bill Lockyer needs an enacted budget to move forward with plans for issuing billions of dollars in short-term debt to raise money for the state government’s cash-flow needs.

SAN FRANCISCO (Reuters) – Details of the California state budget agreement struck last week between Governor Arnold Schwarzenegger and top lawmakers may be made public on Tuesday, according to legislative aides.

Full details of the agreement will be disclosed on Wednesday during a legislative hearing in the state capital of Sacramento, the aides added, and a plan for a Thursday vote by the full legislature on the budget deal is still on track.

Schwarzenegger and top lawmakers hammered out a deal on a spending plan, which requires closing a $19.1 billion deficit, on Friday night — 93 days after the start of California’s current fiscal year, setting a record for a late budget deal.

Lawmakers briefed on the agreement say it proposes more than $7 billion in spending cuts, some $3 billion in internal borrowing from state funds, more than $1 billion from the sale of state buildings and more than $1 billion in revenue by delaying a corporate tax break.

The agreement is also said to include better-than-expected state revenue of more than $1 billion, the expectation of $5 billion in federal money and $10 billion in proceeds from the sale of bonds for the state government’s cash-flow purposes and for more than $8 billion in unpaid bills.

IOUs UP IN THE AIR

The leaders of the most populous U.S. state’s government notched their spending plan agreement amid increasing voter unease about the state’s finances in a volatile election year, underscored by abysmal job-performance survey results for Schwarzenegger and lawmakers, and by State Controller John Chiang’s warning that he may have to issue IOUs if a budget is not enacted soon.

SACRAMENTO, California (Reuters) – California will enter the fourth month of its fiscal year on Friday without a state budget in place after Governor Arnold Schwarzenegger and top lawmakers failed to agree on Thursday on a spending plan.

A spokesman for the governor told reporters in the state capital of Sacramento that Schwarzenegger and top lawmakers did not reach a budget agreement after meeting throughout Thursday but that they were inching toward a deal.

“Every day they meet they get closer,” spokesman Aaron McLear said Thursday night, adding that budget talks would resume Friday.

The state government of the most populous U.S. state is in the midst a record stalemate pitting Schwarzenegger and fellow Republicans in the legislature’s minority against Democrats who control the body over a spending plan to balance the state’s books. Thursday marked the 92nd day of the impasse.

California’s leaders must close a $19.1 billion shortfall caused by weak revenue, the result of a state economy battered in recent years by recession, double-digit unemployment and housing, mortgage industry and financial market turmoil.

The lengthy stalemate is taking place amid a contentious governor’s race between Democrat Jerry Brown, California’s attorney general and a former governor, and Republican Meg Whitman, the former chief executive of eBay Inc.

Schwarzenegger and Republican lawmakers are pressing for steep spending cuts as the main tool for tackling the shortfall. Democrats have proposed some cuts along with selective tax increases and delaying corporate tax breaks to raise revenue.

SACRAMENTO, California (Reuters) – California’s leaders will not meet on Wednesday to press on with talks to reach an agreement on a state budget, raising concerns that a deal on a spending plan may not be as near as indicated.

California is in its 91st day without a state budget in place, a record for the government of the most populous U.S. state, which is notorious for lengthy stalemates over spending plans and is in the middle of a divisive election year.

California also is the biggest issuer of bonds in the U.S. municipal debt market and investors who have been patient thus far with its budget stalemate are getting concerned.

They rank second in terms of California’s payment priorities should the state be forced to issue IOUs pending a budget agreement but prefer the state put its financial affairs in order and not take that dramatic step again. California last year during a budget standoff temporarily issued IOUs to preserve cash to pay investors holding its debt.

Aides to Governor Arnold Schwarzenegger and a top lawmaker involved in budget negotiations said talks would be suspended for a second consecutive day for staff to work through details of a “framework” for a spending plan agreed upon last week.

The aides added that talks to reach a deal on balancing the state’s books, which requires closing a $19.1 billion deficit, would resume on Thursday — a week after the announcement of the framework, which was supposed to have set the course for an agreement on Monday.

But on Monday evening State Senate President Pro Tem Darrell Steinberg said there was no deal, although he expressed confidence one was around the corner so the full legislature might be able to vote on it next week.

SACRAMENTO, California (Reuters) – California’s leaders will not meet on Tuesday as planned to hammer out details of a state budget agreement to close a $19.1 billion deficit, a spokesman for Governor Arnold Schwarzenegger said.

Instead their staff will work through Tuesday to refine a potential spending plan, according to Schwarzenegger spokesman Aaron McLear.

The government of the most populous U.S. state on Tuesday marked a record 90-day-long budget stalemate between Democrats — who control the state legislature — and Schwarzenegger and fellow Republicans in the body’s minority.

The two sides last Thursday said they had a framework for a budget compromise and expressed optimism an agreement would be reached on a spending plan by Monday.

But lawmakers on Monday evening said they had more details to iron out, including on the issue of pension reform pressed by Schwarzenegger, and that negotiations would resume Tuesday.

Talks are now likely to resume Wednesday, McLear said.

Lawmakers were supposed to have approved a budget in mid-June so it could be in place by the July 1 start of the state’s fiscal year.

SACRAMENTO, California (Reuters) – California’s leaders failed to reach a final budget agreement to close a $19.1 billion deficit on Monday, the 89th day of their stalemate over a spending plan, top lawmakers said.

California’s budget has suffered massive shortfalls in recent years as a result of plunging revenue caused by the mortgage crisis, housing downturn, financial market turmoil and double-digit unemployment in the most populous U.S. state.

“We’ve got a little bit more work to do,” Assembly Speaker John Perez told reporters after a closed-door meeting with Governor Arnold Schwarzenegger and other top lawmakers in the state capital of Sacramento.

State Senate President Pro Tem Darrell Steinberg said budget talks would resume at noon on Tuesday and that he hoped an agreement would be reached quickly so the full legislature could vote on a budget next week.

“We’re almost there,” Steinberg said.

Schwarzenegger, a Republican, and leaders of the Democrat-controlled legislature had agreed on a framework for a budget deal on Thursday, signaling a final agreement was near despite sharp partisan differences over how to balance the state’s books.

Democrats have pressed for raising revenue and spending cuts to fill the state’s budget shortfall. Schwarzenegger and Republicans in the legislature’s minority have held out for deep cuts and oppose tax increases to raise new revenue.

SAN FRANCISCO (Reuters) – California Governor Arnold Schwarzenegger and top lawmakers have a framework for an agreement on a state budget to close a $19.1 billion shortfall and they hope to reach a final deal on Monday, a spokesman for the governor said on Thursday.

“They at least conceptually have come to an agreement today, which is significant,” Schwarzenegger spokesman Aaron McLear told Reuters, adding that he had no details on the framework.

California’s government has been operating for 85 days without a spending plan in place for its current fiscal year, setting a record for a state notorious for late budgets and raising the prospect it would again issue IOUs.

Schwarzenegger and top lawmakers have been in talks this week in southern California, where the governor is recovering from a cold, to reach a budget deal. McLear said they would work over the weekend to hammer out details of an agreement with the goal of completing it on Monday.

Top lawmakers involved in the budget talks said they were optimistic a final deal is within reach.

Assembly Speaker John Perez in a statement said: “We will continue to work throughout the weekend to iron out the details.”

Assembly Republican Leader Martin Garrick said in a statement: “Members and staff will be working on language through the weekend so that the leaders can come back together Monday with a consensus and finalize.”

SAN FRANCISCO (Reuters) – Bell, California, whose former city manager and other top officials have been arrested on charges of misappropriating $5.5 million in public funds, had “virtually non-existent” financial controls, the state controller said on Wednesday, citing audit findings.

State Controller John Chiang’s audit is the first of three reviews by his office of the blue-collar town near Los Angeles that has made national headlines after the revelation former City Manager Robert Rizzo had a salary of nearly $800,000.

News of the salary has spurred a push by authorities to uncover how business was done in Bell’s city hall. It has made public-sector pay and pensions a top issue in California’s gubernatorial race.

“Our audit found the city had almost no accounting controls — no checks or balances — and the General Fund was run like a petty cash drawer,” Chiang said in a statement. “The city’s purse-strings were tied to only one individual, resulting in a perfect breeding ground for fraudulent, wasteful spending,” Chiang said.

Rizzo and seven other Bell officials were arrested on Tuesday following local and state probes into the city’s compensation practices.

The Los Angeles County Board of Supervisors on Tuesday asked Attorney General Jerry Brown to appoint a receiver to take over the day-to-day management of Bell.

Chiang’s audit found Bell spent more than $5.8 million on compensation for its top officials, its city council and mayor in the last year alone, and that Rizzo’s final compensation of $787,000 was 11 times higher than his starting salary.

SAN FRANCISCO, Sept 9 (Reuters) – A natural gas pipeline explosion ripped through a neighborhood in a San Francisco suburb on Thursday, starting fires that burned more than 50 buildings and killing at least one person, officials said.

As many as 25 people were injured by the blast and flames in San Bruno, a few miles (kilometers) from the San Francisco International Airport, and have been taken to local hospitals and hospitals with burn treatment centers. The local coroner’s office reported one fatality.

“We have confirmed that there are 53 structures, those are mostly homes, that were lost, about 120 damaged,” Kelly Huston, an assistant secretary with the California Emergency Management Agency, told KTLA TV.

The gas line belongs to the northern California utility Pacific Gas & Electric Co (PCG.N: Quote, Profile, Research, Stock Buzz), the company said in a statement.

“Though a cause has yet to be determined, we know that a PG&E gas transmission line was ruptured. If it is ultimately determined that we were responsible for the cause of the incident, we will take accountability,” the statement said.

Water-dropping aircraft assisted fire crew in fighting the blaze, which was spread quickly by high winds after the explosion around 6 p.m. (0100 GMT on Friday) local time.

“The fire is being contained at this point … it is around 50 percent contained,” San Bruno Fire Department Chief Dennis Haag told a news conference.

SAN FRANCISCO (Reuters) – To borrow from its gambling parlance, Nevada is likely to extend its economic and fiscal losing streak well into the future.

Once one of the fastest-growing states, Nevada now faces the prospect that recovery from its deep economic slump will lag — perhaps substantially — a national rebound.

Nevadans are resigned to that dour outlook. A recent Mason-Dixon Polling & Research Inc poll found 42 percent of residents expect the state’s economy to stay the same over the next year and 29 percent anticipate it to worsen.

They have good reason to be glum. Credit counseling agency CredAbility ranks Nevada as the most financially distressed state.

“It’s the only state at a crisis level,” said John McCosh, a spokesman for the Atlanta-based credit counseling agency.

Nevada, a state of 2.64 million, has come to symbolize the extremes of the U.S. economy’s boom and bust and now holds the country’s records in jobless and foreclosure rates.

The slumping state economy has also worked its way into national politics, as leading Democrat and Senate Majority Leader Harry Reid of Nevada fights for votes from a depressed electorate.