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Still No New Budget, Davis Signs Orders

California lawmakers adjourned Monday having failed to meet a midnight deadline for passing a new budget. The state faces a record $38.2 billion budget shortfall and is operating for the first time completely on borrowed money.

State Controller Steve Westly says the state only has enough cash to get through mid-August.

With no new budget, the state can´t make millions of dollars in on-time payments to schools, community colleges, courts, state suppliers and others. The salaries of the governor, legislators, state appointees and about 1,000 non-civil service employees will stop Tuesday.

But most of the state´s 200,000 workers will continue receiving their full pay, at least for now.

Tuesday, Governor Davis signed two excutive orders designed to save money — the first, a hiring freeze statewide. The second order, said to save $250 million, will eliminate all vacant positions currently in the state.