LATEST BUDGET CRISIS MAY BITE PUBLIC HARDER, CONTROLLER SAYS.

Byline: Doug Willis Associated Press

This year's state budget stalemate could have a greater impact on Californians because the state is now providing more funding for local trial courts, warns a state official.

Standing in front of machines that print and mail tens of thousands of state checks per hour, Controller Kathleen Connell said Wednesday that those machines will be unable to issue thousands of vital checks after June bills are processed.

When the check-writing machines shut down, she said, that will directly or indirectly inconvenience or disrupt the lives of most Californians.

The news conference at the controller's check-processing center has become almost an annual event as the state starts a new fiscal year each July 1 without a new budget in place to give the controller authority to spend funds in the new budget year.

This year, the impasse is over how to deal with a surplus, with Republican tax-cut proposals and Democratic plans for additional school funding as the major contenders.

The lines are already sharply drawn, and there were no public signals of any progress Wednesday as the committee that has the formal job of writing the final version of the budget bill met publicly for only 20 minutes.

Before recessing, the six-member budget conference committee approved about $700 million in various spending reductions to start making room for a possible $1 billion tax cut proposed by Democrats as an alternative to the Republicans' $3.6 billion cut in motorists' vehicle license fees.

Capitol observers are predicting a deadlock of another month or even longer.

Republican Gov. Pete Wilson called a news conference to complain that Democrats who control the Legislature haven't responded to his vehicle license fee proposal and aren't taking the impasse seriously.

``I have never seen a more leisurely pace,'' Wilson said. ``I have never seen such a lack of urgency on the part of the Democratic caucuses.''

Connell said the impact of a budget impasse on ordinary residents will be greater this year than in the past because of the big increase last year in state support of local trial courts.

Last year, $50 million in trial court payments to the counties, scheduled to be paid July 15, had to be delayed until after the budget was signed Aug. 18. This year, the trial court payments that will be held up total $406 million.

``In total, there will be $720 million that will not be paid to the cities and counties of California in July if we do not have a budget,'' Connell said. ``Unfortunately, as has become traditional, we have started another new year without authority to pay our bills.

She predicted that disruptions of local services could affect millions of Californians. She also said hundreds of millions of dollars of state payments to private businesses will be held up, including nursing homes and pharmacies, child-care providers and vendors who deliver food to state prisons.

Connell said court orders from past years assure that all state workers except employees of the Legislature will be paid with or without a budget. She released a list of other state payments that by court orders must continue even if there is no spending authority.

Payments that will be made in the next week include $140 million in disability insurance benefits, $75 million for In-Home Support Services, $133 million for local schools, $100 million in personal income tax refunds, $136 million for University of California staff paychecks, $435 million in payments to public employee and teacher pension funds and $339 million in interest on state bonds.