Calif. power bond delay may lead to large deficit 
NEW YORK, Sept 27 (Reuters) - California state Treasurer Philip Angelides said Thursday the state could face a $9.3 billion budget deficit in the 2002-2003 fiscal year if $12.5 billion of power bonds are not sold before July 2002. 
The treasurer is certain the bonds will be sold, but he released the figures in an attempt to pressure the California Public Utilities Commission (PUC) into actions it must take in order to sell the bonds. 
"What I am concerned about is the fact this law has not been effectuated eight months after it was passed," Angelides said in a telephone news conference in Sacramento, referring to a law passed in February setting the biggest municipal bond sale ever in motion. 
The state depleted its general fund by at least $6.2 billion buying electricity to keep power flowing and must sell the bonds in order to refill the state's general fund and make future power purchases. 
"There can be no schedule (for the bond sale) until the PUC completes its work," Angelides said. 
Earlier this week the PUC said the much-delayed meeting is now set for Oct. 2. 
Angelides said PUC Commissioner Jeff Brown, one of five, is on board to make the vote, but President Loretta Lynch and other commissioners, "are not ready to act." 
Lynch said earlier this week that she wants more time to work out details with Angelides and the Department of Water Resources concerning the money and terms of the rate order and rate agreement. 
How the money from rate increases approved in May will be split up to pay for the bonds and to reimburse troubled power utilities and giving the Department of Water Resources the authority to sell the bonds, still need to be decided by the PUC. 
Angelides is projecting a $3.1 billion budget deficit for the 2002-2003 fiscal year, even if the bonds are sold in time, due to reduced revenues as the overall U.S. economy slows. 
In a worst case scenario, Angelides added that with the bond sale, the $3.1 billion gap may grow to $4 billion, while a late sale would push the $9.3 billion number to $10.2 billion. 
The treasurer painted a dire picture of California 's budget if the bonds are not sold, likening it to the state's budget problems of the early 1990s. 
Angelides warned a 2 percent sales tax increase might have to be put in place, or possibly a $1,574 per student cut in state K-12 education spending. 
Or, the state could drop all spending on the University of California and California State University and save $6 billion. 
Eighteen percent of the state's non-education budget would need to be cut if the bonds are not sold, he said.