$3.2-billion state bond sale is set

California plans to sell $3.2 billion of bonds next week to help plug the state’s deficit, using the remainder of voter-approved borrowing authority from its last fiscal crisis in 2004.

Individual investors will be able to place orders for the tax-exempt bonds Tuesday and Wednesday, with final pricing set by bidding Thursday by institutions such as mutual funds and insurance companies.

California is borrowing to avoid running out of money by the end of March as it grapples with a projected $14-billion budget gap. The housing downturn has sapped growth in the state’s economy, depressing tax revenue.

Gov. Arnold Schwarzenegger declared a fiscal emergency Jan. 10. That gives him the power to order lawmakers into a special session to make midyear spending reductions. He has called for across-the-board cuts of 10% to all departments.