Controller: State IOUs on hold until at least October
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California is expected to have sufficient cash in its dwindling treasury to avoid issuing IOUs this month, the state’s controller said in his monthly cash report on Thursday.
State Controller John Chiang had previously warned that without a state budget in place he would be forced to issue scrip instead of paying the state’s bills in late August or early September. But rising tax collections and an unexpected drop in state spending have provided a slight cash cushion.
Garin Casaleggio, a Chiang spokesman, said the controller’s office had been planning this week to set interest rates for, and begin issuing, IOUs on Sept. 23.
“August revenues and a dip in spending have given us a small reprieve,” Casaleggio said.
California is already falling behind on some of its bills due to the lack of a budget. An estimated $3.35 billion in bills went unpaid in July and August, according to the controller’s office. Another $3 billion will go unpaid this month. Businesses that contract with the state are getting stiffed, as are community colleges. Health clinics that serve the poor are no longer receiving state funds. And college grants for low-income students are on hold.
The state’s leaders, meanwhile, remain frozen in a political deadlock that already has dragged on 10 weeks into the new budget year. The 2010 budget is already the second latest in California history, and the ongoing gridlock in the Capitol threatens to topple the record for tardiness, set in 2008.
On Thursday, Gov. Arnold Schwarzenegger was set to depart the state for a six-day trade mission to Asia.
-- Shane Goldmacher in Sacramento