California faces fewer cash problems this year, officials say
California will need fewer accounting maneuvers to survive the fiscal year, officials announced on Friday.
For the last five years, the state has routinely delayed payments to schools, colleges and social service programs in order to paper over shortfalls when cash is tight. But a $950-million deferral scheduled for March will no longer be needed because the state is on firmer financial footing, officials said.
California officials said the announcement is further proof that the state is inching its way out of a years-long financial crisis. Gov. Jerry Brown's finance director, Ana Matosantos, credited the decision to “a sound budget, diligent debt management, and the passage of Proposition 30."
The state has already deferred $2.9 billion in payments since the fiscal year started in July. Some has already been paid, and $1.8 billion was scheduled to be delivered in January. Instead, officials said, it will be paid one month earlier, in December.
California still has plenty of financial problems to tackle in the coming years, including $34.1 billion in debt owed to schools, local governments and other programs.
“Schools and vital programs serving the needy had to shoulder much of the burden during California’s frequent cash shortages," Controller John Chiang said in a statement.
Brown administration officials say they have a plan to pay down most of that debt by 2016.
-- Chris Megerian in Sacramento
Photo: Gov. Jerry Brown's finance director, Ana Matosantos, discusses the state budget during a Capitol news conference in January. Credit: Rich Pedroncelli / Associated Press