Controller: State will run out of cash in April
Controller John Chiang said today that without “prompt action” by state leaders, come spring California will again not have enough money to pay its bills.
Chiang, in a letter to Gov. Arnold Schwarzenegger and top lawmakers, warned that even if the Legislature adopted all the budget fixes the governor called for this month, the state will still be $2 billion short of paying all its bills in coming months.
Last year, the state deferred paying some taxpayers’ refunds and issued IOUs over the summer. “Only you can prevent history from repeating this year,” Chiang wrote. Cash supplies will bottom out on April 1, he said, with the state in the red by $197 million.
There will not be “safe levels” of money to pay bills again until April 21. An even deeper cash crunch will reemerge in July, should lawmakers and the governor reach a stalemate on a spending plan. “While reasonable minds may disagree about the solutions,” Chiang said, “there is no room for debate about the folly of doing nothing."
-- Shane Goldmacher in Sacramento