Schwarzenegger rules out loan if budget talks fail

The Associated Press
2:30 p.m. June 10, 2009

SACRAMENTO — Gov. Arnold Schwarzenegger says California government will come to a "standstill" unless lawmakers act quickly to reach a budget compromise.

Speaking Wednesday to reporters outside the Capitol, the governor says he will not agree to short-term borrowing.

Schwarzenegger says he "will not under any circumstances" sign a borrowing request to keep money flowing to state services until lawmakers agree on how to close a $24.3 billion deficit.

State Controller John Chiang says there must be a budget deal by the start of the fiscal year in July so he can borrow money before the state runs out of cash. He expects the cash crunch to hit by July 29.

On Wednesday, Chiang released a report showing that personal income, corporate and sales taxes were below estimates in May.

http://www3.signonsandiego.com/stories/ ... dex=114272