Thread: California controller: State will run out of cash before Apr

California controller: State will run out of cash before April

By Denis C. Theriault

dtheriault@mercurynews.com
Posted: 01/22/2010 05:13:27 PM PST
Updated: 01/22/2010 09:12:00 PM PST

SACRAMENTO — State Controller John Chiang issued a stern warning Friday about California's cash reserves, telling legislative leaders and Gov. Arnold Schwarzenegger they must act on nearly $9 billion in budget cuts the governor is seeking by March — or the state will run out of cash to pay its bills.

Without making those cuts — which Chiang says will pump $1.3 billion into the state's checking account — California would be broke by April 1, no fooling.

The state wouldn't climb back to what's considered a safe level of cash on hand, $2.5 billion, until later that month, when tax revenues are expected to begin flowing into Sacramento.

"While our current cash condition is marginally better than it was one year ago," Chiang wrote to leaders, "it is still precarious."

Even with the budget cuts, the state's cash reserve would still be far below that cushion in March and April.

To that end, Chiang is calling for an additional $2 billion in cash-flow "solutions." Looking at previous cash crunches, that could mean some payments, like income tax refunds, would be delayed for a few weeks to keep the cushion intact.

"Call it overdraft insurance," said H.D. Palmer, spokesman for the state Finance Department. He stressed that officials are still huddling over specific solutions.

If the budget gridlock lingers all the way to July, then IOUs could come back into play.

And because many budget cuts

http://www.mercurynews.com/ci_14249833?source=rss

All Outta Money to Re-Distribute...You got what you ordered and now the check is due. Not-so-cheap labor now is it.

$9 billion

Things that make you go hmmmmm.....$9B was what illegals cost CA......FIVE YEARS AGO! Last I heard we are now up to $13B!

Please, just declare bankruptcy and get it over with. My neighbor says give California to the Chinese as payment for the $2 trillion we owe them and let them straighten this mess out.

All they have to do is not send out any tax refunds until April 15th when everyone has to have their taxes paid.

Just let the tax payments cover the tax refunds. They have done it before.

The state wouldn't climb back to what's considered a safe level of cash on hand, $2.5 billion, until later that month, when tax revenues are expected to begin flowing into Sacramento.

What do you know about California's Finances?

What are the largest, 2nd and 3rd source of CA.'s revenue.

What is most of CA.'s money spent on? 2nd? and 3rd?

Answer before you read the article.

http://www.alipac.us/ftopicp-1012026.html#1012026