January 31, 2012

Controller: State to run out of cash in March without action

California will run out of cash by early March if the state does not take swift action to find $3.3 billion through payment delays and borrowing, according to a letter state Controller John Chiang sent to state lawmakers today.

The announcement is surprising since lawmakers previously believed the state had enough cash to last through the fiscal year that ends in June.

Read more here: http://blogs.sacbee.com/capitolalertlate....

Again?

There go more teaching jobs.

obammy will figure out a way save his major voting block state - watch

Illinois is next....

"California to run out of cash xxxxxxx..."
"Illinois is next..."

Don't we already have 75 threads that contain exactly these phrases in them somewhere?

Since California is the world's 8th largest... this does not bode well for the U.S. or the world. I guess the games and financial schemes wore off from last time.

The new solution the state is going to come up with (same as the old)...

Raise sales tax and other taxes.
Don't cut spending for any of the bloat or bureaucratic state positions.
If spending needs to be cut, make sure its the parks and beaches first (This state needs no extra tourism dollars)... because they want to make it visible to the public and warrant more taxes.

This is why I always make sure to owe a little bit of CA income taxes when I file, rather than get a refund. A couple years ago they were sending people IOUs for their tax refunds.

IN DECEMBER, California has dicovered a $5.2 billion shortfall in the 2011-12 budget. This is due equally to higher-than-projected spending and lower-than-expected tax income. This was pointed out by the controller in Dec 2011 in a letter to the legislature.

Today, the controller says California will run out of cash March 8 unless steps are taken.
source: http://www.sco.ca.gov/

The steps seem to be SB 95.

This bill raids a "pooled money" account and lets it be "loaned" to the general fund during the fiscal emergency.

This is a desperation move.

Source: http://www.aroundthecapitol.com/Bills/SB....

Quote:

SB 95 (Committee on Budget and Fiscal Review)
State cash resources.

(1)Existing law establishes the Condemnation Deposits Fund in the State Treasury, consisting of all money deposited in the State Treasury pursuant to the Eminent Domain Law, including interest derived from its investment. Existing law requires the Treasurer to receive all money intended for the fund and to duly receipt for, and safe keep all money in the fund.

This bill would instead require the Treasurer to receive and duly account for all money in the fund, and would authorize the Controller to use any money in the fund for cash flow loans to the General Fund, as specified.

(2)Existing law requires the Controller to notify the Governor and the Pooled Money Investment Board when the General Fund in the Treasury is, or will be, exhausted, and authorizes the Governor to transfer all or part of the moneys not needed in other funds or accounts to the General Fund, as determined by the Pooled Money Investment Board. Existing law provides that all moneys in the State Treasury may be loaned for these purposes except, among others, money that the Controller is prohibited from transferring pursuant to the Constitution, bond indenture, or statutory or case law.

This bill would instead authorize all moneys in the State treasury to be loaned for these purposes except, among others, money that the Controller is prohibited from transferring pursuant to the Constitution, bond indenture, or case law. The bill would also make a technical, nonsubstantive change to these provisions.
(3)Existing law creates the Highway Users Tax Account, in which are deposited motor vehicle fuel tax and diesel fuel tax revenues available for allocation to transportation purposes. Existing law creates the Transportation Investment Fund, in which are deposited a portion of gasoline sales tax revenues to the extent a gasoline sales tax is imposed.

This bill would authorize the Controller to use the funds in the Highway Users Tax Account and the Transportation Investment Fund for cash flow loans to the General Fund, as specified. The bill would also authorize similar cash flow loans to the General Fund from the Motor Vehicle Fuel Account, the Transportation Revolving Account, and the State Highway Account.

They could probably balance their budget by giving prison psychologists 25% pay cuts.

On top of all this Jerry Brown has proposed using a speculative $1 Billion purportedly to come from California's new Cap n Trade revenues to finance a portion of the $100 Billion dollar High Speed Rail to "no where" project.

$1 billion yearly at today’s bond interest rates would only finance about $20 billion of the estimated $100 billion needed for the High-Speed Rail project. Rider fees on the new train would not come anywhere near paying for the system.

Quote:

higher-than-projected spending and lower-than-expected tax income

Hey, where's that unicorn?

GD it! Didn't they say that last year? They're putting out the SOS for another stick save. Meanwhile, spend til bankrupt.

These shortfalls are small and will continue to be papered over through intergovernmental borrowing and sale of future revenues (bottles and cans). Illinois 8.5 billion in overdue invoives and they don't care. Until tax revenues REALLY start to tank, nothing will be done.

I think as long as they allow the EU to have control over their budget and first crack at the tax revenues, they will be able to come to some sort of borrowing agreement.


Oooops, wrong thread. Never mind.

They should just appoint Krugman to the position of State Treasurer. He has all the answers and we need to see him prove it.

This has gone on wayyyyy longer than I thought it would already. I'm really numb to these types of headlines at this point.

Every year its the same thing.

California is almost out of money!
California finance talks stalled!
California Borrows money for next year!

Next Year:


California out of money again!!(Who could have known?)


You'd think they'd figure it out by now.

They should just raise taxes and cut nothing.
It is always a successful strategy.

They could shake that much out of the banker tree. Oh Jamie come on down! To the court house. And bring your little tanned friend with ya.

what did they to do come of "ran of cash crisis" last time ? rinse, repeat and spare us.

F*CKing Idiot Kalis.

Thank You.

From Dow Jones Newswires (no link yet):

California is looking to borrow up to $1B via a private placement, according to Tom Dresslar, a spokesman for Treasurer Bill Lockyer.

A FOAF moved their child from public to private school in CA because they were no longer offering the high school classes that were necessary for a college bound student...bare bones classes

Link to Dow Jones Newswires article cited earlier:

http://www.nasdaq.com/article/update-cal....

Maybe the pol can sell her airplane ?