Kalifornia puts off 2.9 billion dollars in school and county payments!
SACRAMENTO, Kalifornia - Bloomberg August 23, 2010 - Kalifornia will delay paying $2.9 billion of subsidies to schools and counties in September, a month earlier than projected, to save cash amid an impasse that has left the state without a budget for 54 days.
The state's top financial officials - the controller, treasurer and finance director - told lawmakers today that the deferred payments need to start next month instead of October to make sure there's enough money to pay bondholders. The delay is in addition to $3.2 billion the state pushed back in July.
Kalifornia began its fiscal year on July 1 without a spending plan after Republican Governor Arnold Schwarzenegger and Democrats who lead the Legislature remained deadlocked over how to fill a $19 billion deficit. Controller John Chiang has warned he may again need to issue IOUs within two weeks to pay bills if the impasse continues into next month.
"Without an enacted budget in the near term that provides an adequate solution on both a budgetary and cash-flow basis, remaining general-fund resources must be conserved to the greatest-possible extent to meet priority payments, particularly all debt-service obligations," the three officials said in a letter sent to lawmakers.