Tuesday, December 23, 2008
The State Controller is warning California could run out of cash in less than seventy days if the legislature doesn't act quickly to resolve the state's budget crisis.
Controller John Chiang has sent a letter to the Governor and legislative leaders... urging them to reach an agreement. He says the state's ability to meet financial obligations-including paying off debt-- is at risk because of California's dire cash problems.
Chiang: I just want to make sure the state is in a position where we don't have to default. I don't think people understand people understand how devastating that is to the financing for the state of California for years to come.
Chiang says that could further damage the state's credit rating. Chiang says he is directing staff to step up efforts toward a costly form of borrowing-which may not even be possible in the nation's troubled credit markets. He says he may also be forced to issue IOU's to other individuals entitled to state payments in order to first meet Constitutional requirements to pay schools and debt.