Wednesday, October 1, 2008
The State Treasurer is warning California may run out of cash if Congress fails to adopt an economic recovery plan.
Bill Lockyer says for the last ten days state and local governments have been closed out of financial markets and help from the federal government is necessary.
Lockyer says the crisis has already hit California's ability to do regular short term borrowing that's done in the fall to pay bills.
Lockyer: This has the potential for a huge train wreck for all the programs we care about. If we can't transfer money to public schools if we can't pay our medical bills and pay state employees and so on that will happen all over the country. It's not a good thing for the economy.
State Controller John Chiang issued a statement saying it is critical that Congress adopt a recovery plan-to help loosen the credit markets.
He says the state will have to borrow seven billion dollars to meet its obligations through the end of the fiscal year.