State’s Cash Problem Won’t Disappear Even if Budget Passes
Friday, February 13, 2009
The state legislature is widely expected to vote on a spending plan to fix California's deficit this weekend. But a budget solution won't spell immediate relief for the students, taxpayers... and counties not getting checks from the state. Marianne Russ reports.
State Controller John Chiang says until he sees a signed budget, he'll have to continue delaying state payments; more than three billion dollars worth this month. They range from tax refunds to programs that help the poor. And Chiang says even though the spending plan may include some quick, short-term solutions - the state's cash problems won't disappear overnight:
Chiang: "You know, the question is, what is the timing of those increases in income taxes - when will they come into the state treasury. Sales taxes take a time to come into the state treasury, so those monies will not be immediately available."
When a budget fix is enacted, the State Department of Finance will do a cash analysis to help guide Chiang. HD Palmer with the Department says that may take about a week. Chiang says he had to put off the payments this month to conserve cash to pay schools and bond-holders.