Business Journal: Budget Stalemate Impacting Companies
A standoff at the State Capitol has a real-world effect on businesses statewide.
Tuesday, August 19, 2008
The budget standoff is costing hundreds of millions of dollars to California companies – and hurting the already struggling economy. Lawmakers are battling over how to deal with the $15 billion budget deficit, further delaying a political process that is already almost two months late. Many companies, from large corporations to small businesses, are not getting paid since the state controller is prevented from cutting checks to most contractors for goods and services provided after July 1 when no budget is in place. The state pays about $9 billion a year to contractors. If those payments stay on hold through August, it would delay about $500 million in payments, according to the Department of General Services. Now, the businesses will get paid, eventually, but not until after a budget is signed by the governor.