State Treasurer Bill Lockyer says the economic crisis has already affected California’s ability to do short term borrowing—that’s done routinely at this time of year to help pay bills.
“The markets right now are just frozen and there’s just not credit available to new borrowers even the State of California…”
Locker says for the last week and a half state and local governments have been closed out of the markets—largely because financial institutions are afraid to commit capital in uncertain times. Without the usual ability to borrow— he says the state could be out of cash by the end of the month. Controller John Chiang issued a statement saying it is critical that Congress adopt a recovery plan. He says the state will have to borrow seven billion dollars to meet its obligations through the end of the fiscal year.