State Controller John Chiang has ordered the state to delay nearly four billion dollars in payments. He says there’s just not enough cash to go around. Chiang compares the state’s predicament to a household short on cash one month:
“You have six dollars to pay ten dollars worth of bills. You would pay the bills you believed most essential. You would wait on paying the other bills until you had available cash to make those payments.”
Chiang says in the state’s case, education and debt payments are the highest priorities. California’s budget is 40 billion dollars out of whack, and lawmakers have yet to come up with a plan to fix that. Chiang says the credit markets are also very tight – which makes borrowing very difficult. Those affected by the delays could include students expecting Cal-Grant checks, vendors who do business with the state, and counties who run social service and health care programs on the California’s behalf. Tax refund checks are also on the list. Lawmakers and the Governor have been meeting nearly every day in an effort to work out an emergency budget
Also next week – state workers in many departments will have to take an unpaid day off. Governor Schwarzenegger ordered such furloughs twice a month to save money. Unions had sued over the move – but a Sacramento judge ruled in the Governor’s favor last week.