California Cash Crunch Coming

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(Sacramento, CA)
Thursday, May 7, 2009

The legislative analyst says California may have to borrow more than 20 billion dollars next fiscal year to keep paying its bills.  Though the state borrows money every year, the analyst says such a large amount is unprecedented – and would be hard to come by.  Democratic Assembly Speaker Karen Bass traveled to Washington to lobby the federal government for help.  She’s hoping the U.S. will guarantee the state’s short-term borrowing – since it’s unlikely commercial banks will do it.  She says she left with a good feeling:

“I really felt a sense of solidarity frankly, from the administration, from congress, from the republicans and from the democrats.”

Bass says she’s still hoping the ballot measures will pass May 19th.  If they don’t, the budget hole gets bigger.  Bass says that would likely mean deep cuts.  The legislative analyst cautions lawmakers that federal help often comes with strings attached….but urges them to do something to address the cash crunch as quickly as possible