Thursday, June 25, 2009

State to Run Out of Cash Next Week

By Robert Gammon
Thu, Jun 25, 2009 at 6:41 AM

As California Democratic leaders wasted time pushing a budget bill that was never going to pass, state Controller John Chiang warned that the state would run out of cash next week, according to the Chron and the Mercury News. Chiang said he plans to start issuing IOUs next week to local governments, private contractors, state vendors, and to taxpayers awaiting tax refunds. Meantime, a key part of the Dems' proposal to fix the state's $24 billion problem didn't get any Republican votes, as expected. However, the Mercury News reported that Democrats and Republicans may not be that far apart and had begun "a feverish round of negotiations to bridge a $2 billion to $3 billion gap between the two parties." Moderate Republican state Senator Abel Maldonado, who joined Democrats in February to reach a budget compromise, described the two sides as being "close."

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