California could run out of cash in March, controller warns
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California is running out of cash, the state controller warned in a letter to lawmakers Tuesday.
Controller John Chiang said lawmakers need to scrape together $3.3 billion by March -- assuming the state’s financial situation doesn’t get any worse.
By Feb. 29, the state is expected to dip below its “safety cushion” of $2.5 billion. Then, in a little more than a week, it will burn through all its cash and drop $730 million into the red, Chiang said.
He urged the state to delay some payments, borrow more money and shift cash among various funds.
The looming problem is the result of another difficult budget year. Chiang said the state, as of Dec. 31, has spent $2.6 billion more than expected while collecting $2.6 billion less in revenue.
Still, Chiang said the situation is not as dire as it was in 2009.
“I believe the upcoming shortfall can be effectively managed without resorting to IOUs, tax refund delays and other drastic measures,” he said.
-- Chris Megerian in Sacramento