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California set to issue IOUs as fiscal crisis weighs

Posted By admin On June 25, 2009 @ 3:15 am In Money Watch | Comments Disabled

Dan Whitcomb and Ciara Linnane
Reuters [1]
Thursday, June 25, 2009

California’s controller said on Wednesday that he would have to issue IOUs in a week if lawmakers can’t quickly solve a $24 billion budget deficit, and the state’s treasurer plans to tap a reserve fund to meet debt service costs.

The measures came as a budget crisis deepened in the most populous U.S. state and the gridlocked legislature failed to pass a proposed $11 billion in cuts.

“Next Wednesday we start a fiscal year with a massively unbalanced spending plan and a cash shortfall not seen since the Great Depression,” Controller John Chiang said in a statement announcing that he would be forced to use IOUs to pay the state’s bills beginning on July 2.

“The state’s $2.8 billion cash shortage in July grows to $6.5 billion in September and after that we see a double digit freefall,” Chiang said. “Unfortunately, the state’s inability to balance its checkbook will now mean short-changing taxpayers, local governments and small businesses.”

Full article here [1]

California set to issue IOUs as fiscal crisis weighs 290509banner [2]


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URLs in this post:

[1] Reuters: http://www.reuters.com/article/topNews/idUSTRE55O07Q20090625?sp=true

[2] Image: http://www.efoodsdirect.com/ammo-food.html?aid=14&adid=5

[3] IOU Part Two: California To Issue IOUs For Second Year In A Row: http://www.prisonplanet.com/iou-part-two-california-to-issue-ious-for-second-year-in-a-row.html

[4] California To Run Out Of Cash In One Month, Controller Warns: http://www.prisonplanet.com/aliforniamoney.html

[5] California Misses Budget Deadline, Readies “IOUs”: http://www.prisonplanet.com/california-misses-budget-deadline-readies-ious.html

[6] Cash-starved California orders unpaid leave for workers: http://www.prisonplanet.com/cash-starved-california-orders-unpaid-leave-for-workers.html

[7] Fiscal cliff deal could elude Congress: http://www.prisonplanet.com/fiscal-cliff-deal-could-elude-congress.html

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