LAO says balance CA budget, don't borrow more and more

Speaker Bass meets Mr. Cousteau

State lawmakers are being pressured to balance the state's budget and try to work out a fiscal solution to California's money woes.

News from the office of the non-partisan California legislative analyst:

In part because state revenue collections have been weaker than expected since passage of the February budget package, major cash flow difficulties loom for California in the summer and fall of 2009. Without significant budget-balancing and cash management actions by the Legislature or unprecedented borrowing from the short-term credit markets, the state will not be able to pay many of its bills on time for much of 2009-10. Returning the budget to balance will be important to resolving the state's cash flow challenges.

We recommend that the Legislature act quickly to address these challenges—by late June or early July at the latest.  We also note that the state should be cautious about accepting additional federal assistance for the state's cash flow problems, especially given the strings that may be attached to such aid.

Here is video:

 

Assembly Speaker Karen Bass said state leaders are now under tremendous pressure to get the budget completed by the start of the new fiscal year July 1 because of cash flow problems.

"You will find us working toward a quick resolution," Bass said in a conference call from Washington. "I don't believe this next round is going to be long and drawn out. I don't think there's tons of options."

The state's inability to borrow has already prompted state officials to knock on White House doors for assistance. Bass was in Washington to sell Obama administration officials and congressional delegates on a plan to have the federal government back state borrowing.

According to Bass, California is among eight states facing cash flow problems.

Harry Osibin hosts earth witness news on radio and thee Internet.  Information at earth witness news.  My email.  My blog.