Controller John Chiang sounds the alarm bells

by Brian Leubitz

While tax season is gearing up, the state government is now running low on cash reserves. Controller John Chiang announced today that without payment delays and other tactics, the state will run out of cash in March:

California will run out of cash by early March if the state does not take swift action to find $3.3 billion through payment delays and borrowing, according to a letter state Controller John Chiang sent to state lawmakers today.

The announcement is surprising since lawmakers previously believed the state had enough cash to last through the fiscal year that ends in June.

But Chiang said additional cash management solutions are needed because state tax revenues are $2.6 billion less than what Gov. Jerry Brown and state lawmakers assumed in their optimistic budget last year. Meanwhile, Chiang said, the state is spending $2.6 billion more than state leaders planned on. (SacBee)

To some extent this happens every year. Last year we had to borrow $10B to tide us over until tax revenues came in.  And heck, Chiang thinks this year will only be $5.4billion. The world is getting better, hooray.

Unfortunately, with the continuing high demands on state services, this is really to be expected. And, Chiang, as he has always done, will have to find a way to balance the state’s checkbook.  Fun job, isn’t it?