Without a budget, California could issue IOUs
swiegand@sacbee.com
Published Sunday, Jun. 14, 2009
June 15 is usually recognized around the Capitol as the day on which the Legislature thumbs its collective nose at a constitutional deadline that a state budget be passed.
That’s how it’s been celebrated on 29 of the past 33 June 15ths.
This year, however, there’s a twist: Lawmakers have already approved a budget for the fiscal year that starts July 1 – in fact, they did it in February.
But they’ve been unable to mend a $24 billion rip that has appeared in it since then – and that could cause as much trouble as if they were still squabbling over the budget itself.
That’s because without a budget patch in place by the end of this month, state finance officials say there’s a chance state government might have to do what it hasn’t done in 17 years: issue IOUs instead of paying its bills.
“This week I sat down with the controller and also with the treasurer,” Gov. Arnold Schwarzenegger told a Southern California audience on Friday, “and we all agreed that after June 15, every day of inaction jeopardizes our state’s solvency, and our ability to pay schools and teachers, and to keep hospitals and ERs open.”
The actual fiscal jeopardy is neither that dire nor that simple, but it’s still serious.
