Monday’s the deadline for Gov. Arnold Schwarzenegger and the Legislature to close a $24.3 billion deficit so the state controller can get emergency loans to help California avoid running out of cash next month. But the budget deficit remains far from being solved, and without a solution the state will probably be forced to delay payments to local governments, vendors and others at the end of July.
The deadline itself became moot last week when Schwarzenegger refused to allow Controller John Chiang to take out emergency short-term loans. Instead, the governor gave the Legislature an ultimatum: Solve the budget, or shut down government operations.
From Monday on, Schwarzenegger said, every day that passes without closing the deficit is a step toward insolvency.
“Now, the controller has already said that the deadline is June 15th,” the governor said Friday in a public appearance in Escondido (San Diego County). “In fact, this week I sat down with the controller and also with the treasurer. We all agreed that after June 15th, 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 state’s priorities for getting things paid fall in this order: education and debt payment, special funds, pension obligations, payroll and Medi-Cal payments.
Tic toc on the solvency clock: Only 47 days left to MELTDOWN!