The controller says California is down to Plan D on its checklist of paying bills. Its cash reserves are piddling; the special funds it borrows from are tapped out, and no one in the private sector is going to lend it any cash at a reasonable interest rate.
That leaves what in state government circles are called “payment deferrals” and what in real life is called “stiffing your creditors.”
In this case the creditors include income taxpayers expecting refunds, college students waiting on state aid, counties that operate public assistance programs, and companies that sell goods and services to state agencies.
Chiang has said he won’t write $3.7 billion worth of checks for those and other state programs if legislators and the governor haven’t reached a deal by next Sunday to close the budget gap.
The controller said he must conserve what little cash the state has to be able to make constitutionally required payments to schools and interest payments to state bondholders.
What can I say, maybe I should move to a different state.