Tuesday, January 31, 2012

California To Run Out Of Cash In One Month, Controller Warns

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, reports the Sacramento Bee.

Lawmakers previously believed the state had enough cash to last through the fiscal year that ends in June.

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.

Bottom line: Who needs a Greek financial crisis to worry about, when you have California? They'll patch California together.

We are probably still at least a year or more away from a major state or city fiscal crisis, but they are coming. (Illinois will probably be first.)

This is not the time to own municipal bonds.


  1. I listened to someone recommend a CA muni bond this morning...now you've killed that idea twice.

  2. Not to worry, the President will dispatch his bankers to fix the problem. Maybe they need to tax the rich even more. LMAO

  3. Hey, Anybody know a good muni short fund???

  4. But NBC news, in an interview with Jerry Brown said that reports of California's demise was greatly exaggerated, do you think he mightn't be,um, telling the truth?
    and here in Illinois, the city of chicago is attempting to squeeze every last cent from libraries, schools and speed cameras.