As deficit grows, Calif. prepares to issue IOUs

Financial Crisis Posted on

California's controller will start paying many of the state's bills with IOUs as soon as Thursday after lawmakers failed to close the state's worsening budget deficit, adding a new measure of indignity to a state sinking deeper into dysfunction.

Lawmakers' failure to act on Tuesday, the end of the fiscal year, also widened California's deficit from what already had been a whopping $24.3 billion — more than a quarter of its general fund.

The failure to balance the state's main checkbook and the looming IOUs prompted Gov. Arnold Schwarzenegger on Wednesday to declare a fiscal state of emergency.

Under the declaration, state offices will be closed three days a month to conserve cash. If the Legislature fails to solve the deficit within 45 days, it cannot adjourn or act on other bills until the crisis is resolved.

The partial government shutdown also will lead to a third furlough day for 235,000 state employees, bringing their total pay cut this year to about 14 percent.

Legal News Media

Legal News is the top headline legal news provider for lawyers and legalprofessionals. Read law articles and breaking news from law firm's across the United States to get the latest updates. We reserve the right, at our discretion, to change, modify, add, or remove portions of the site at any time. Your This site is solely for your personal use. You are, of course, welcome to print or otherwise copy material from this site for your personal use. However, you may not distribute, exchange, modify, sell or transmit anything you copy from this Site, including but not limited to any text, images, audio and video, for any business, commercial or public purpose. Any unauthorized use of the text, images, audio and video may violate copyright laws, trademark laws, the laws of privacy and publicity and civil and criminal statutes.

 

American Bar Association – Start and Run a Law Firm

NewYorkStateBar.com – Starting a Law Firm

Lawyer Website Designs