California's Impending Cash Flow Crisis

The California Progress Report reprints the letter State Controller John Chiang wrote to the governor and legislative leaders on Friday to explain the state's impending cash flow crisis -- and why he needs corrective action taken by June 15.

Our latest projections show that beginning on July 29, California will not have the cash needed to meet all of its payment obligations. On that date, the State will be in the red by $317.1 million; two days later, on July 31, our cash deficit increases to a negative $1.02 billion.

As the attached chart demonstrates, the State's cash problems will only grow in severity in the subsequent months without Legislative action. The State will reach its lowest cash balance in April 2010, when we will fall short of meeting our payment obligations by nearly $22 billion.

And California's radical conservatives get closer to the date for which they have long dreamed: when they can follow Grover Norquist's dictate and drown the rest of California's safety net in a bathtub.