On politics in the Golden State
August 13, 2012 | 5:18 pm
California scrambles to pay its bills with more borrowing.Embedded in a Monday report from the California controller is a statistic showing just how much the state is straining to pay its bills before November’s vote on higher taxes.
Controller John Chiang, who manages the state’s cash flow, finished July with more than $18 billion in outstanding loans after using high-speed accounting to cover day-to-day expenses. That means he would borrow some money from the state’s 500-plus “special” funds, used it to pay a bill and promised to repay it later when more tax revenue rolls in.
It’s a standard maneuver, especially at the beginning of the fiscal year, when expenses outpace revenues. But the controller leaned more heavily than usual on this tactic last month, tapping 81% of the money available for short-term borrowing, up from 48.4% in July 2011.
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