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California will delay paying $2.9 billion of subsidies to schools and counties in September, a month earlier than projected, to save cash amid an impasse that has left the state without a budget for 54 days.
The state’s top financial officials -- the controller, treasurer and finance director -- told lawmakers today that the 90-day deferrals need to start next month instead of October to make sure there’s enough money to pay bondholders.
The state, with the world’s eighth-largest economy, issued $2.6 billion of IOUs last year after a similar budget stalemate. That was only the second time since the Great Depression that California had to use warrants to cover costs and conserve cash.
Schwarzenegger’s budget office opposes the IOU bill because it may reduce the state’s cash position to less than projected, said Palmer, the spokesman. Draining the state’s coffers would defeat the purpose of the warrants, he said.