"The situation is complicated by frozen credit markets that may impede the state's ability to borrow as much as $7 billion of short-term notes next week. Without the loan, the state could run out of cash by month's end."
"The first quarter of the fiscal year has just ended, and we already are short $1.1 billion,'' California Controller John Chiang said in statement. "Revenues are deteriorating faster than expected, and September's cash flows send strong signals that the recently enacted budget is more out of balance than we feared.''
"...lawmakers agreed to cut $8 billion in spending and raised fees and tax penalties on corporations. The actions did nothing to address the ongoing gap between revenue and expenses, and the deficit for the next fiscal year is expected to exceed $6 billion."
"California, the biggest borrower in the municipal-bond market, has $51 billion in general-obligation debt outstanding. The state is rated A+ by Fitch Ratings and Standard & Poor's, the fifth-highest rankings, and a comparable A1 by Moody's Investors Service."
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