Bloomberg News

California’s Chiang Says ‘We’re Not There Yet’ on Needing IOUs

June 14, 2011

June 14 (Bloomberg) -- California Controller John Chiang said “we’re not there yet” as far as issuing IOUs to pay the state’s bills, as lawmakers try to break an impasse on a plan to bridge a $10 billion budget deficit.

The nation’s largest state by population has “sufficient cash” to avoid using IOUs for now, Chiang said in an interview on Bloomberg Television’s ‘InBusiness With Margaret Brennan.’ California last did that in 2009.

The state had $2 billion more in tax revenue for the current fiscal year than estimated in January, Chiang said.

Legislators face a deadline to pass a spending plan by the end of tomorrow or lose their salary and per-diem pay as a result of a ballot measure voters passed in November, Chiang said. The new fiscal year starts July 1.

The threat of losing their income has made a “significant difference,” and Democrats may pass a plan without Republican approval, Chiang said.

--With assistance from Michael B. Marois in Sacramento. Editors: Mark Tannenbaum, Ted Bunker

To contact the reporter on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net


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