K-12 Tax & Spending Climate: California Budget Gap May Reach $28.1 Billion Over 18 Months, Brown Says

Michael Marois

California's budget gap may widen to $28.1 billion over 18 months, according to Governor-elect Jerry Brown, who takes charge of the most-populous U.S. state next month. A cash shortage may force the use of IOUs by July, Controller John Chiang said.

The deficit estimate takes into account a $2.7 billion drop in projected estate-tax receipts, and compares with the most recent forecast of a $25 billion gap for the period, Brown said today at a public meeting of state officials. The cash accounts may be short by $2.3 billion within eight months, Chiang said at the meeting in Sacramento.

"I don't want to say it, but this could mean IOUs and more tax-refund deferrals," Chiang said.

Posted by Jim Zellmer at December 18, 2010 2:32 AM
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