“Big 5” Meets Regarding the Budget Gap
The October 8, 2008, meeting of the “Big 5” ended with the Governor and legislative leaders indicating that they will hold off discussions of the state’s multibillion-dollar revenue gap for another week as the state deals with its short-term cash needs.
New projections indicate that the state will take in $3 billion less this fiscal year than anticipated in the State Budget that Schwarzenegger signed two weeks ago. Lawmakers will likely have to convene a special midyear Budget session to deal with the gap.
“Right now, we need to get our short-term money needs to the market, have them picked up, and then we go a step after that,” said Senate President Pro Tem Don Perata (D-Oakland) in a Sacramento Bee article.
As reported elsewhere in this issue, (see article “California May Seek Federal Loan”) California may seek a $7 billion bridge loan as early as the week of October 16 if it is unsuccessful in obtaining the initial $4 billion it needs from private credit markets through issuance of Revenue Anticipation Notes (RANs).
—Robert Miyashiro and John Gray, and Deborah Harmon