According to a press release by the State Controller of California, John Chiang, he has completed “stress testing” the Department of Finance’s cash projections from the State’s newly-revised budget and has determined the new spending plan will provide the State Treasury with enough cash to stop issuing IOUs on September 4, almost one month earlier than expected.
The Controller has advised the Governor, Treasurer and legislative leaders that current projections show the State will need to borrow $10.5 billion to meet California’s cash needs for the fiscal year.
Based on the State Treasurer’s assurance that he will be able to obtain an interim $1.5 billion loan by August 28, the Controller set September 4 as the date he could stop issuing IOUs and the Treasurer may begin redeeming those that have already been issued.
At the Controller’s request, the Pooled Money Investment Board (PMIB) has scheduled an emergency meeting for August 21. At that meeting, the Controller will ask the board to approve a redemption date of September 4, which is almost one month earlier than the October 2 maturity date printed on the IOUs.
Click on the following link to access the press release: