California, one of the wealthiest states in the United States, may exhaust its reserves for public spending late this month unless the current credit crunch is solved soon, according to the state's top financial official Wednesday.
The state government will be hard-pressed to pay its bills next month for critical needs from teacher salaries to nursing home services if the Congress could not promptly act to calm the U.S. fiscal storm, state Treasurer Bill Lockyer warned in a statement.
Governor Arnold Schwarzenegger last month signed California's annual 145-billion-dollar spending budget, which had been delayed for a record 85 days because of disputes between state lawmakers over the spending plan. The state begins its fiscal year on July 1.
Lockyer said Wednesday that if lawmakers in Washington still could not agree on the Bush Administration's 700-billion-dollar Wall Street bailout plan, the national financial crisis is threatening to exhaust California's reserves by late this month.
"The credit market is frozen because financial institutions are afraid to commit capital amid enormous uncertainty," Lockyer said in the written statement.
He stressed that the state is currently unable to sell infrastructure bonds and short-term securities that are necessary to meet the state's cash-flow needs.
Exhausting California's cash reserves would have dire consequences, as payments for teacher salaries, nursing homes, law enforcement and every other state-funded service would stop or delayed, he said.
Source: Xinhua
|
Comment
Tell A Friend
Print Format
Save Article