For the third time in state history, California will issue IOU’s to pay creditors, students, welfare recipients. At Midnight the state ran out of money. This is due to the California Legislature not able to fulfill it obligation to have a budget ready. On Tuesday the Democrats in both houses votes came up short for the budget. There was no Republican support for tax increases in the bill. There were few cuts.
John Chiang, California Controller will have a meeting on Thursday to sort out the procedures on which to issue the iou’s. The state treasurer John Lockyear says interest rate could cost the state $3.5 billion over the next thirty years.
Meanwhile, The federal government is threatening take over state parks here in California. Governor Schwartzenegger is considering closing 220 state parks to save money to balance the budget. Six of the parks are sitting on Federal Land. The parks includes in Northern California Fort Ord Beaches, Point Sur, Angel Island and Mount Diablo. In Southern California, Point Mugu and Border Field State Beach may be affected .
