SAN FRANCISCO (Reuters) - California will issue $11 billion in short-term debt this spring, an amount state officials called a nationwide record, to pay its bills while legislators try to devise a budget for a state facing a revenue crunch.
"We are borrowing $11 billion so California will be able to pay its bills into the start of next fiscal year," State Controller Steve Westly said in a statement. "However, without a budget, we'll face another cash crisis and legal restrictions on which bills can be paid.
Last month, Westly said the state would borrow between $9 billion and $11 billion to help repay an outstanding $12.5 billion note sale and to ensure the state had enough cash when the new fiscal year begins on July 1.
The announcement follows approval by the California state legislature on Thursday of a $4.6 billion package of budget cuts and pension bonds. The plan, passed in both the Senate and the Assembly with little debate, would save $3.6 billion in fiscal 2003-04 and about $1 billion the following year.
Also on Thursday, the California Supreme Court ruled that state workers paid by the hour should get only minimum wage of $5.15 if a budget is not passed by July 1.
