SAN FRANCISCO — California’s cash position has improved enough for the state to avoid any more short-term external borrowing before the fiscal year ends June 30, state Controller John Chiang announced Tuesday.
“Averting the need for additional borrowing in a still-tight market is great news and will save Californians about $15.4 million in high interest rates,” Chiang said in a statement.
The state had been planning to issue $1.5 billion of revenue anticipation notes to provide cash through the end of the fiscal year.
That will no longer be necessary for several reasons, according to Chiang.
The reasons include the state’s March 23 private placement of a $500 million Ran issue with Sacramento-based Golden 1 Credit Union; the Legislature’s approval last week of a bill that allows the state to receive more than $1.5 billion in federal stimulus funds in April; and the state having higher-than-projected funds available for internal borrowing, largely because they were not tapped when the government stopped funding infrastructure projects during the cash crisis.
As a result, California can meet all its payment obligations through June 30, the end of the fiscal year, Chiang said.
The controller’s office now projects that the state’s cash position will hit a low point of $1.1 billion on Wednesday.
Chiang added that the state will likely need to borrow externally in the summer to bridge a $10.6 billion gap between projected expenditures and revenues.