SAN FRANCISCO — California Treasurer Bill Lockyer said the state expects to issue only $5 billion of revenue anticipation notes this summer as a result of the budget likely to be passed Tuesday.
In a letter to Gov. Jerry Brown and Democratic leaders, Lockyer said the budget plan reduces the need for cash-flow borrowing by as much as $2 billion, setting up a sale of $5 billion of revenue anticipation notes later this summer. The Legislature’s budget vetoed by Brown had projected a $7 billion Ran sale.
Under earlier projections, California had been slated to go to market this summer with an around $10 billion annual note sale to help balance out cash flow to pay for operations, but Lockyer had warned that the state wouldn’t have a market for Rans unless the budget was honestly balanced.
“I am confident the plan provides sufficient assurance that the state can repay its normal summer cash-flow borrowing by the end of the budget year,” Lockyer said in the letter.
Tom Dresslar, a spokesman for the treasurer, said the budget agreement assumes $10.6 million in additional debt-service savings in fiscal 2012, but that does not necessarily mean the state will reduce the amount of bonds it plans to issue.
California so far expects to sell $3.9 billion in general obligation bonds later this year but chose to skip its traditional spring GO sale.
