SACRAMENTO — California Gov. Arnold Schwarzenegger unveiled his initial fiscal 2011 budget proposal today, which calls for “external borrowing” as part of plans to manage cash flow as the state attempts to close a hole of almost $20 billion.
The state will have the resources to pay its outstanding revenue anticipation notes that come due this May or June, though cash will be tight in March, finance director Ana Matosantos said at the budget presentation.
After that, California will need a cash-flow borrowing, in the form of new Rans, in the $10 billion range soon after fiscal 2011 begins July 1, she said.
“We’d be looking to borrow from the markets come August,” Matosantos said.
The governor’s budget proposal addresses a $6.6 billion hole in the current fiscal year budget, plus another $12.3 billion shortfall projected in fiscal 2011.
The budget proposal depends on $6.9 billion in additional federal support for a variety of health and social programs, which if not forthcoming, would result in the elimination of many of those programs, plus the partial extension of increased income taxes and elimination of several business tax credits.
The governor also declared a budget emergency that requires lawmakers to address the current-year shortfall within 45 days, while putting other legislation on the back burner.
The budget proposal also calls for $680 million in new grant anticipation revenue vehicle bond borrowing.
