It’s only been a handful of times in the last three decades that the budget’s been approved by the Constitutional deadline. The track record isn’t much better for a budget agreement by the start of the new fiscal year July 1st. State Department of Finance Spokesman H.D. Palmer warns a really late budget this year will make creditors nervous about lending money to the state.
"We will probably be able through all the tools we have at our disposal to be able to manage through July and August. But the longer we go, the more costly it could very well be in terms of any additional interest costs we have to pay.”
So why the delays? This year there are the expected disagreements over tax increases and spending cuts to fill California’s 19-billion dollar budget hole. Governor Schwarzenegger also wants reform of the state pension system as part of the deal. But ultimately lawmakers don’t face consequences over a late budget, so there’s no reason for them to be in any rush.