Budget talks have broken down at the state Capitol and lawmakers still have a multi-billion dollar deficit to grapple with. One option that's been floated is putting Governor Jerry Brown's tax extension measure on a November ballot initiative. But Treasurer Bill Lockyer says if the budget remains unresolved that long, it would make it nearly impossible for the state to borrow money for projects:
"But if we don't get to the bond markets this fall, then it's highly likely that thousands of public works jobs will begin to shut down sometime early next year."
Lockyer says short-term borrowing - which the state does every
summer to help pay its bills - would also be impossible without a
budget in place. He says that would likely mean months of
IOU's - something that could further undermine the state's credit
rating.