California lawmakers failed to meet a midnight deadline to pass a revised state budget. While the state is without a financial plan to solve a $24 billion deficit, local governments like SLO County are left with promissory IOUs until the budget is balanced once again.
Lawmakers passed a budget in February, but the declining economy continued to drill a hole in the state’s finances.
SLO County’s budget went into effect the same day the state was forced to begin issuing the IOUs. County Principle Administrative Analyst Dan Buckshi said county officials are expecting the state to delay payments of about $1 million to $2 million per month. But, he added, there are cash reserves to cover the delays for about six to eight months.
“If we get paid back with the IOU it will be ok,” Buckshi said.
The big problem for local governments will come later when the budget cuts are solidified and passed down to the local level. He estimated the county’s share of the state deficit could be anywhere from $10 million to $20 million, which was not factored into the recently adopted budget. Funds most likely to be cut include those for social services, health services, and road improvements.
Sen. Abel Maldonado, a Republican from the Central Coast, was a critical vote to pass the budget in February. He said the legislature could not come to an agreement because the budget on the table would have surely received a veto from Gov. Arnold Schwarzenegger because it didn’t completely close the deficit.
“We just need to do our job,” Maldonado said.