Thought Leadership

California Bulletin

July 2, 2009

The Governor of California has declared a fiscal emergency and called a special legislative session which by law can not adjourn until the budget has been passed.  In the absence of an approved budget, the state will begin paying bills with IOUs and state Controller John Chiang has warned that the state may run out of cash entirely by the end of July.  This commentary will address certain credit fundamentals including payment of debt service, the state’s cash position, the budget and how we are positioning our clients’ portfolios.