The state of California has a massive budget deficit, and according to the State Controller of California finances are even worse than expected. State Controller John Chiang announced that for the month of July California’s revenues came in $91 million dollars lower than expected, while its expenditures cost about $963 million more than expected.
That puts California over another $1B in the hole and today on “Varney & Co.” the Reason Foundation’s Adrian Moore said the state's just borrowing the money from future payment promises “Overspending by a billion dollars in July just means they’re stretching that credit even further than expected.” Moore said.
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Right now California is operating without a budget. The state does have enough money to operate on credit through the end of October, but with all this extra money owed, that deadline may be moved up dramatically. “We might not be able to make payments on something. Is it going to be payroll? Is it going to be debt?” Moore said. “Something dramatic is going to happen in about two months unless we pass a budget.”