NEW YORK (CNNMoney.com) — The world’s eighth largest economy is on the verge of issuing IOUs.
Suffering from both a $15 billion budget deficit and a multi-million dollar cash shortfall, California is days away from not having enough money to cover all of its bills.
Starting on Sunday, state controller John Chiang plans to delay sending state tax refund checks, payments to contractors and disbursements to counties and agencies that provide social services. He estimates that the state will be at least $346 million short in February.
“Rather than helping stimulate the economy, withholding money from Californians will prolong our pain and delay our economic recovery,” he said. “Individuals who already are vulnerable will be hit hard.”
