Today’s the deadline for California’s broken political apparatus to close the state’s monster budget gap. Of course they’ll fail — the state’s broken political system is beyond repair and cannot fix itself — so the state’s various counterparties should expect not to get paid.
Before defaulting on lenders, the state will first screw over various private parties.
SF Chronicle: From today on, Schwarzenegger said, every day that passes without closing the deficit is a step toward insolvency.
“Now, the controller has already said that the deadline is June 15,” the governor said Friday in a public appearance in Escondido (San Diego County). “In fact, this week I sat down with the controller and also with the treasurer. We all agreed that after June 15, every day of inaction jeopardizes our state’s solvency and our ability to pay schools and teachers and to keep hospitals and ERs open.”
The state’s priorities for getting things paid fall in this order: education and debt payment, special funds, pension obligations, payroll and Medi-Cal payments. Read the whole thing >