Features

SACRAMENTO — California will face a “perfect storm” if the lawmakers can’t pass a state spending plan by the end of the month, state Controller Kathleen Connell said. 

“There would be a series of rippling financial problems if the Legislature does not get a state budget passed,” Connell said. 

Starting on Sept. 1, the state will be unable to make payments for services that aren’t mandated by federal and state law, Connell said. Abortion services and state programs for the developmentally disabled are the latest programs in jeopardy. 

Those programs were protected under special legislation passed in 1998, which authorized the controller to continue cash payments through Aug. 31. 

Connell also announced that revenue was down for June, July and most likely August, meaning the state could face an additional $3 billion deficit that will have to be worked into this year’s or future budgets. 

In the worst-case scenario, the state would not have enough cash to meet financial obligations in October and November. If that’s the case, California will have to sell a “super-sized” revenue anticipation warrant, a short-term debt security, which could come with a high interest rate and bump up future financial obligations, Connell said. 

With just four days left until the end of the legislative session, Assembly Republicans said Wednesday they are still “miles apart” from Democrats in reaching a budget agreement.