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Controller Releases January 2010 Cash Update

Contact: Jacob Roper

SACRAMENTO – State Controller John Chiang today released his monthly report covering California’s cash balance, receipts and disbursements in January. The month’s receipts rose above the Governor’s 2010-11 budget estimates by $1.28 billion, or 18.6%.

“The positive receipts are welcome news, but the State cannot be lulled into a false sense of security,” said Chiang. “Our cash position falls below safe levels this Spring, and goes into the red this Summer. Our chronic budget shortfalls require credible and sustainable fixes in order to protect taxpayers, local governments, and state funded programs.”

The Controller updated his cash-flow outlook to reflect January’s totals. These estimates are based on the results of stress-testing cash-flow projections in the Governor’s most recent budget proposal that were updated with January’s actual revenue and expenditure data. The State now dips below its minimum $2.5 billion cash cushion on March 30 and does not return to safe levels until April 16.

Year-to-date receipts are ahead of budget estimates by $459 million, or 1%, but state payments also went out faster than expected. Disbursements through January 31 were $586 million ahead of projections.

Special funds, which the State can borrow from to bolster its General Fund cash position, were $1.6 billion higher than projected on January 31. But historical patterns show that $627 million of those funds may not be available for future cash-flow borrowing. That leaves the State’s true cash position $855 million ahead of projected levels on January 31.

The State started the fiscal year with an $11.9 billion cash deficit in the General Fund, which grew to $24.1 billion by January 31. Those deficits are being covered with a combination of $15.3 billion of internal borrowing from special funds and $8.8 billion in short-term Revenue Anticipation Notes.

January 2010's financial statement and the summary analysis can be found on the Controller’s Web site at