Status of Payments Upon Enactment of Fiscal Year 2010-11 State Budget

Update: The California Treasurer’s Office has succeeded in obtaining an interim $6.7 billion borrowing which will allow the State to pay the $5.5 billion in delayed payments to individuals and businesses owed tax refunds, community colleges, and K-12 schools that were authorized by AB 1624

The only AB 1624 deferrals that will continue to be held are $323 million in Cal Grant payments to UC and CSU, and a $359 million payment to UC. However, UC and CSU will continue to pay Cal Grants to students using other funds until the State releases the payments.

All of the UC and CSU payments will be held until no later than December 10, or until the Treasurer is able to complete the traditional, full cash loan, expected in late November.

The more than three-month-long stalemate over a spending plan resulted in the State being unable to make more than $8 billion in payments to private businesses that contract with the State, school districts for categorical programs such as special education and remedial summer school, community colleges, local governments and other agencies.

With the enactment of the budget bill, the following payments that have been held since the start of the fiscal year on July 1, 2010, will now be made, provided there is sufficient cash in the Treasury:

• CalGrants for students attending community colleges,
• Payments owed to businesses and individuals who provide services or products to the State, and
• Various payments to community health clinics and mental services.

To pay the unprecedented backlog of claims that was built up during the budget impasse, Controller Chiang has instructed his staff to work around the clock to get these desperately needed claims out the door as quickly as possible. The Controller estimates claims will be paid between 1 and 15 days after they are submitted by departments and agencies.

To satisfy the State's obligation to make payments deemed by federal law and the State Constitution to have first call on cash, the Legislature approved Assembly Bill 1624. This bill delays approximately $5.5 billion in payments until a short-term cash borrowing can be achieved by the State Treasurer.

The majority of the payments delayed per Assembly Bill 1624 will be to agencies that had previously received payments, despite the absence of a budget. Those include K-12 Proposition 98 appropriations, personal and business income tax refunds, and payments to the California State Teachers’ Retirement System and the University of California.

Other payments that were not authorized to be paid without a budget will continue to be delayed under AB 1624 until there is sufficient cash in the State Treasury. Those include payments to K-12 for categorical programs such as special education and remedial summer school, community colleges for operational costs and salaries, and CalGrants for the students attending the University of California and the California State University.

All CalWorks (Stages I, II and III) October payments, and previously delayed CalWorks payments, are now scheduled to be paid in October providing sufficient cash is available.

Below are two sets of tables:

The first set is an estimate of those payments that will be delayed -- or will continue to be delayed -- upon enactment of the Budget.

The second set is an estimate of July-October bills that were not paid without an enacted Budget but can be paid upon approval of the Budget (providing sufficient cash is available).

Additional information is available on our page of frequently asked questions and answers (FAQs).

Please note that this page will be updated as new information becomes available.

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Estimate of Payments That Will Be Delayed, Or Will Continue To Be Delayed, Upon Enactment of the Budget:

Payments That Were Made Without A Budget But Will Be Delayed In October 2010 Per Assembly Bill 1624 (Amounts in Millions)
Category	Amount	Scheduled to be paid	Will be paid
K-12 Monthly (Revenue Limits)	$2,640	October 27	November 15
Personal Income Tax Refunds	$491	November 9	November 9
Business Tax Refunds	$54	November 9	November 9
California State Teachers' Retirement System	$316	October 15	November 15**
University of California	$359	September 30 / October 29	3rd week of December
Total	$3,860

**The CalSTRS payment deferral from October 15 to November 15 will be offset with a payment acceleration later in 2011 -- from April 15 to March 14 -- resulting in a neutral fiscal impact to the system.

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Payments Not Made Without Budget That Will Continue to be Delayed in October 2010 Per Assembly Bill 1624 (Amounts in Millions)
Category	Amount	Scheduled to be paid	Will be paid***
K-12 Monthly Apportionment (Categoricals)	$300	October 27	November 4
Community Colleges	$537	October 27	November 4
CalGrants - University of California	$188	July-October	December 10
CalGrants - California State University	$135	July-October	December 3
Total	$1,160

***Or paid earlier if there is sufficient cash flow borrowing.

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TOTAL PAYMENTS TO BE HELD IN OCTOBER 2010 (Amounts in Millions)
Category	Amount	Scheduled to be paid	Will be paid
TOTAL	$5,020	VARIOUS	VARIOUS

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Estimate of July 1-October 31 Bills That Were Not Paid Without an Enacted Fiscal 2010-11 Budget But Can Be Paid Upon Enactment of the Budget:

Education Estimate of July1-October 31 Bills That Can Be Paid with the Enactment of 2010-11 State Budget (Providing Sufficient Cash Is Available) (Amounts in Thousands)
Category	Can Be Paid
UC (non-Payroll Expenses)	$123,105
Community College Payments	$1,304,397
K-12 Monthly Apportionment (Categoricals)	$730,000
Nutrition	$89,108
Child Development (Other)	$331,372
Child Development (CalWORKS Stage III)	$131,124

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Payments to Individuals Estimate of July1-October 31 Bills That Can Be Paid with the Enactment of 2010-11 State Budget (Providing Sufficient Cash Is Available) (Amounts in Thousands)
Category	Can Be Paid
CalGrants	$803,369

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Trial Courts Estimate of July1-October 31 Bills that Can Be Paid with the Enactment of 2010-11 State Budget (Providing Sufficient Cash Is Available) (Amounts in Thousands)
Category	Can Be Paid
Non-Payroll Expenses	$96,499

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Payments to Vendors Estimate of July1-October 31 Bills that Can Be Paid with the Enactment of 2010-11 State Budget (Providing Sufficient Cash Is Available) (Amounts in Thousands)
Category	Can Be Paid
Transportation Revolving Fund (Transportation Expenditures)	$380,633
Other Miscellaneous	$1,828,889

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Medi-Cal Estimate of July1-October 31 Bills that Can Be Paid with the Enactment of 2010-11 State Budget (Providing Sufficient Cash is Available) (Amounts in Thousands)
Category	Can Be Paid
Institutional Providers	$1,276,390

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Social Services Estimate of July1-October 31 Bills that Can Be Paid with the Enactment of a 2010-11 State Budget (Providing Sufficient Cash is Available) (Amounts in Thousands)
Category	Can Be Paid
County Administration	$84,252
Developmental Services - Regional Centers	$988,052

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Local Government Estimate of July1-October 31 Bills that Can Be Paid with the Enactment of 2010-11 State Budget (Providing Sufficient Cash is Available) (Amounts in Thousands)
Category	Can Be Paid
Highway User Tax	$92,300

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State Employees' Pay and Benefits (including CSU) Estimate of July1-October 31 Bills that Can Be Paid with the Enactment of 2010-11 State Budget (Providing Sufficient Cash is Available) (Amounts in Thousands)
Category	Can Be Paid
Appointees and Other Exempt Employees	$18,018
Legislative Employees	$64,000
Legislators	$3,744
Statewide Elected Officials	$280

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ESTIMATED TOTALS Estimate of July1-October 31 Bills that Can Be Paid with the Enactment of 2010-11 State Budget (Providing Sufficient Cash is Available) (Amounts in Thousands)
Category	CAN BE PAID
TOTAL	$8,345,533

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