California running out of cash?

Kind of a surprise announcement - the state needs to scrape together $3.3 billion by March, Controller John Chiang told lawmakers this morning. That sounds like a lot of money - well, it is a lot of money - but it's possible to delay payments, borrow more, and shift cash from one department to another. Basically, California took in too little money last year and spent too much, creating the current shortfall. From Capitol Alert:

Chiang believes the state would not have to use IOUs or delay tax refunds, maneuvers that have been relied upon in previous years. But Chiang also said that "more cash solutions may be required if our revenues continue to erode or if disbursements significantly exceed estimates." California borrows money early each fiscal year because the state has regular monthly expenses but receives the bulk of its tax revenues in the spring. The state borrowed $5.4 billion last fall for this purpose.

Here's the letter.