California can handle all of its cash flow needs in-house, State Controller Betty Yee said Monday, the first time since before the dot-com bust that that the state will make it through a fiscal year without turning to Wall Street for short-term loans to smooth the ebb-and-flow of tax revenue.
The state has used “revenue anticipation notes,” known as RANs, in every year since the 2000-01 fiscal year. After that, Silicon Valley billions gave way to shortfalls, and the state suffered chronic budget problems for much of the next decade, including a low point during the recession that hit in 2008.
Monday, Yee’s office reported that the $5.7 billion in state revenue last month was virtually identical to what lawmakers predicted in the June budget package. In addition, the state has “unused borrowable resources” in various special funds totaling $26.1 billion, about 11 percent more than anyone expected.
That is more than enough money to cover the state’s short-term cash needs when general fund spending temporarily exceeds revenue, Yee’s office said, without any need for RANs – and the interest expense that comes with using them.