On an unanimous 3-0 vote, California's top fiscal officials voted today to cut off bond funding for infrastructure projects across the state to conserve money ahead of the state's looming cash crunch.
State Treasurer Bill Lockyer, Finance Director Mike Genest and Controller John Chiang -- the three members of the usually obscure Pooled Money Investment Board -- all voted to cut off $3.8 billion in funding this morning.
California faces a nearly $40 billion shortfall in funds through July 2010. But, of more immediate concern, those fiscal officials say, is that the state will run out of cash sometime in February unless taxes are raised or spending is cut.
A spokesman for Gov. Arnold Schwarzenegger, Aaron McLear, ripped the Legislature for its "politics and posturing" while "tens of thousands of hard-working Californians face the possibility of being laid off this holiday season."
The Assembly failed to pass a Democratic budget plan Tuesday night, failing to garner needed GOP support. Both houses are expected to reconvene today, with Democrats unveiling a majority-vote budget plan that would make an end run around Republican lawmakers.
Chiang called today's vote to shut off infrastructure financing "extremely painful."
"Today's action was extremely regrettable, but the responsible and right thing to do," Lockyer added in a prepared statement. "We had no other option to keep crucial public services operating as long as possible."
The move shuts off state bond funding for nearly 2,000 projects, ranging from highways to levees to schools to prison construction, the treasurer's office said.
Staff members have recommended the panel meet again in two weeks to consider making exceptions to the financing cutoff.
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