California ended its fiscal year on a positive note. Controller John Chiang announced today the state’s General Fund closed the year with a positive balance for the first time since 2007. On June 30th the General Fund had a balance of $1.9 billion dollars. That means the state did not have to borrow money from Wall Street or other state accounts to pay its bills. Chiang says that’s a departure from the past few years.
“If you remember five years back we have to borrow a lot of money. In fact we were close to running out of money so I had to issue IOU’s," he says. "The good news is that we closed out the year with some cash in the state treasury that isn’t borrowed.”
Chiang says revenues for the 2013-2014 fiscal year came in at about $102 billion , or 2 percent over the governor's January budget projections.
UCLA Professor Emeritus Daniel Mitchell says the numbers show the economy continues to recover. But he points out state revenues were bolstered by new taxes and a strong stock market. He says California’s economy is still precarious.
“There’s been a lot of talk about rainy day funds and all of that," he says. "But you’d be amazed at how fast, when you get into a recession type situation, any reserves that you’ve built up can disappear.”
A ballot measured establishing a more robust rainy day fund will go before voters in November.