Spencer Michels reports on California's struggles to address a $24 billion shortfall in the state budget, which lawmakers say puts the state in danger of running out of money.
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Next tonight, California's budget crisis. NewsHour correspondent Spencer Michels has our update report.
SPENCER MICHELS, NewsHour Correspondent:
State workers, whose jobs are in jeopardy, rallied at the Capitol in Sacramento, while legislators continued to wrangle over how to close a huge $24 billion budget shortfall that would also require big reductions in health and welfare programs.
But that wrangling got nowhere, as various plans could not attract enough votes to become law. State Controller John Chiang says the situation is so bad that he will start paying some California bills with IOUs as early as next week.
JOHN CHIANG, California Controller:
It is a very serious matter. Absent action by the governor and legislature to provide for sound cash and budget solution, the state runs out of money on July 28th. When you look at the fiscal crisis here in California, it's the greatest since the Great Depression.
Chiang wants to keep California's credit, already the lowest rated in the country, from crashing.
So it's going to be harder for California to get loans or more expensive?
It's going to be much more difficult, and I think that's going to apply to other jurisdictions. There are 47 states that are experiencing some type of budget difficulty today in the United States.