Statewide Issues
Cash Management Improvement Plan

In the past, the state disbursed significantly more General Fund dollars than what had been collected between the months of July and March of each year. This resulted in a very low cash balance by the end of each March and necessitated the issuance of large amounts of external borrowing to cover cash needs. The Administration proposed and the Legislature approved a plan to improve cash management to smooth cash flow imbalances and to reduce the amount of external borrowing the state will need to meet its cash needs in 2008-09. To smooth out the cash flow imbalances, certain payments for the following programs will be shifted during the year: Education (K through 12, excluding Child Development), the University of California, Community Colleges, the Williamson Act, and Citizens' Option for Public Safety/Juvenile Justice Crime Prevention Act.

The plan will reduce the amount of external borrowing by $3 billion to $4 billion in 2008-09, and will result in savings of tens of millions of dollars, depending on interest rates and external borrowing issuance timing. This plan could potentially result in improving rating agencies' perception of the state's credit and saving millions in associated borrowing costs.
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CHAPTER HIGHLIGHTS for Statewide Issues Back to Top

 General Fund Reduction
image of black pointing arrowCash Management Improvement Plan
 Financial Information System For California
 Health Benefits for Annuitants and Active Employees
 Reimbursable State Mandates Program
PRINTABLE BUDGET DOCUMENTS Back to Top
Enacted Budget Summary - Statewide Issues (pdf * - 53K) -
Provides the entire Statewide Issues Chapter in pdf format.