State Out of Cash?
You may see some headlines about the state running out of cash. The state controller today sent a letter to the legislature supporting passage of a bill allowing for more internal borrowing. What does this development mean? As we have noted in past blog posts, in the current fiscal year and the past two years, in common English parlance the general fund of the state has been in rough balance, i.e., inflow = outflow. But prior to that there were big deficits that ultimately left the state with a negative reserve in its general fund. When the general fund has…