State controller warns California may be out of cash by March

The state may run out of cash by March and will need to borrow funds and delay payments worth $3.3 billion, according to a statement released today by State Controller John Chiang.

In that event, the state would need to borrow $200 million from the University of California, said UC spokeswoman Dianne Klein.

Despite Chiang’s statement, the chances of the state actually running out of cash is extremely low, Jason Sisney, a research analyst at the Legislative Analyst’s Office, said in an email.

The issue instead is trying to make all scheduled payments while keeping aside enough cash to deal with unexpected demands on the state treasury, Sisney said.