The state treasurer says California is at its debt limit and cannot sustain any more borrowing.
Treasurer Phil Angelides was reacting to a proposal from advisers to Governor-elect Schwarzenegger to borrow as much as $20 billion this year to wipe out the mounting deficit. Schwarzenegger advisers have said one idea being considered is a big bond issue — as much as $25 billion — that would be coupled with a spending cap — both of which would be put before voters in March.
The bond measure, as proposed, would add about $8 billion to the borrowing already authorized by the Legislature. Angelides says the state has already authorized too much debt and any additional deficit borrowing would — quote –“be crippling to the state´s fiscal integrity.”