California is lining up a short- term loan of more than $5 billion from a group of Wall Street banks to tide the state over with enough cash after a record- long budget impasse, Treasurer Bill Lockyer said.
The state may borrow the money from Bank of America Merrill Lynch, JPMorgan Chase & Co., Goldman Sachs Group Inc. and RBC Capital Markets once a budget is enacted and would repay the funds with an estimated $10 billion of notes it will sell in October or November, Lockyer said today in New York. The state can’t issue those notes until a budget is signed.
California has been operating without a budget since the start of its fiscal year July 1 amid a dispute over how to erase a $19.1 billion deficit. Gov. Arnold Schwarzenegger and top lawmakers are scheduled to meet at noon tuesday to continue negotiations on the budget after announcing they’d agreed to a “framework” to fill the deficit Sept. 24.
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