California Controller warns of looming cash flow crisis

California State Controller John Chiang sent a letter to lawmakers on Tuesday, informing them that the state will be out of money by March if measures aren't taken to remedy the situation.

Chiang is proposing a $3.3 billion cash fix through borrowing, payment delays and deferrals. If the issue isn't addressed, Chiang said, California's General Fund balance would dip below the $2.5 billion minimum safety cushion on Feb. 29.

 "On the following day, cash will be exhausted and will continue to decline until hitting a low of -$730 million on March 8," Chiang said in the letter.

 He said he believes the cash shortfall can be made up without issuing IOUs.

The Legislative Analyst’s Office predicted at the end of last year that California's budget shortfall would be about $13 billion.