Lawmakers still hadn't approved the California budget, even after yesterday's emergency President's Day session that ran late into the night.
As a result, Gov. Arnold Schwarzenegger's administration told the Sacramento Bee it will halt the last of the state's 400-odd public works projects and send out as many as 20,000 pink slips to state workers today.
Money is so tight, the state has issued IOUs, or warrants, instead of tax refund checks this year.
Henry Wirth, president & CEO of the $1.4 billion SAFE Credit Union, said he's granting members access to their deposited warrant funds despite the fraud risk, and said recent state furloughs that force workers to take two unpaid days off each month are affecting member ability to repay loans.
SAFE has a community charter that includes counties surrounding Sacramento, the state's capitol.
"In this town, about 10% of the population is drawing a paycheck from the state, so if you impair that base, and add the multiplier effect, this would have a very Draconian effect on the Sacramento economy," he said.
Despite the area's struggling economy, Wirz said SAFE is budgeted to produce a positive ROA this year, so long as an alternative solution is found to the NCUSIF insurance premium hike.
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