California's controller says he will begin a 30-day delay on tax refunds and other payments starting Feb. 1 because the state is running out of money.
Controller John Chiang said Friday he will have no choice but to delay $3.7 billion in payments next month because lawmakers have so far failed to address California's growing deficit.
The state is on the brink of issuing IOUs as it faces a $41.6 billion shortfall over the next year-and-a-half.
Chiang says his office must continue education and debt payments but will defer money for tax refunds, student aid, social services and mental health programs.
A severe drop in tax revenue has left the state's main bank account depleted. The state had been relying on borrowing from special funds and Wall Street investors, but those options are no longer available.