Report: State Nearly Broke, Unlikely to Borrow

Is a financial doomsday approaching in the cash-strapped state of California?

The California Legislature's budget analyst said Thursday that the state may need to borrow more than $20 billion in short-term loans to cover all its bills next year -- but it's poor credit rating may make that impossible, according to a published repor.

The nonpartisan Legislative Analyst's Office released a cash flow report Thursday showing the state will have to take on record borrowing if voters reject the May special election ballot measures.

The report shows that the state could run out of cash by July 1, the Los Angeles Times reported, adding that the state's poor credit makes it unlikely that the California could raise the cash necessary in time to fix the problem.

Gov. Arnold Schwarzenegger's financial officials had estimated the state would have to borrow $13 billion for California to get through the 2009-10 fiscal year. Since then, however, the analyst's report says revenues have been down.