Gov't Shutdown Could Harm California's Recovering Economy

“California has really moved its budget in the right direction in recent years.  And at the same time, that momentum is threatened to some extent, by the inability of decision-makers in Washington to reach agreement,” says Jason Sisney with the non-partisan Legislative Analyst’s office.

Sisney says a potential shutdown and the upcoming debt ceiling fight could do severe harm to California’s recovering economy by reducing state revenues and pushing the state back into a deficit.  He's especially worried about what would happen if the U.S. were to default on its debt.

“We’ve had shutdowns in the past – in the mid-90s.  They may be disruptive; they may affect consumer confidence.  But the effect of the federal government not reaching agreement on the debt ceiling could be much greater,” Sisney says.

The governor’s Department of Finance says all state programs and services have enough funding to keep operating for the next month.  After that, some programs like food stamps and school lunches could run out of money.