“There can be no assurances that the spread of a novel strain of coronavirus called COVID-19 will not materially impact the state and national economies and, accordingly, materially adversely impact the general fund,” California said in documents circulated to investors for its bond sale next week. “While the effects of COVID-19 on the state may be temporary, it appears to be altering the behavior of businesses and people in a manner that may have negative impacts on global and local economies.”
While California has enjoyed a robust recovery from the recession, with credit ratings the highest in nearly 20 years and unemployment at a record low, it is vulnerable to market declines because of its reliance on the wealthy to fund its services.
The state told investors that while the impact is “currently uncertain,” it may become a factor in Governor Gavin Newsom’s updated budget for the next fiscal year, to be released in May.
https://www.bloomberg.com/news/articles/2020-03-02/california-warns-virus-could-affect-its-finances
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