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  From a June 29 press release from State Controller John Chiang
(www.controller.ca.gov)

The Controller will continue to make the following payments:
 
• Federally-mandated services such as Supplemental Security Income/State Supplementary
Payment (SSI/SSP), and In-Home Support Services.
• Debt service and other financial obligations authorized by the State Constitution.
• Payroll for state employees covered by the Federal Fair Labor Standards Act.
• Vendor payments for services provided in the fiscal year ending June 30.
• Expenses with ongoing appropriations from the Legislature, including Medi-Cal,
CalWORKs, income tax refunds and payments on claims for unclaimed property.

Without a budget by the start of the new fiscal year, the Controller cannot pay:
 
• School districts for categorical programs such as special education and remedial summer
school, community colleges, local governments and other entities not included in the
above parameters.
• Vendors for services provided after July 1.
• Salaries and per diem of state elected officials and their appointed staff.
 
Large payments to community colleges and schools come due at the
end of July; without a budget in place by mid-July, those payments cannot be made.