California delays $3.5 billion in payments

http://finance.yahoo.com/news/California-delays-35-billion-cnnm-14227365.html

Running short of cash, California has started delaying $3.5 billion in payments to taxpayers, contractors, counties and social service agencies.
Some 257,400 jobs in the Golden State evaporated in 2008, pushing the unemployment rate up to 9.3% in December, the fourth highest nationwide. Its median home price plunged nearly 50% since the spring of 2007.

To shore up California's budget, the governor wants to slash spending by $17.4 billion, according to the California Budget Project. Included are cutting $7.7 billion from public education, eliminating dental and other benefits for adults on Medicaid and requiring state workers to take two unpaid days off per month.
Schwarzenegger is also looking to boost revenue by $14.3 billion and borrow $10 billion more. He wants to raise the state sales tax by 1.5 points - to 8.75% - through the end of 2011 and hike alcoholic beverage taxes by a nickel a drink.