California starts the new budget year today — and once again no budget is in place. Legislators are making little progress closing a $15.2-billion shortfall. Democrats demand new taxes. Republicans say that is out of the question. Meanwhile, their inability to strike a deal threatens millions of Californians who rely on the government for healthcare and other services reports the Los Angeles Times.

Schwarzenegger’s budget plan too rosy, analyst saysNew Schwarzenegger budget for California would divert gas taxes Budget delays are not unusual. But the consequences will be particularly harsh this year. Many of the healthcare clinics and other service providers that have used private loans to get by during past budget stalemates are unlikely to have easy access to such cash this year, as a result of the ongoing credit crunch brought on by the mortgage crisis.

Independent service providers aren’t the only ones that could soon be scraping to find money. Short-term bonds that finance officials rely upon to replenish state coffers cannot be sold without a budget in place, and getting them to market takes at least a month.

The state may have to turn to a syndicate of investment banks for short-term financing, on terms that could prove costly, said H.D. Palmer, deputy director of the state Department of Finance. The financing could cost $140 million more than bond borrowing would have, he said.

Read it here: California will pay for yet another late budget