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Budget impasse starting to take toll on state vendors. (Up Front).


The state budget stalemate stale·mate  
n.
1. A situation in which further action is blocked; a deadlock.

2. A drawing position in chess in which the king, although not in check, can move only into check and no other piece can move.

tr.v.
 has hit home for L.A.-based electrical supply wholesaler Aaron Comfort.

Comfort's firm, Supreme Wholesale Electric Inc., gets 10 percent of its revenues from supplying electrical equipment A piece of electrical equipment is a machine, powered by electricity and usually consists of an enclosure, a variety of electrical components and often a power switch. Examples of Electrical Equipment
  • Cathodic protection rectifier
  • Fire alarm panel
 to California prisons and other state agencies. For the last month, he's not been getting paid.

"I'm having to borrow from my credit line" said Comfort, adding that he's not going to deliver any more electrical equipment to the state until he can be assured he'll be paid.

Comfort is one of scores of business owners who work with the state but are not getting paid, thanks to the record-long budget crisis.

The state's fiscal year began on July 1. While the state Senate passed a budget just before the July 4 holiday, the state Assembly has been deadlocked dead·lock  
n.
1. A standstill resulting from the opposition of two unrelenting forces or factions.

2. Sports A tied score.

3.
 over how to close a record $23.5 billion deficit. The Democratic majority has insisted on a mix of tax increases, borrowing and spending cuts Noun 1. spending cut - the act of reducing spending
cut - the act of reducing the amount or number; "the mayor proposed extensive cuts in the city budget"
; Republicans have generally held the line against new taxes.

The budget requires a two-thirds majority to pass, which means at least four Republicans must sign on. As of late last week, the Republicans were still holding out.

The impact of the budget crisis was hardly felt in July and August because the state sold $7.5 billion in bonds to cover its most urgent bills. But from the start, state officials have determined that vendors and elected officials and their staffs would not be paid.

Some state vendors have been hit harder than others. Several said it often takes two or three months from the time the goods are sold or the work is performed until payment is received. Often, the companies themselves take several weeks to bill the state; the state in turn takes several weeks to pay invoices when they come in, even when there is a budget.

Vendors generally rely on the state for only a small percentage of their overall revenues, usually less than 10 percent.

That's the case for Gary Fishman, owner of Ventura-based Johnstone Supply, a provider of electrical equipment with offices in Lancaster, Upland Upland, city (1990 pop. 63,374), San Bernardino co., S Calif., in a citrus-fruit region at the foot of the San Gabriel Mts.; inc. 1906. Citrus fruits and grapes are packed and processed in the city. Paint, orchard heaters, auto parts, and feed products are also made. , Baldwin Park Baldwin Park, city (1990 pop. 69,330), Los Angeles co., S Calif., a suburb of Los Angeles, in the fertile San Gabriel valley; settled 1870, inc. 1956. Its industries include metal fabrication, printing, and plastics manufacturing.  and Thousand Oaks Thousand Oaks, residential city (1990 pop. 104,352), Ventura co., S Calif., in a farm area; inc. 1964. Avocados, citrus, vegetables, strawberries, and nursery products are grown. . Fishman said less than 5 percent of his total business comes from sales of air conditioning air conditioning, mechanical process for controlling the humidity, temperature, cleanliness, and circulation of air in buildings and rooms. Indoor air is conditioned and regulated to maintain the temperature-humidity ratio that is most comfortable and healthful. , heating and lighting equipment to the state.

"It's only been a minor issue so far," Fishman said. "But if the budget stalemate continues, it will become a problem for us."

But neither Fishman nor Comfort said they planned to drop the state as a client. "It's a risk that comes with the territory," Fishman said.
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Title Annotation:California, state budget stalemate
Comment:Budget impasse starting to take toll on state vendors. (Up Front).(California, state budget stalemate)
Author:Fine, Howard
Publication:Los Angeles Business Journal
Article Type:Brief Article
Geographic Code:1USA
Date:Sep 2, 2002
Words:423
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