At a Press Club luncheon yesterday, State Controller John Chiang estimated that he would begin issuing IOUs in “two to four weeks.” You probably remember that the Controller issued hundreds of thousands of IOUs last year about this time, when the budget adopted in February had gone severely sideways. This year, there isn’t any budget in place at all, sideways, diagonal, or inside-out. In fact, newspapers are reporting that the Big 5 haven’t met since mid-June, and legislative leaders haven’t met as a group yet this month.

But the Legislature is in action: both houses have been busy passing hundreds bills off their respective floors as the end the regular session approaches. These include such important measures as disallowing people from claiming to be certified athletic trainers without meeting certain criteria, making it illegal for condos to disallow people from using artificial turf, and making it an infraction or misdemeanor for people to enter animal enclosures at zoos, circuses, and aquariums. That said, the Legislature is considering many bills that would have a direct impact on counties, and staff here are busy working for their passage or rejection, as appropriate.

In national news, the Congressional Budget Office released their latest economic outlook early this morning. They note that the weak growth and high unemployment we have seen since the middle of 2009 is common in recoveries from recessions caused by financial crises, and that the large numbers of vacant houses and underused commercial and industrial space will be a drag on investment, slow income growth, and weigh on consumer spending. The result, they say, combined with the scheduled end of extraordinary federal aid, will mean slow (+2.0%) economic growth through 2011. This means unemployment rates will remain high, falling only to 8.8% at the end of 2011 and not falling to about 5% nationally until the end of 2014. They expect inflation to be about 1% this year and next and remain below 2% through 2014.

They note that these numbers could be improved by extending the current tax cuts, indexing the alternative minimum tax to inflation, and keeping federal government spending at its current high level, though these actions would have a negative effect on GDP and related economic numbers later in the decade because “the larger budget deficits would reduce investment in productive capital.” You can find a summary of the CBO’s economic update, as well as links to related documents (including a very interesting slideshow of charts), here.