SACRAMENTO (AP) - A state panel that oversees loans for infrastructure has voted to stop financing nearly all construction projects in California.

The three-member Pooled Money Investment Board voted Wednesday
to halt nearly $4 billion in loans for almost 2,000 infrastructure projects throughout the state - everything from highway improvements to new schools.

The board says the Legislature's failure to address California's massive budget deficit, as well as the frozen credit market, forced them to take the unprecedented action.

State Treasurer Bill Lockyer, who heads the board, warned lawmakers of the possible move last week if they didn't act immediately to close a $14 billion budget gap for the current fiscal year. California is expected to run out of operating cash as soon as February.

(Copyright 2008 by The Associated Press. All Rights Reserved.)