California WTF

[Parts]

California on verge of sending out IOUs instead of tax refunds

Payments may be delayed 30 days

JUDY LIN
The Associated Press

SACRAMENTO — California's controller said Friday he will be forced to impose a 30-day delay on tax refunds and some other payments starting Feb. 1 if lawmakers fail to agree on a plan to erase a nearly $42 billion budget deficit.

Controller John Chiang, who acts as the state's accountant, said he will have no choice but to delay $3.7 billion in payments next month because the state is running out of cash.

Doing so, he said, would buy the state a few more weeks before its accounts run dry. The state is on the brink of issuing IOUs as it faces a $41.6billion shortfall over the next year-and-a-half.

“Let me make this perfectly clear: This is a painful decision,” Chiang said during a news conference in Sacramento. “It is an action that is critically necessary. The fallout from issuing IOUs, or for the state going into default, are significant and long-lasting and something to be avoided at nearly all costs.”

In another budget-related development, a state investment board on Friday freed up $650million to pay construction bills for public works projects, less than a month after freezing nearly $4 billion of infrastructure spending.

A severe drop in revenue from sales, property and capital gains taxes has left the state's main bank account depleted. The state has not had a positive cash balance since July 12, 2007, Chiang said.

The state had been relying on borrowing from special funds and Wall Street investors, but those options are no longer available.

Chiang said his office must continue $6.6 billion in education and debt payments next month but will defer money for tax refunds, student aid, social services and mental health programs.

Chiang's spokeswoman, Hallye Jordan, said those who could be hurt by a payment delay include university students who qualify for state assistance under the Cal Grant program and 1.3million low-income elderly and disabled Californians who receive monthly SSI-SSP checks.

Jordan said universities that do not receive Cal Grant payments on time might be able to find ways to keep those students in school. State officials are hoping that the Social Security Administration will cover the state's share of SSI-SSP payments if they are held up, she added.

“It's just an ugly situation,” Jordan said. “All we can do at this point is urge the governor to work with the Legislature and get a good package that will not only solve the deficit but get needed cash.”

Of the $3.7 billion in delayed payments, an estimated $1.9 billion will come from personal income tax refunds and $81 million from bank and corporate tax refunds.

Under the law, the state does not have to issue tax refunds until May 30, but the state usually cuts checks as it processes returns.

Chiang said delaying tax refunds and payments to counties for supporting poor families will only exacerbate the weak economy. People will not be able to use their tax refunds to buy cars or pay bills, he said.

Paul McIntosh, executive director of the California State Association of Counties, said many counties already are low on reserves and may have to shut down welfare offices or end drug and mental health treatment programs at a time when applications are up 22 percent statewide.

IOU's you got to be kidding way to get people to start spending and make the economy better.  More likely just a power play by the politicians who want their budget passed  no matter who it hurts

[punkdrew]

 

[Parts]

They did it here a few years back closing the state parks on a holiday weekend kicking out all the people paying to camp there And having state workers stay home that gov. later went to jail for corruption

[P7PSP]

Actually Parts it's how the douchebags get re elected is to promise those who don't work that they will get paid anyhow just by blessing the rest of us with their presence. This is how the redistribution of wealth that New Labour and Lit like so much works out. Now the fucks are wondering how this  happened, it's not like they intended  to kill the golden goose.

[McGiver]

Actually Parts it's how the douchebags get re elected is to promise those who don't work that they will get paid anyhow just by blessing the rest of us with their presence. This is how the redistribution of wealth that New Labour and Lit like so much works out. Now the fucks are wondering how this  happened, it's not like they intended  to kill the golden goose.

redistribution of wealth?

not unlike bush taking from the poor and giving it to the rich....

[P7PSP]

Actually Parts it's how the douchebags get re elected is to promise those who don't work that they will get paid anyhow just by blessing the rest of us with their presence. This is how the redistribution of wealth that New Labour and Lit like so much works out. Now the fucks are wondering how this  happened, it's not like they intended  to kill the golden goose.

redistribution of wealth?

not unlike bush taking from the poor and giving it to the rich....

This link http://www.dof.ca.gov/fisa/bag/process.htm discusses the process of developing a budget for California, nowhere in the article does the title President of the USA or the name George W. Bush appear.
 This link http://www.caltax.org/member/digest/feb2001/feb01-6.htm from 2001 discusses how California has circumvented the Welfare Reform that was signed by Bill Clinton in 1996 http://tech.mit.edu/V116/N31/clinton.31w.html and things have not gotten any better since then. California's numbers have climbed while other states have seen their numbers drop.
There are other factors at work as well such as municipalities like L.A. and San Francisco flat out forbidding their Police Officers from inquiring about a suspects status as a possible illegal alien and the state giving Drivers Licenses to illegals thereby tacitly encouraging border jumping and resulting in additional expenses to the state http://www.washingtontimes.com/news/2004/dec/06/20041206-102115-6766r/, and while none of this excuses Bush's conduct in failing to secure the border and fucking up the economy it also squarely points the finger at the California State Government for their part in acting like they don't need to behave responsibly with tax dollars.

[McGiver]

are you saying that the mexicans are the problem?

[P7PSP]

are you saying that the mexicans are the problem?

What I said in this thread is in the the other two posts that I made in this thread.

[TheoK]

The Social Democrats probably get many of their votes from immigrants and white trash. I've never voted for tehm myself, even though it would benefit me in the short run.

[McGiver]

are you saying that the mexicans are the problem?

What I said in this thread is in the the other two posts that I made in this thread.

that requires extra effort on my part.  i dont have time to catch up