California on the ropes after blowing budget deadline

July 1, 2009

California takes a step closer to issuing IOUs instead of cash to a host of folks, including local governments and private businesses, as the state failed to agree on a budget by Tuesday’s deadline.

The impasse also means the state’s budget gap for the 2009 and 2010 is getting wider, and the political blow-back much fiercer since taxpayers will be the first to feel the sting of an IOU.

From the Sacromento Bee:

Schwarzenegger plans to declare a new state of fiscal emergency today, launch another special session and propose additional program cuts to solve the larger deficit problem, spokesman Aaron McLear said. The new deficit number will be roughly $26.3 billion, about $2 billion higher than the governor’s May budget, according to Schwarzenegger’s Department of Finance…

Absent a significant budget deal today, state Controller John Chiang has warned he must take the next step of issuing IOUs on Thursday to vendors who do business with the state, local governments and people who are owed tax refunds. Chiang said IOUs are necessary to preserve enough cash to meet constitutionally mandated obligations to schools and state bondholders in July.

Hallye Jordan, a Chiang spokeswoman, said the first batch to go out would consist of 28,742 IOUs, worth a total of $53.3 million, to taxpayers awaiting refunds.


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As California faces this issue, the entire nation must also…

As a California born senior citizen, taxpayer and constituent, this is a shame on the government leaders. Immigration, legal and illegal plus transplants from other states have been draining social services and the states SSI and Medi-Cal program for years.
Targeting low-income seniors, children and the disabled shows what a bully legislation can do. The Peoples Governor. hah….We need a whole new set of lawmakers and a new state controller. John Chiang saw this coming as they all did but stil grabbed hold of their 6 digit salaries and benefits. Now is the time for the Obama administration to step in and save his people!

Posted by Janice | Report as abusive

Hallye Jordan, a Chiang spokeswoman, said the first batch to go out would consist of 28,742 IOUs, worth a total of $53.3 million, to taxpayers awaiting refunds.
If my tax refund check was being withheld because the state needed to focus the money on illegal immigrant welfare and medical programs, I would completely lose it. At minimum, I will make sure to lower my state tax contribution to the lowest percent possible so that I would owe state tax money this year. Actual taxpayers are the last ones that should be receiving IOUs. This cannot end well.

Posted by Steve | Report as abusive

It seems CA state employment COULD BE CUT it is akin to welfare. None of them are able to justify their existence by claiming they are actually needed at work. Instead they all justify their employment by stating that without a job they will be poor and a bigger drain on society.

At the end of the day they are basically saying “If you don’t continue to pay me for doing nothing then you’ll be forced to pay me for doing nothing.”

Posted by Steve | Report as abusive

“As California faces this issue, the entire nation must also…”

Why is that Mike? The rest of the country wasn’t stupid, Cali was. Why should one parasite bring down the whole of the nation?

As the oldest California bank owned, operated and serving the Latino communities of Los Angeles and Santa Ana, Pan American Bank decided yesterday to fully honor its customer’s presentation of warrants (IOUs). Pan American Bank for over 40 years has supported the working class Latino. We have a duty to meet the needs of our communities which have given us the opportunity to thrive for four decades.

Jesse Torres
President and CEO
Pan American Bank
3625 East First Street
Los Angeles, CA 90063
(323) 264-3310 los-angeles-bank-to-honor-california-iou s,880116.shtml

Nice ad Pan Am Bank. But so do most other banks. And they did back in 1992. You aren’t doing anything special for anyone. Supporting the working class is easy, nothing special. Try supporting the non-working class as the tax-payers have to.

Posted by steve | Report as abusive