California Tax Refunds To Be Delayed
The state of California, the 9th largest economy in the world, is having liquidity issues of its own. Faced with a shortfall in taxes, it under-budgeted by nearly $42 billion. The government said it will have to delay issuing tax refunds. In fact, according to Governator Arnold Schwarzenegger, the state could run out of cash by February.
According to the AP News:
If you found this post helpful, consider donating to my coffee fund!California’s controller says he will begin a 30-day delay on tax refunds and other payments starting Feb. 1 because the state is running out of money.
Controller John Chiang said Friday he must delay $3.7 billion in payments next month because lawmakers have failed to address California’s growing deficit.
With a $41.6 billion shortfall over the next year-and-a-half, the state is on the brink of issuing IOUs.
Chiang says his office must continue education and debt payments but will defer money for tax refunds, student aid, social services and mental health programs.
A severe drop in revenue has left the state’s main bank account depleted. The state had been relying on borrowing from special funds and Wall Street investors; those options are no longer available.
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January 17th, 2009 at 1:02 am
As a resident of California all my life it really pisses me off to see this. Where in the hell did all that money go? I think that is the problem, we don’t get to choose where it goes.
January 17th, 2009 at 11:19 am
You get what you vote for….
January 17th, 2009 at 11:34 am
Pretty much, but a lot of things we don’t get to vote on at all..
January 17th, 2009 at 5:07 pm
My comment was about WHO we vote in to office. While each citizen doesn’t get to vote on any specific bill, or decide on which bills are signed into law, voters DO get to vote on who they feel is the candidate that will best serve their interests. And looking at both the executive and legislative branches over the past 20 years,it’s not hard to figure out why we are in the shape we are in. And for those who voted for and expect change, the campaign promises are already history, and the inauguration hasn’t even taken place.
I’m not from California, so I’ll speak more on a national level. If you look at all of the pork-laden bills that got signed into law, the massive overgrowth of already established entitlement programs that both the Democrats AND the Republicans have contributed to, etc. etc. etc., it’s not hard to see why we are in the shape we’re in.
The simple solutions, although they’ll never happen, are twofold: line item veto power to the President, and term limits for Congress.
January 18th, 2009 at 7:44 am
This is one more example of why you should not overpay your taxs but change your witholding and put more of your money in your pocket every payday.
It’s not a shortage of taxes, it a overwillingness to spend and continue to spend on programs that are not working.
January 18th, 2009 at 2:10 pm
Well said, it’s kind of sad how our system works. I think that we should have less government overall and we need to start acting more efficiently. Seeing how China and other countries are starting to industrialize we may no longer be the super power of the world. I think that may not be that bad of a thing.
Do you think that if lose that power that stronger countries would start messing with us because of our history?
January 19th, 2009 at 1:15 pm
[...] is running out of cash. Yields on California Municipal Bonds are therefore pretty high right now. But is it safe to buy [...]
January 19th, 2009 at 3:48 pm
California will not go under so California General Obligation bonds will be safe. However the same can not be said for other municipals and special bond issues by special districts.
I am a life long California resident. The Governor came into office a promising to rollback the DMV auto registration fees that had been increased and the Natural gas manipulation by Enron and others. If the DMV fees were keep intact we would have a much less severe deficit. Now he wants to go back and increase the DMV fees.
Many people complain about their representatives but when asked who their state assemblyperson or state senator they do not know.