Thread: CA. Controller to suspend welfare checks

Controller to Delay Certain Payments for 30 Days
To Preserve Cash for Schools and Other Legally Protected Expenditures


Stack of Controller's payment envelopes

As State Controller, John Chiang is responsible for ensuring the State has sufficient funds to meet its financial obligations.

With no signs of an economic recovery in sight, it is critical that the Governor and the Legislature enact a sound budget solution that provides much-needed cash by February 1. If not, the State will be $346 million in the red at the end of February, and $5.2 billion in the red in April.

In order to preserve cash for education, debt service and other payments that are deemed by the State Constitution, federal law or court rulings as having first claim to available General Fund cash, the Controller announced he will begin delaying, for 30 days, payments to all other programs that are funded out of the State’s depleted General Fund.

Those payments that will be delayed include thousands of payments to businesses for services and products they provide to the State; to assistance for more than a million aged, blind and disabled Californians that goes to pay their rent, utilities, or put food on their tables; to State agencies that use the payments to fund critical public services, ranging from public safety to health and welfare.

Chart illustrating how 30-day payment delays would improve California's cash outlook to make legally required payments

The delay in payments also will apply to tax refunds that millions of individuals and businesses have earned, expect and deserve. Not only will the 30-day delay in refund payments cause significant financial harm to California families, it will delay the economic stimulus expected from consumer spending. Postponing the payment of tax refunds also will ultimately cost the state tens of millions of dollars in interest payments if those payments are postponed beyond the date prescribed by law.

If the Governor and Legislature fail to provide real and adequate solutions by late February, the Controller said he will be forced to postpone those payments for another 30 days.

Below is information regarding which legally protected payments will continue to be paid, what payments will be delayed, frequently asked questions, and the text of a letter from the Controller to Legislators.
http://www.sco.ca.gov/eo/fiscalissues/p ... 009a.shtml

Originally Posted by JohnDoe2

Originally Posted by Justthatguy

There's no $42 billion dollar deficit in the first place. It's a projection. The real deficit is more like 7 to 8 billion. But it will get larger if nothing is done. The Calif State government has 6 to 7 billion setting around in funds not being used. Why are the politicians throwing out this 42 figure? Because they want more money for the unions and pet businesses that get large contracts and raises, etc.

JohnDoe2 Said:
People can live, and plan, paycheck to paycheck, but states can't. States must plan a year or two ahead, especially a state as big as California. If they don't have a solution for the problems they foresee in the next two years they must state the problem as it is. Just saying it isn't real won't make it go away.

Justthatguy:
The current deficit is between 7 to 8 billion. The politicians can make the current deficit go away by using the 6 to 7 billion they have setting around in funds and making some cuts. The deficit isn't "real" until the money is actually spent. Real means reality not a projection.