Thread: California readies IOUs -- legislators would be first

Wednesday, December 31, 2008 sacbee.com Web
State Controller John Chiang said people awaiting state income tax refunds would be second in line to receive the IOUs.


Popular Comment
California is enough to give anyone chest pains. This state is a mess. Not every state in the union is this screwed up, however that is because they aren't living in some artificial Utopian dream land that can not be. I love California, I hate that Californian's can't look past the "D's" and "R's" next to a persons name and vote in fiscally conservative leaders instead of selfless politicians. There are plenty of fiscally conservative democrats but they can't get elected because people want more and more not less from the government.

-- thepaintman80


California readies IOUs -- legislators would be first
By Steve Wiegand
swiegand@sacbee.com
Published: Wednesday, Dec. 31, 2008 | Page 3A

State Controller John Chiang warned Tuesday that the first group to get hit in the wallet by California's budget debacle is likely to include legislators – and it could happen as early as Feb. 1.

The bad news is that next in line to get IOUs instead of cash would be Californians awaiting state income tax refunds and companies that do business with the state.

In a letter to state agencies, Chiang said his office was projecting the state would run out of cash around the beginning of March.

Without a deficit-closing deal between legislators and Gov. Arnold Schwarzenegger, Chiang said, his office "has no choice but to pursue the deferral of potentially billions of dollars in payments and/or the issuance of individual registered warrants, commonly referred to as IOUs."

The controller advised state agencies to rework their accounting systems now to take people and firms paid by direct deposits and eligible to be paid with IOUs off the systems, because the warrants must be issued on paper.

Chiang spokeswoman Hallye Jordan said that whether IOUs would be needed – and how many – would depend on several factors, including how fast the governor and lawmakers can reach a deal and how much the state collects in tax revenues in December.

Jordan said the first group to get IOUs would be the state's 1,700 elected officials and their staffs. That number includes constitutional officers, legislators and judges.

"But we may also have to defer or use IOUs to pay tax refunds," Jordan said. "That's a big concern, because that doesn't help restart the economy if we don't have the money in people's pockets."

Some groups and programs, such as education and state workers, cannot legally be paid with IOUs. That leaves tax refunds, elected officials and firms that sell goods and services to the state.

"It's better that than not paying IHHS (In-Home Supportive Services) workers or the disabled, blind and elderly," Jordan said. "But we may not have to go this horrible, dangerous route if the governor and the Legislature can come up with some agreement."

Spokesmen for legislative leaders and the governor said that while negotiations were ongoing, meetings Tuesday were confined to staff members.

The governor is constitutionally obligated to present a balanced budget proposal by Jan. 10.

Aides to Schwarzenegger said Monday the administration is preparing a plan that would cover the entire $40 billion deficit in case a deal to close at least part of it can't be made before then.

The letter was sent as Chiang was in a Fort Worth hospital. The 46-year-old controller suffered chest pains Friday and was admitted for tests. Jordan said he is scheduled to be released by the end of the week.


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Call Steve Wiegand, Bee Capitol Bureau, (916) 321-1076.
http://www.sacbee.com/capitolandcalifor ... 07830.html

The bad news is that next in line to get IOUs instead of cash would be Californians awaiting state income tax refunds and companies that do business with the state.



Oh now isn't this just wonderful?

Screw the taxpayer out of refunds and businesses out of their pay.

But, whatever you do, DON'T dare touch any of the funds being used to finance all of the food stamps, welfare, medical, day care, housing, etc. being shelled out hand over fist to illegal aliens and their anchors.

Well, I think CA may have finally gone and screwed themselves right into the ground with this one.

How many companies are going to continue to do business with, and inside of, CA without being paid?

How many tax paying American citizens are going to bother even filing their taxes?

What a freaking mess.

Unfortunately with an Obama Bin Laden administration this will happen in the remaining 49 states too. Obama says he will scour the budget for wasteful spending but he WILL ignore the 400 billion dollars annually spent on illegal alien health care, welfare, food stamps, education, housing assistance, low income energy assistance and other benefits not including the massive fraud perpetrated by illegal aliens receiving multiple benefit payments in different locations using multiple stolen social security numbers with the total cost rising as the borders remain open allowing an additional 5,000 to 10,000 to illegally cross the border every week.. Add to that a trillion dollar economic stimulus financed by struggling Americans losing their homes, jobs, pensions and health care which will provide jobs and benefits for illegal aliens as evidenced by bailout money going to banks that provided subprime mortgages and other lines of credit to illegal aliens who defaulted on their loans which was a major factor in the housing and credit crashes. Yet the very same banks responsible for this mess who taxpayers bailed out because of irresponsible lending practices to illegal aliens applying for mortgages and other loans with no documentation, little documentation or fraudulent documentation with stolen social security numbers want to give more loans to illegal aliens providing only a matricula consular card which the Mexican government doesn't recognize as a legitimate form of identification. This "government" will do what it takes to destroy what is left of this country for open borders, cheap labor, votes and damn the American people to hell..............

The bad news is that next in line to get IOUs instead of cash would be Californians awaiting state income tax refunds

And all the while the illegals get freebies up the ying yang. This is disgusting.

This is why you need to stop income tax with holding from your paycheck, and pay what you owe them on April 15th.

Originally Posted by Bowman

This is why you need to stop income tax with holding from your paycheck, and pay what you owe them on April 15th.

Great idea, Bowman!

Originally Posted by carolinamtnwoman

Originally Posted by Bowman

This is why you need to stop income tax with holding from your paycheck, and pay what you owe them on April 15th.

Great idea, Bowman!

YES, YES!..But as an employee, how do you get your employer to stop pulling FICA from your wages without jeopardizing your 401 and their SS contributions?

Originally Posted by Rockfish

YES, YES!..But as an employee, how do you get your employer to stop pulling FICA from your wages without jeopardizing your 401 and their SS contributions?

Unfortunately as an direct employee you cannot stop the FICA withholding, if you were a contract employee you could.