California readies IOUs (instead of cash...)

[villager]

Source: Sacramento Bee

California readies IOUs -- legislators would be first

By Steve Wiegand

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."

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Read more: http://www.sacbee.com/topstories/story/1507830.html

[Hugin]

1. Post dating checks is illegal for the commoners...

Or, maybe not!

I should try this with my Mortgage payment! :sarcasm:

[napi21]

2. That's an interesting approach...affecting the legislators first.

It sure SHOULD be an incentive for them to do SOMETHING!

[pinto]

4. Agree. Give them the first IOU's. Though that may well end up a small bit in the list.

It's be a good message, fwiw.

[Trillo]

13. It strikes me that legislators already passed a budget,

it was the governor who said "no", so legislators and citizens are getting punished? :wtf:

[Uben]

3. An idea!.......how about we bail them out?

Yeah, that's it!

Or, sell California to the highest bidder. Way to go Ahnold! And you thought Davis was bad.

[2Design]

5. do this to the congress critters and stop their wage increases n/t

[Kajsa]

6. We need to get rid of the 2/3rds majority

needed to pass legislation in the State Senate.

I signed a petition to do just that, from
Courage Campaign but I haven't heard
anything recently about it.

As long as the minority, death before
any tax increase Repubs have our CA
Senate in a stranglehold,
our chances of having a balanced budget
are very slim.

[Hawkeye-X]

7. Didn't they do those IOU's a few years ago?

almost 20 years ago - I remember reading this headline 20 fucking years ago. Who was governor back then?

[shanti]

9. pete wilson

and yes, it's been done before.

[LeftyMom]

10. Early 90's. Under Wilson, I think,

I remember my Dad getting paid with one (he worked for the Dept. of Corrections back in those days) and that his bank would cash them, but only at 90% of face value, which was apparently the going rate. So he either had to live on savings until the state passed a budget or effectively take a ten percent pay cut. Here in Sacramento times were already pretty lean because of the general state of the economy and some local stuff like base closures, and trouble with the largest and most reliable local employer certainly did not help.

[shanti]

8. poor john chiang

http://www.sacbee.com/static/weblogs/the_state_worker/2008/12/controller-chiang-in-texas-hos.html?mi_atom=The%20State%20Worker

the stress of this mess must be getting to him :(

[YvonneCa]

12. He has been standing up for the...

...people on this. I hope he is okay.

[Skink]

11. Arnold's an economic girlie man.

get the recall drive started.

[shanti]

15. we can't afford it now

:shrug: what harm can he do in 18 months :sarcasm:

[Juneboarder]

14. 2 Questions

1. If I owe money to the Franchise Tax Board rather than them owing me money, then can I send them an IOU note in lieu of actual money?

2. If the FTB issues an IOU, can the taxpayer charge them penalties and interest?

I'm sorry, but Arnold needs to go! This is pure BS!!:mad: