California tax refunds to be delayed starting Feb. 1; state running out of money

[DeepModem Mom]

Source: AP

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.


Read more: http://apnews.myway.com/article/20090116/D95OF36O0.html

[BlooInBloo]

1. Was just gonna post "California Is Broke!"

You beat me to it. :(

[Hannah Bell]

16. Only if you consider yourself "broke" when you make $50K/year & have to borrow $1000.

[customerserviceguy]

2. Some advice to CA taxpayers

Tell the state you want to apply that refund to 2008 taxes, then claim more withholding allowances to get it back throughout the year. And don't get overwithheld again!

[machI]

3. More advice for CA taxpayers

Don't vote for Republican Governors.

[shanti]

6. idiots, they were

i sure as hell didn't vote for him, but know some people that did. the reasons they gave were astounding!

[llmart]

25. Yep...

My cousin in San Francisco, who rarely votes, thought it would be so "funny" to have Arnie as their governor. She voted for him. But then again, she was a druggie in the Haight district in the 60's:)

[naaman fletcher]

4. This is really dumb..

everyone is going to respond to this by under-witholding, with will make the problem even worse.

[ProgressiveProfessor]

14. Exactly what I do

I have minimal withholding and pay estimated. I track it fairly closely and CA owes me a $5 refund.

[shanti]

5. AND SSI, AND CAL GRANTS

:(

[LeftyMom]

7. Delay payments for student aid? That's okay, I didn't need to pay my rent anyhow.

Fuck.

[BlooInBloo]

8. They saw this coming....

http://www.huffingtonpost.com/2008/12/23/california-broke-state-co_n_153022.html

[CountAllVotes]

9. delayed?

I was sent a letter saying that I would not be receiving my low-income property tax refund this year. It said it was due to "budgetary reasons". It also said to check back later in the year.

Another $300+ gone ...

There went that tax stimulus X100. :grr:

[Rage for Order]

10. How bad is it?

Check this out

http://www.mercurynews.com/breakingnews/ci_11464525?nclick_check=1

If Gov. Arnold Schwarzenegger were to fire every employee in state government tomorrow, it would easily patch California's enormous deficit, right? Not even close.

But surely shutting down all state prisons would do the trick? That, too, would only get him about a quarter of the way there.

Now what if he were to close every prison and cut off funding for health care and other services for the poor? Now we're in the ballpark.

Payroll for California's roughly 230,000 civil servants tallies a mere $18 billion — not including legislative aides or people who work for the state's courts or university systems. (Those 149,000 additional folks aren't under the governor's control, but even if Schwarzenegger could fire them, their salaries wouldn't be enough to patch the $40 billion deficit.)

California's shortfall is larger than the entire yearly budget of every other state except New York. It exceeds the gross domestic product of more than 100 countries, including Syria, Costa Rica and Kenya.Closer to home, it's 40 times the size of San Jose's general operating fund, which pays for most of the city's basic services. And it's a devilish 666 times the size of San Jose's projected deficit of more than $60 million in the fiscal year that begins July 1.

In non-government terms, $40 billion would buy about 78,000 houses in Santa Clara County at the Nov. 2008 median price of $515,000. That's almost half of all of San Jose's single family homes.

It's also $3 billion more than the combined net worth of Google co-founders Sergey Brin and Larry Page, according to Forbes. And $40 billion could purchase more than 500 Boeing 737-800s.

[AndyTiedye]

11. When Davis Was Governor We Had a Surplus

[Rage for Order]

12. Well, yes and no

http://en.wikipedia.org/wiki/Grey_Davis#Budget_crisis

While California's economy was expanding, California was producing record budget surpluses under Davis even after his tax cuts and new spending. According to the California Department of Finance, California had a 10% surplus at the end of 1999 and California was projected to have a 4% surplus at the end fiscal year 2000. These surplus monies were left in the treasury. Davis claimed to be cautious with state finances.

Then, the dot-com boom that had been fueling California's record tax revenues burst unexpectedly because of the large number of high tech firms in California and California's dependence on state income taxes. Because of the loss of state revenue associated with Proposition 13, California became more dependent on state income taxes. When the dot-com boom turned to bust, state revenues fell while ongoing spending commitments created deficits. Restoring the licensing fees to pre tax cut levels to close the budget gap and stabilize the state's credit rating became unpopular. The beginning shortfall for the 2002-2003 state budget was $23.6 billion. Davis announced that the 2003-2004 budget shortfall would be $34.6 billion while the Legislative Analyist projected a $21.1.

[ProgressiveProfessor]

21. Concur

Not sure how much of this is the current gov's fault. Much of the economic issues are driven from the national level. Prop 13 and the Gann Initiative (requirement for super majorities) are the prime culprits in CA

[Hannah Bell]

24. If they're not sending checks to the sick, disabled & aged, it's ALL

their fault, because, as is obvious from the quote on Davis, they knew this was coming, & should have rescinded the car tax thing or whatever to cover it.

It's 2.3% of state GDP: Equivalent to me being short $1000 when I make $50K.

It's only a "crisis" because someone wants to make it a crisis, & someone apparently does.

[Hannah Bell]

15. Or, to put it in less scare-mongering terms, it's 2.3% of Cali's GDP.

"California is responsible for 13% of the United States' gross domestic product (GDP). The state's GDP is at about $1.7 trillion (as of 2006).

The GDP increased at an annual rate of 3.1% in the first quarter of 2005.<7>"

http://en.wikipedia.org/wiki/Economy_of_California


Wow, having to borrow 2.3% of your yearly income, what a big catastrophe. If I made 50K, it would mean I'd be in hock for $1000. But no, better to starve people.



Budget for 2009 = 143 billion, deficit = 27.9% of that.

http://www.medicalnewstoday.com/articles/123135.php


On edit: that means the entire state budget is 8.4% of GDP.

My first hypothesis, if arnold's not sending out social services checks, arnold's motive is to destroy social services, because california can damn well afford them.

[Zynx]

20. That's very large for a state budget. States can only tax so much for competitive reasons.

If a state is significantly out of whack with other states there are competitive issues that arise.

[Hannah Bell]

22. California is the world's 8th-biggest economy. Its taxation isn't out of line with its income.

it also has 11% of the us population, the most populous state.

arnold & his backers have an agenda.

[shanti]

23. yes

their agenda was to end and cover up the enron fiasco. that mf'er pete wilson is still in office, imo.

[Hannah Bell]

17. Cali's economy = 8th biggest in the world, so big deal if its deficit is bigger than GDPs of poorer,

smaller countries.

That would mean those countries' GDP would be less than 2% of California's GDP.

This article is selling fear.

When the powers that be sell fear, they're getting ready to push you into agreeing to something that will not be good for you.

[KakistocracyHater]

13. decapitate ceo position-take all money they'd been paid

freeze outgoing money, don't let it leave the state. Get rid of middle management-the ones who do not DO & who do not know what to do except piss all over the oa 1 oa2 etc.

[Hannah Bell]

18. Bush's Role in State Fiscal Crises

by Robert Kuttner

THE STATES ARE facing their worst budget crisis since the Great Depression. They face a collective deficit of about $100 billion...Two things are remarkable about this crisis. First, the national government, which is substantially implicated, is getting away almost scot-free. The fallout is hitting mainly governors, mayors, and state legislators, while the cuts are hitting citizens. Washington is AWOL.

Second, the cause of the state fiscal crisis is widely misunderstood. To read the conservative press, you would think that states had gone on a spending spree in the 1990s. One of Bush's close allies, conservative political strategist Grover Norquist, has positively gloated about the states' plight. ''I hope a state goes bankrupt,'' he told The New York Times, suggesting an object lesson to other states to rein in their big-spending ways...

In past state fiscal crises Washington has helped in a variety of ways -- with emergency revenue sharing, extended unemployment benefits, public works projects, and increased aid to specific sectors such as education and health. This time, Washington -- which is to say George W. Bush -- has made things worse for the states in several respects...

http://www.commondreams.org/cgi-bin/print.cgi?file=/views03/0430-02.htm

[pinniped]

19. This musclehead puke said he owns a business and knows how to run a business.

This fucker couldn't even run a lemonade stand.

edit: I'm referring to the pukinator.