California Is Officially Broke

[tekisui]

Source: KHTS

Since legislators have yet to produce a solution to California's $42 billion dollar budget deficit, state money has now completely stopped flowing outward.

Declaring itself officially broke, the state government will begin issuing IOU's instead of check for grants, schools and any other organization or program which was previously receiving funding. Additionally, your California income tax refund check this year will not be sent out until after a balanced budget is passed. Those who have already filed their taxes will get an announcement noting the delay.

Schools will feel a great deal of pain, as the state has been forced to hold back on $13 million in college funding through the Cal Grants program, according to the Chronicle of Higher Education. While state universities might have alternative funds to draw from, the pinch is likely to affect community college students the most.

They've been at it for months, but last week Governor Arnold Schwarzenegger claimed that legislative leaders are getting closer to a comprehensive plan to fix the budget deficit and get the state rolling again.

"I see the will during the negotiations even though these are very, very tough things that we talk about, where we go into areas that we have never, ever dreamt of going into and trying to solve," he said. "So you will be very surprised when the whole thing is done. We're still not there yet. There is still a lot of work that needs to be done but we are moving slowly forward with this process."

The Governor's plans involve a mix of spending cuts and a temporary sales tax increase, along with streamlining some of the state government's processes. Republicans have vowed to oppose any tax hikes, and Democrats have put up several budgets, each one failing to get the 2/3 majority vote in the legislature.

more: http://www.hometownstation.com/local-news/california-budget-crisis-2009-02-02-01-20.html

[cherish44]

1. Karma is catching up to them for the Prop 8 vote

nt

[MNDemNY]

4. Careful, you don't want to sound too much like Robinson.

[driver8]

15. Oh yeah? What about the karma for those of us who voted against Prop 8?

I guess we deserve to get fucked, too, eh?

[goclark]

20. We sure should be able to get our money under that logic nt

[QueenOfCalifornia]

16. Oh holy shit....

Do you also see aborted fetuses in satellite imagery of Hurricanes?

I am guessing the comment is flippant but come on,,, karma?

[SidneyCarton]

28. Oh bullshit.

Then Karma is a bastard to 48% of Californians who voted against it. Your sense of justice is appalling, I suppose that Katrina was the result of New Orleans' Sins as well?

[AntiFascist]

42. California should start taxing the mega-churches...

that would make up for the deficit really fast.

[Autumn]

2. IOU's ? that has to be a fucking joke

I wonder how pissed off people are going are going to be. Amazing what these Republicans have done.

[slackmaster]

13. Republicans aren't in power, and it's not Republicans the people will be pissed off at

I know it's standard procedure on this forum to blame everything on Republicans, but they're not the ones responsible for California's spending problem.

We pay just about the highest taxes of anyone in the USA, but somehow our 2/3 Democratic legislature can't balance the budget.

[Autumn]

19. Isn't Arnold a Republican and California

was in hot water before President Obama got elected wasn't it? I was not aware that you had a 2/3 Democratic legislature. Sorry. That sucks.

[Johonny]

27. Nope I'm pissed at Rethugs

We require a super majority, so even almost 2/3 is not enough to pass a balanced budget. It's their governor that promised to fix this. It's their state legislature that's holding up tax increases for years. It's their stupid props that require a super majority (so a small amount of legislature can hand string the whole budget process) that is crippling the state. The whole thing is Republicans fault. And it's their sorry asses that put Bush in power and let him cripple our nation.

[slackmaster]

30. I think our taxes are high enough now

The problem is that the legislature squandered the surplus during the years when we had one.

[Johonny]

35. ?

It's easy to run a state when the economy is good. It's hard to run a state when the economy is bad. The 2/3 super majority has placed the state in a position where it must collected taxes stupidly, with no real solution to the problem. California thus has a terrible tax base. This basically insures when certain parts of the economy do well it will have a huge surplus, when the economy does bad it will have huge short falls. California needs to end the super majority rules and allow the legislature move to a tax system that is simply more sound. This was basically the economic advice that the state has been getting forever, but simply has no way to fix it. The 2/3 super majority hurts the California tax payer.

[slackmaster]

36. Yes, but our legislature didn't get it right when the economy was good

When you have a surplus, spending it all is not the smart way to go.

The 2/3 super majority hurts the California tax payer.

We the taxpayers decided that the out-of-control tax increases we had before we voted in the 2/3 majority hurt us worse.

[QueenOfCalifornia]

18. As a person

whose husband filed our tax return last week, knowing we will not get paid, I can say that we are not feeling the love. I wonder how the State would feel, if in April we give them an IOU for our property tax? :eyes:

[Autumn]

21. Maybe that is what needs to be done.

If they can use IOU's it only seems fair tax payers can do it. This just blows me away.

[MUAD_DIB]

31. I'm sure that in the case of your property tax IOU that the

state would have enough in its funding to send a few lawyers out to see you.


Sorry to hear about what is going on there.

[slackmaster]

33. Property taxes are paid to counties and municipalities here

I'm quite sure the San Diego County Tax Assessor would not appreciate getting an IOU, even with the state's seal on it.

[AngryAmish]

3. Illinois will be joining them shortly

[tekisui]

5. No doubt many other states are sure to follow.

:-(

[madrchsod]

7. we are`t that bad off ....yet

[AngryAmish]

26. We have the worst pension problem in the nation

It is that bad. Problem is Blago has kept the figures to himself so we have no true idea right now.



I think we are about 60 billion dollars short of where we should be. It is the systematic theft from the taxpayers to those with political power. To appease the unions (who have incredible power) incredible pension problems have been made. Which is fine, the unions can bargain for whatever they can get. But it is coming due and with the wave of Baby Boomer retirements coming those of us left behind are left holding the bag. Look for the income tax to increase by 40%. Mark my words.

If someone retires with a $55,000 annual pension at age 55 (assuming a life expectancy of 28 years (one goes with the female life expectancy since retirees are either female or widows get the pension) that is $1,540,000 in cash (not reduced to present value). Assume healthcare and each retiree gets over $2,000,000 and are not producing anything for the state. This was negotiated but I don't think that the future interests of Illinois' were well contemplated in the past.

We did this to ourselves.

[madrchsod]

40. i forgot about the state pension system..

my wife was in the running for a state job...the benefits were amazing and retirement is very generous to say the least.

[madrchsod]

6. sales tax--the most regressive tax there is

the politicians won`t touch those multi million dollar homes of their cash cows...

[Horse with no Name]

8. So where is the impeachment of the republican governator?

Or do they save those solely for Democrats?

And OF COURSE the republicans are blocking everything EXCEPT tax cuts.
Those idiot mother-fuckers haven't realized that you can't keep giving away your piggybank when you overdraw your checking account.

[elizfeelinggreat]

10. I'm wondering this also

aren't we all tired of the MSM pushing tax cuts?

[slackmaster]

23. Nobody in the MSM or even the legislature is talking about cutting taxes in California

I don't know what you are referring to.

[Lebam in LA]

9. Guess I got my refund check just in time

[KansDem]

11. Yet, one day in Iraq costs Americans $720 million...

YouYube--One Day = $720 Million

...the state has been forced to hold back on $13 million in college funding

One day, 24 hours = 1440 minutes

One minute of the Iraqi War = $500,000

13 million / $500,000 = 26

California's college funding problem could be taken care of in 26 minutes...

[slackmaster]

12. So, can I use the IOU I'll get for a refund to pay my estimated tax payment?

:argh:

[customerserviceguy]

25. You might be able to file an amended return

to ask them to apply the 2008 refund to 2009 taxes. That would be completely legal.

[slackmaster]

32. I haven't filed yet, and your idea about applying the 2008 refund to 2009 taxes makes a lot of sense

I'm expecting to get roughly $300 back from the state for 2008.

Since the refund is likely to be worthless scrip, and I can live without it anyway, I could just plow it into my 2009 taxes, increase my state exemptions by one, and see slightly higher take-home pay for the rest of the year.

I'll bring it up with my accountant when I sit down to do my taxes, probably early March.

Thanks!!!

[customerserviceguy]

44. You're welcome!

I used to be a tax accountant in the 80's. And I hate overwithholding!

[Mari333]

14. yay now they join us in Michigan

we have been broke for years.

[NightWatcher]

17. what happens in CA happens to the rest of us within two years

[book_worm]

22. So why isn't there a movement to have Arnold recalled? certainly things are worse than when Davis

was Governor.

[NV Whino]

29. Recalls cost money

And Arnold has a term limit.

[underpants]

24. 6th largest economy in the world

:scared:

[Javaman]

34. I'm sure those californians that voted to recall Gray Davis are over joyed

with their decision.

Davis was set up by enron to put in a repuke stooge in the form of the moron-ator.

well played repukes, well played. :eyes:

Think there will ever be another repuke governor in California in our lifetimes?

[closeupready]

38. If he looks good and is a well-known actor, maybe.

n/t

[Cleita]

39. I think that recall petition was cooked. Darryl Issa paid people to get

signatures and a woman I know said that she signed a petition by the same petition collectors against the recall. In other words, if you didn't want to sign the petition for the recall, they had another one you could sign against the recall. I would like to see a forensic investigation of this sometimes if they already aren't in the shredder. Anyway I don't consider Arnold any more legitimate than Bush. They got where they got through trickery by RNC operatives.

[TornadoTN]

37. As it stands, they could use all of the tax money cabinet nominees have failed to pay to stay afloat

Seriously, this is just pathetic on all levels.

[EmeraldCityGrl]

41. A state like California with such abundant resources failing is due to

pure incompetence and mismanagement and greed. Fertile land, miles of shore land, ports, tourism, all of it.

[davidpdx]

43. My sister lives there and says things are bad

she has a low paying job, health problems and relies on state programs for her medications. She's finding it harder to get them because of the budget cuts.