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California Budget Impasse Enters Fourth Month; IOU Option Looms
Business Week ^ | 10/02/2010 | Michael Marois

Posted on 10/02/2010 2:09:58 PM PDT by SeekAndFind

California’s longest budget impasse entered its fourth month today as Governor Arnold Schwarzenegger and top lawmakers wrestled over pensions and corporate taxes to close a $19.1 billion deficit.

Reining in state retirement costs and providing tax breaks for businesses remain sticking points, aides said as legislative leaders emerged from a four-hour meeting at the Republican governor’s Sacramento office last night.

“We still have some issues that need to be resolved that are significant,” said Senate President Pro Tem Darrell Steinberg, a Democrat from Los Angeles. He said another meeting is scheduled today.

California, the largest issuer of municipal bonds in the U.S., hasn’t had a budget since the fiscal year began July 1. Controller John Chiang may decide as soon as next week on when he might begin issuing warrants, or IOUs, to conserve cash for priority bill payments such as debt service, aides said. It would mark the second year in the row he’s had to pay with scrip because of a budget impasse.

California today must pay $804 million for debt service and make a $621 million contribution to state pension funds, according to Schwarzenegger’s Finance Department. In August, budget officials decided to delay paying $2.9 billion of subsidies to schools and counties last month in order to make sure there was enough cash on hand to make payments due today.

(Excerpt) Read more at businessweek.com ...


TOPICS: Business/Economy; Culture/Society; Government; News/Current Events
KEYWORDS: budget; california; iou

1 posted on 10/02/2010 2:10:03 PM PDT by SeekAndFind
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To: SeekAndFind

But they did find time to “decriminalize” pot. LOL!!! Way to go Ahnold!


2 posted on 10/02/2010 2:14:03 PM PDT by FlingWingFlyer (Help stamp out political correctness.)
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To: SeekAndFind

In all probability about 70+ percent of California’s budget is not necessary.
Fire the damned teet suckers on the gub mint dole.


3 posted on 10/02/2010 2:27:02 PM PDT by Joe Boucher ((FUBO) Less gubmint is best gubmint.)
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To: SeekAndFind
The state is a train wreck lead by incompetent elitists. All CA has to do is 5 basic things:

(1) Send all illegals packing
(2) Completely ax two-thirds of state government departments and programs
(3) Abolish the public unions
(4) Implement a 5% flat state income tax, a 5% sales tax, a 5% business tax, and a land-value tax and watch revenues explode
(5) Allow drilling off the coast

4 posted on 10/02/2010 2:29:10 PM PDT by Extremely Extreme Extremist (The Republic of the United States of America)
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To: SeekAndFind
I'll be broke


Frowning takes 68 muscles.
Smiling takes 6.
Pulling this trigger takes 2.
I'm lazy.

5 posted on 10/02/2010 2:52:19 PM PDT by The Comedian ("Progressive" is a code word for "Pending nitrogen cycle contributor")
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To: SeekAndFind

Haven’t they done IOU’s before??

Did they ever pay those back??


6 posted on 10/02/2010 3:15:50 PM PDT by GeronL (http://libertyfic.proboards.com <--- My Fiction/ Science Fiction Board)
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To: SeekAndFind
If you do business with the state of California start demanding cash on the barrelhead. No Net-30 terms for someone threatening not to pay.

Similarly, if you normally get a tax refund from California, it is time to adjust your W-2 to zero out the taxes you pay for the rest of the year so you either owe money or pay the exact amount you owe. You won't be able to count on getting a refund check in the spring. If you can't do that, then just rollover the amount they owe you to next year's taxes and reduce what you have withheld instead of getting a near worthless warrant promsing they'll pay sometime.

7 posted on 10/02/2010 3:21:21 PM PDT by KarlInOhio (Grblb blabt unt mipt speeb!! Oot piffoo blaboo...)
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To: GeronL

RE: Haven’t they done IOU’s before??

Did they ever pay those back??


I believe they did. Ahnold went to DC cup in hand to beg for Federal money.


8 posted on 10/02/2010 7:23:43 PM PDT by SeekAndFind
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