Posted on 06/25/2009 12:00:13 PM PDT by tflabo
California's controller said on Wednesday that he would have to issue IOUs in a week if lawmakers can't quickly solve a $24 billion budget deficit, and the state's treasurer plans to tap a reserve fund to meet debt service costs.
(Excerpt) Read more at reuters.com ...
Seems like it was in the 70's...might have been a county or municipal government, not the state...but it was CA, iirc.
Sorry to say it, but I really hope the State CRASHES. Let them issue IOU’s, let suppliers stop suppyling them, let California’s creditors force them into bankruptcy, let workers and teachers go unpaid, Let the cops leave their jobs, etc...
Like an alcoholic, they can only change when they hit rock-bottom.
Illinois is going to be in the same boat soon. I wonder how many directors of multicultural this and outreach directors of that our states have. How much money would we save by axing those positions?
We are looking at cuts in some services to the elderly and severally disabled by as much as 50%. This is going to be a nightmare.
...after all, you're just following the "leadership"....
The banks had better not honor the “IOU”s or warrants as they are called. CA will go bankrupt and the banks will be left holding the bag.
Does that mean IOU holders can charge 32% or higher interest?
Calipornia is going to rack up some dandy credit card bills. Think they’ll ever pay them off?
Me either.
Agree. Also wonder how many freeloading “arts” programs are still being funded.
I agree with you. Let the bad stuff happen. It’s the only way for folks to see what socialism leads to.
Hopefully we’ll get the rest of the country squared away before it happens anywhere else.
My city just passed a $50,000 “grant” to save one. Just nuts, plain stupid.
Sorry to say it, but I really hope the State CRASHES. Let them issue IOU’s, let suppliers stop suppyling them, let California’s creditors force them into bankruptcy, let workers and teachers go unpaid, Let the cops leave their jobs, etc...
Like an alcoholic, they can only change when they hit rock-bottom.
Yes - agreed!
The tax payer should do the same thing. Give them an IOU on their taxes. If it’s legal for the State, it’s legal for the people of the State.
Look for legalizing and taxing marijuana; later prostitution. Why let Vegas have all the fun?
After that, means tests will be applied to state retirements. Copays will skyrocket.
It’s going to get ugly or it is going to collapse.
Hussein already owns Kalifornia, so what can it offer him for a federal bailout?
They wish it was that "low."
Dan Walters: Big costs loom for state beyond deficit
Sacramento Bee | 5/19/09
FR Posted on Tuesday, May 19, 2009 by SmithL
When the governor and legislators talk about balancing the state budget, they're talking about closing the gap between revenues and required expenditures, either by increasing the former or reducing the latter. The task becomes more difficult by the minute.
Looming on the not-too-distant horizon, however, are some other huge obligations that the current crop of elected officeholders has chosen to ignore, because acknowledging them would make closing the chronic budget gap just that much harder.
There is, for example, a potentially huge increase in the "contribution" that the state must make to the California Public Employees' Retirement System to cover public pensions.
CalPERS has seen its once-immense investment portfolio shrink dramatically, due to recession and some truly boneheaded investments, such as a $1 billion haircut on raw land in Southern California. Big increases in pension benefits, enacted a decade ago, are also a factor.
CalPERS won't tell the state how much its boost will be until sometime next year, but it could be hefty, unless CalPERS postpones the pain by stretching out the bite over several years – which would merely postpone the pain. An even bigger headache is a new requirement that state and local governments identify and quantify their obligations for providing health care to their retired employees. The state auditor's office and an advisory commission told the state two years ago that its unfunded liability for health care is $48 billion.
State officials were advised to commit $3.73 billion during the current fiscal year to begin shrinking the unfunded liability, but the state is paying just $1.36 billion to cover its current costs. The Legislature, under the sway of unions, rejected Gov. Arnold Schwarzenegger's plan to overhaul employee health care to save money, but he's trying again, seeking to increase the amount of time it takes...(Excerpt) Read more at sacbee.com ...
It was the State which issued them but I believe it was in 92 or 93. First month most banks were willing to cash them. Second month...not so much.
State issued twice before, 1982 & 1992. IIRC in 1982 the IOUs were issued and paid back in the same day.
In 1992, $4 billion in IOUs were issued in July and paid back with interest in September.
Don’t know if they’re planning on paying interest this time. Maybe with another IOU...[grin]
Folks I’m gonna say it again: make sure you adjust your withholding so you owe no CA state income tax at the end of the year. Do you trust them to pay you a refund a year from now? Err on the side of owing them money. Starve ‘em and starve ‘em now.
That was THEN. This is NOW:
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