The state is effectively bankrupt unless a miracle happens. A good lesson as to what can happen when idiots go crazy with spending:
Calif. tax refunds to be delayed starting Feb. 1
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Jan 16, 3:40 PM (ET)
SACRAMENTO, Calif. (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.
It is unbelieveable. The are $40 bil over budget with is like 33%±. It is so broken I don’t see how it can be fixed. Of course, if you are an illegal alien you won’t see any cuts.
It is unbelieveable. The are $40 bil over budget with is like 33%±. It is so broken I don’t see how it can be fixed. Of course, if you are an illegal alien you won’t see any cuts.
It is amazing. I have the spending charts somewhere but can’t find them right now. Spending has exploded in the last decade or so. What is crazy is that CA is not alone, although they are the poster child for this type of bullshit.
So this is what happens when you have a Republican Govenator? Don’t worry. In a few weeks both parties will act by agreeing to make cuts in the govt. and raise taxes.
Republicans as a party are a joke, which is why I’m an independent. The few true fiscal conservative Republicans in office now are swimming an uphill battle it seems.
Again, I go back to the syllogism posed by Friedman…shakes head, walks away.
Yep, he is the modern republican which is basically a democrat of 20 years ago. We are in deep shit. We enjoyed a period of optomism whe Arnie came in. He is powerless to change anything here and the producers and businesses are starting to flee again.
I think it is his left-wing nut job of a wife that must be running things over there. Seriously though, I do business in that state so I’m very much wanting to see the shit stop hitting the fan.
So this is what happens when you have a Republican Govenator?
Don’t worry … Illinois is even worse financial (and reputational) shape, and we’ve been a blue state for a long, long time. Our governor is a dem and we’re the cradle that raised Obama to the Presidency.
Not surprisingly, Cali and Illinois are among two of the largest states. I would guess the amount spent in both states on health and human services have just continued to explode/increase as the years go on.
You can’t “fund raise” enough to keep up with the spending.
Arnie came in all hard core and was going to whip the legislature into shape. He put together a couple of ballot measures to crush the unions. By the time the public employee unions got through with him (with a blitz of advertising) all the proposition failed and Arnie looked like the 2nd coming of Hitler. You have unchecked liberalism here. I’m thinking it’s going to be the same on a national level the next 4 years.
I follow this stuff on daily basis–markets/economy, etc.–and I will tell you that the situation at the state level is really dire.
Look at Patterson in NY and what he is trying to do to, it’s the same in other states as well. The comment about the next four years makes me cringe because you are right, few people can grasp the magnitude of what has occurred in just the last three months in this country. My fellow investment professionals can’t keep up with everything, nor can I. We are forever changed as a country and society unless there is a significant change in policy–a pipedream at this point.
A few charts, not the CA one I was looking for though. The second one really sucks, that’s you and me having to pay up. Again, socialism fails and it fails miserably, welcome to USA 2009.
He put together a couple of ballot measures to crush the unions. By the time the public employee unions got through with him (with a blitz of advertising) all the proposition failed and Arnie looked like the 2nd coming of Hitler.
Time is going to show that this was the last clear chance to get it under control. But not to worry, there are plenty of “rich” folks who need to be taxed to pay for this crap.
Is there any relation between these problems and proposition 13 – 1% property tax cap?
I only ask as Indiana is trying to move toward that, and I always wondered how you managed to pay for everything with a 1% cap. My property tax rate last year was 3%, and we’re in decent shape in Indiana, with a rainy day fund of over a billion dollars…though we have to start cutting as our tax rate declines.
Maybe so, but who cares right? I am an independent as well, but could care less what others think or do politically. If you believe that liberalism is the source of a state going bankrupt, and also believe we, as a country are headed that way, capitalize on it.
Save your money, wait for the people to have to puke up things puke them up, then get what you want. Whether it be a retirement home or shares of stocks, or a new tri bike.
Also, I believe that now, or the near future, is going to be one of the best times to start a business. You are going to get penalized to earn more money in this country, to build equity…that is not taxed. When the economy starts to cook again (and it will in time), you will be so far ahead.
NONE of our problems is because of tax rates or rate caps, period. It is all out of control spending at all areas of govt levels. All politicians feel like they have to do something - which today means spend money. Its all so warped - and now our new President will want to “change” things which means he wants to spend more money that ever. Its all so original.
dude - ‘fiscal irresponsibility’ is not the same thing as ‘socialism.’ know anyone in norway? honestly, sometimes i think half the reason that so many americans are so socialism is because they have no idea what it really is.
Every ideology has it’s faults. But socialism’s premise of “redistributing wealth” through progressive taxation hurts everyone, and is especially punative to the middle class. People flat out do not get that.
* ** MattinSF and the Mrs.*