| It's been coming a long time. We knew in December that California would start issuing IOUs instead of cash in February, which they mostly avoided by moving the budget gap into the following fiscal year, which began yesterday. After days and nights of negotiations, today the IOUs begin in earnest. Here it is: Chiang was set to print 28,742 IOUs starting at 2 p.m., said Garin Casaleggio, a spokesman for the controller. The initial warrants, which total $53.3 million, will go primarily to people who are expecting state income-tax refunds.
In addition, IOUs will go to contractors and the neediest of Californians. Interest could hit $3 billion over 30 years. That is, when you get an IOU from the state, they have to pay you interest. What can you do with them? Bank of America and Golden 1 Credit Union will accept the scrip, at least through 10 July. Who gets actual cash money? The state is constitutionally required to pay schools and bond holders first. State employees, retirees and businesses that provide Medi-Cal and In-Home Supportive Services also must be paid in cash.
Those state employees already get two unpaid furlough days a month, and it looks like it will rise to three, which would be a effectual 14% salary cut. In other bad fiscal news for the state: A state appeals court panel clouded the budget picture further Tuesday with a ruling that could cost the state nearly $3.5 billion. The judges in the 3rd District Court of Appeal said that since 2007, gasoline-tax funds intended for mass transportation had been improperly diverted by the governor and lawmakers to cover other expenses.
If you want to get angry at these legislators who cannot do their jobs, take a look at this list of cars that California bought for their legislators which cost over $40,000. Each. |
