California prepares to issue IOUs

[jimmy olsen]

Wow, what a fucked up state. 

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/06/24/BA5G18D621.DTL&type=politics

Lawmakers reject key budget bill; state prepares to issue IOUs next week

Matthew Yi,Wyatt Buchanan, Chronicle Sacramento Bureau

Wednesday, June 24, 2009

(06-24) 15:13 PDT Sacramento -- Sacramento - The Legislature today failed to approve a key part of the package of bills designed to close a massive deficit in the state budget.

The bill that failed was the first of about 20 bills that make up the package of solutions proposed by Democrats to help close a $24.3 billion deficit. The bill called for cutting spending by $11.4 billion through June 2010.

State Controller John Chiang, meanwhile, warned today that he will begin issuing IOU's next week to local governments, private contractors, state vendors and to taxpayers waiting on tax refunds - unless the Legislature passes a solution quickly.

The votes in both houses failed largely along party lines. Republicans have said they would not support any part of the Democratic plan because, they argued, the proposed cuts were not deep enough and the package includes $2 billion in new taxes.

But today's votes involved only the bill on spending cuts - not on tax hikes.

In the Assembly, the bill failed by a 48-30 vote. In the Senate, the bill got a 22-16 vote.

The bills need a two-thirds majority to pass so that they can become immediately effective. In the Assembly, that means a bill needs 54 of 80 votes; in the Senate, a bill would need 27 of 40 votes.

Chiang said he will start sending IOUs beginning July 2.

"Next Wednesday we start a fiscal year with a massively unbalanced spending plan and a cash shortfall not seen since the Great Depression," Chiang said. "The State's $2.8 billion cash shortage in July grows to $6.5 billion in September, and after that we see a double-digit freefall. Unfortunately, the State's inability to balance its checkbook will now mean short-changing taxpayers, local governments and small businesses."

[Monoriu]

I think it is great news.  Some people just won't be convinced that things need to change until they hit rock bottom. 

[Caliga]

I think it is great news.  Some people just won't be convinced that things need to change until they hit rock bottom.

[Martinus]

I think it is great news.  Some people just won't be convinced that things need to change until they hit rock bottom.

It sounds funny coming from a Chinese person.

[MadImmortalMan]

Apparently, a lot of states are about to hit the wall:

http://money.cnn.com/2009/06/24/news/economy/Clock_ticking_on_state_budgets/index.htm?postversion=2009062417

Interactive map:
http://money.cnn.com/news/storysupplement/economy/gapmap/index.htm

[DontSayBanana]

On a side note, what the hell is with Florida and foreclosures?

[Neil]

On a side note, what the hell is with Florida and foreclosures?

Lots of people bought lots of real estate on credit, as rental properties, vacation homes or for flipping.  It's like Vegas, only moreso.

[DontSayBanana]

On a side note, what the hell is with Florida and foreclosures?

Lots of people bought lots of real estate on credit, as rental properties, vacation homes or for flipping.  It's like Vegas, only moreso.

Ah. Pancake houses in the panhandle. Gotcha. (Before you jump on me, that's just dramatic effect- I realize Miami-Dade and Palm Beach are probably the biggest offenders)