MWtoSD
Posts:1085
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| 06/30/2009 6:52 AM |
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States brace for shutdowns
Time is running out for the legislatures in Arizona, California, Indiana, Mississippi and Pennsylvania to solve budget gaps.
In California, state finance officials will begin issuing IOUs on Thursday if lawmakers and the governor cannot agree on a way to close a $24-billion shortfall. The IOUs would go to local governments, vendors, taxpayers and college students receiving state financial aid. California has issued such IOUs only one other time -- in 1992 -- since the Great Depression. |
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CoastalDweller
Posts:61
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| 06/30/2009 8:16 AM |
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| I'm submitting an offer on a DT condo this morning with an IOU. |
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Brian
Posts:4662
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| 06/30/2009 8:48 AM |
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I remember 1992 and the 1990s. Back then, the state did not cut social services like it's doing today.
How soon people forget. It will be worse this time around. The high cost of California will cause businessed to move out and we will be hemorrhaging more jobs.
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Brian
Posts:4662
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| 06/30/2009 8:50 AM |
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BTW, I support all the state cuts. Better bite the bullet now than kick the can down to the future.
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cbr600f4i2
Posts:478
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| 06/30/2009 12:00 PM |
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| You're right on Brian. I wonder how all these state "workers" who will get IOUs will make payment on their mortgages? Do you think companies other than the largest banks propped up by the Feds will actually take those as payment? For how long? Wonder what that will do to home prices over the long run. |
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Brian
Posts:4662
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| 06/30/2009 12:12 PM |
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Back in the 1990s, the banks will would cash the IOUs at a discount.
It would be interesting if nobody would negotiate the IOUs.
The state deficit is a long term thing. The IOUs are only a legal technicality as the State Controller cannot issue checks after the end of the fiscal year, until the budget is passed.
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creative_cpa
Posts:834
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| 06/30/2009 12:33 PM |
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| It has been said that if all the state services provided to illegal immigrants in California were eliminated, the state budget would be balanced. Remember Proposition 187? It was called the "Save Our State" initiative. It was passed in 1994 by a 58.93% margin. It was later found unconstitutional by a federal appeals court. Governor Pete Wilson started an appeal process to have the law reinstated. Then Gray Davis was elected and he dropped the appeals, which killed all chances of having the law reinstated. |
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Just Someone
Posts:232
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| 06/30/2009 12:54 PM |
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CPA.. "It has been said ..."
A question, "HAS IS BEEN DOCUMENTED?"
Many do pay taxes, and do work that the non-illegals will not. And it's business that want them and hire them. They could do better checks of their lower level employees, but then they would not have many of those low level employees. it's available, it's just no required.
Blame Regan... he eliminated the guest worker program when he da Gov... If we had legal temporary workers, that had to go home, periodically, then I believe the issue would be moot, because it would make hiring an illegal worker a much more hazardous to bizness.
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Eugene
Posts:747
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| 06/30/2009 1:19 PM |
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It has been said that if all the state services provided to illegal immigrants in California were eliminated, the state budget would be balanced.
I recall seeing a figure of $5 bil in potential savings.
A better question is, what would be the consequences?
Suppose you eliminate all emergency healthcare benefits to illegal immigrants and kick all illegal immigrant children out of public schools.
All illegal households with school age children will pack up and move ... no, not to Mexico (silly), but probably to Texas or Nebraska. Many households without children will move as well. Imperial, El Centro, Fresno, Visalia will become ghost towns.
There are perhaps three million adult illegals in the state, out of 18 million total in labor force.
What happens to the state economy if one out of every six gainfully employed people is forced to quit his job and leave? |
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MWtoSD
Posts:1085
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| 07/02/2009 3:28 PM |
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California begins printing IOUs
Nearly 29,000 IOUs worth $53 million will be sent, mostly to residents awaiting tax refunds. Finance officials set the interest rate at 3.75% for banks that accept the vouchers.The unusual press run came just hours after a panel of state finance officials set the interest rate for the IOUs at 3.75% for banks and other financial institutions that are willing to accept the vouchers. Some banks have agreed to honor the paper, including Bank of America and Wells Fargo, which will do so until July 10.
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