Announcement from CA FTB

[Demosthenes]

Date: January 16, 2009
Subject: California State Tax Refund Delay Information
Due to the state’s persistent cash and budget problems, the State Controller announced that he will have to delay refunds for 30 days starting February 1, 2009 for Personal Income Tax and Business Entity taxpayers.

We will update our website with FAQs as further information becomes available.

Whoa.

[Doktor Avalanche]

Welcome to California.

I'm wondering if I should just send an IOU in lieu of money.

[LaVidaRoja]

You're in California. Prepare and submit a proposition for the next election.

[Nikki]

Meh. Once every 10 or 15 years the state legislators act even stupider than usual and fail to pass a budget on time.

I bet it would end if there was an enacted proposition that states for each day the state goes without a budget, all the legislators do not get paid, and will never get paid for the days the state goes without a budget and forfeit the right to any type of pay raise until the next budget.

Right now there is no incentive for them as they still get paid.

That would only work if their legislative salary were their sole source of income.

Many (most?) states have part-time legislatures which meet for only a few weeks each year. That leaves the legislators plenty of time to support themselves with their outside primary businesses. Also, even for full-time legislators, there's always another significant income stream -- at least until you get caught or too greedy.

[Arthur Rubin]

Date: January 16, 2009
Subject: California State Tax Refund Delay Information
Due to the state’s persistent cash and budget problems, the State Controller announced that he will have to delay refunds for 30 days starting February 1, 2009 for Personal Income Tax and Business Entity taxpayers.

We will update our website with FAQs as further information becomes available.

If you are getting a refund in California, and it's not for a dissolving entity, you could always apply the refund to next year's estimated taxes, and reduce other withholding and estimated taxes to compensate.

At least, that's what I plan to do on my personal return at the moment. (And, before you accuse me of bad financial planning in getting a large refund, I should add it's hard to estimate medical deductions when the gross amount, including some, but not all, insurance reimbursement, was over $42K.)

[Demosthenes]

Welfare checks and student grants are suspended too.

By Evan Halper
11:24 AM PST, January 16, 2009

Reporting from Sacramento -- State Controller John Chiang announced today that his office would suspend tax refunds, welfare checks, student grants and other payments owed to Californians starting Feb. 1, as a result of the state's cash crisis.

Chiang said he had no choice but to stop making some $3.7 billion in payments in the absence of action by the governor and lawmakers to close the state's nearly $42-billion budget deficit. More than half of those payments are tax refunds.

The controller said the suspended payments could be rolled into IOUs if California still lacked sufficient cash to pay its bills come March or April.

"I take this action with great reluctance," Chiang said at a news conference in his office. But he said that without action to close the deficit, "there is no way to make it through February unscathed."

The payments to be frozen include nearly $2 billion in tax refunds; $300 million in cash grants for needy families and the aged, blind and disabled; and $13 million in grants for college students.

[Arthur Rubin]

Welfare checks and student grants are suspended too.

Apparently, the last time this happened, the legislator jiggered in an amendment so that their salaries cannot be cut, even if state employees are paid in vouchers....

(Whether it's a reasonable interpretation of the state Constitution is an open question, in my mind, but that was the basis for the claim, to be fair....)