Happy days are here again, well sort of.
State Controller John Chiang has resumed payment of state income tax refunds and other obligations that have been frozen last month when California ran out of money. You remember that, don’t you? Business was bad, and not getting our refund or refunds made things worse?
Controller Chiang said the tax refund checks, cash grants for needy families and the elderly, blind and disabled, and grants for college students can be resumed now that the new state budget is replenishing state coffers. Our governor signed the bill last month that includes billions of dollars in tax hikes and service cuts (yuck).
Even with the new budget in place, it is appearing that there isn’t enough money to cover all the refund checks out now. State officials say they will need to borrow $1.5 billion dollars to make it through tax season. That loan would be repaid later in the current fiscal year. Perhaps our Governor and the State legislatures would like to loan us that money?
Ah, but the officials in Sacramento say that they aren’t expecting to have any trouble securing the relatively small loan. Excuse me while I cough for a bit since even though I intellectually know that at the governmental levels over one and a half billion isn’t a lot of money, to my poor brain, that is still one and a half billion bucks.
Chiang had suspended $2.8 billion in payments, including $1.96 billion in personal income tax refunds and $181 million in Bank and Corporation tax refunds.
“California owes a great debt of gratitude to those who went without payments,” Chiang said in a statement. He said if the state had continued sending checks during the cash crunch, it would have triggered “a massive default . . . that would have haunted Californians for generations to come.”
Well, that and there would be riots in the streets and California would be on the hook, by law, to pay us interest that is due on money not received. That would add potentially billions in more dollars they would be in debt.
Payments that were due in February began going out Friday. Officials at the controller’s office said it will take a week or two to send all of the suspended checks. Refunds processed in March will be sent without delay.
The cash shortage had also prompted Gov. Arnold Schwarzenegger to order most state workers to take two Fridays off per month without pay, forcing many state offices to close on those days. Friday was the last day that order was to be in place. That means state officials will be working. So we can start scheduling those Department of Motor Vehicles appointments on Fridays again? Hooray and honk honk beep beep.
Under an agreement negotiated between the administration and labor leaders, government workers will now be forced to take only one day off per month without pay and will choose the day. That seems fair since a lot of us have had our hours cut and are down to four day work weeks as well. It beats losing one’s job entirely. And one day a month off is better than 4-5 days off in terms of making money in these hard times.
So if you have already filed and are waiting for your refund, feel free to post here and let us know when you filed and when you get your refund.
Be safe and sane, everybody!
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California To Start Issuing Refunds – Hooray, Sort Of