California to issue I.O.U.’s

You know those commercials where the Governator and celebrities are living it up in California urging you to come and visit? I like those ads. They make me feel proud that the state I’m living in is a place people want to visit. Unfortunately, California is not as flawless and inviting as those commercials make it seem. Look no further than the IOU that may be coming to me in my mail this year instead of a tax refund. That’s right, you heard correctly. Michael Marois of Bloomberg.com reports, “California is forecasting that it will collect about $42 billion less than it will need to pay its bills over the next 18 months because of the yearlong national recession”. It seems that Arnold is a little too interested in upholding his status as a Republican’s Republican. As a result, he has failed to find common grounds with the Democrats whose $18 billion package of tax increases and spending cuts was vetoed by the Governor…again. According to Marois, California “may run out of money as soon as February, forcing the state to issue IOUs instead of cash to judges, lawmakers and those set to receive tax refunds”

California to issue I.O.U.’s. It’s like a really bad joke. “Hey honey, our tax refund is here!” Open it up and find a hand written note on a torn off piece of lined paper that reads “Dear Larry, this IOU is good for the $1232.76 that we, the State of California, owe you and your family. We’ll try to have it to you as soon as we can. Thanks for your patience, Arnold.”But in all seriousness, this budget stalemate is costing more than it’s worth to uphold Arnold’s “tough stance on raising taxes”. Construction on schools, roads and other public works, are not able to be approved and will potentially cost tens of thousands of people their jobs. It’s causing serious educational setbacks as well. The termination of teachers, holding up school funding, and Arnie even proposed cutting the school years for each district by 5 days. Let’s get it together California politicians. Have any other states ever had this much trouble coming up with a budget? What a bureaucratic embarrassment for the state of California. There’s no doubt that California is a spectacular state. And you should want to visit. But if I see another one of those “come to California, we’re the best” ads on TV, I’m turning the channel.

California to issue I.O.U.’s

Written by Team Aguilar member, Andrew Brentan

15 thoughts on “California to issue I.O.U.’s”

  1. What a delightfully politically skewed examination of California’s budget crisis. I offer the conservative and somewhat less popular viewpoint. I believe the only person to blame isn’t Arnold it is you (or in the rhetorical sense, all of us). For too long has California and Californians lived beyond their means, the state budget mirrors the one many of us had before the recession began. Meaning that we didn’t save, didn’t plan and spent wildly to assuage our every public works/service whim. Well, had we as a people demanded that our local and state governments spent with frugality even during the boom years we wouldn’t be playing the ‘blame the chief executive’ game. I’m sorry your article even refutes one of your previous entries where you mention that nobody could have believed that the housing boom was going to continue forever. Well as with any economic cycle California’s budget goes up and down… but we as a state thought the good times would last forever and spent accordingly. The issue now shouldn’t be raising taxes, it should be reducing government to a size we can afford on our current tax system. Otherwise, why not just raise taxes to the point that we are all comfortable (aka a slightly socialistic viewpoint). Just a thought, and a conflicting viewpoint on your apparently liberally biased viewpoint. Finally you should do some research as to how many states are in budget crisis, I think you’ll be surprised.

  2. Las Vegas Real Estate Agents

    California is not the only state… Your good neighbors to the East who love to visit California are currently already going through major cutbacks.

    Just wondering how the Government ever got by before the real estate (economic) bubble created bigger budgets?

  3. Altesino - Mortgage calculators

    This will start happening with every state. CA is first because of the bigger impact from the real estate market. Another big hit will be the state’s responsibility for Medicaid. This is going to kill every state budget over the next 5 years.

    Altesino – Mortgage calculators’s last blog post..Is Mortgage Refinancing for You?

  4. Like everyone here has mention most states are going to feel lighter pockets, It is going to be a trickle effect and we are just at the beginning of it.

    Tampa Real Estate Blog’s last blog post..Fishhawk Ranch Home For Rent

  5. While I’m not sure I agree on the IOU’s, I certainly disagree on Gov. Terminator being the problem. Dose anyone realize it’s the democrats who love to supporting the illegal Mexican immigrants in California. I am not trying to turn this into a race issue at all. The fact is California spends more on housing illegal immigrants in prison than my state, South Carolina spends on it’s entire budget. Keep giving out WIC, welfare, etc and they will keep coming. There are more problems in California than just immigration but I do believe it’s the largest financial problem California faces.

    The Terminator is in a tough spot.

  6. I am not sure I agree with you regarding immigration being the cause of California’s financial crisis. The problem is simple, it comes down to housing and when you have a drop in home values of 10-20% statewide, it’s going to affect everyone. This means that the property taxes being collected are down by 10-20%, people are spending less which creates less tax revenue to the state.

    You could make an argument that Hispanics are a large part of the working class in California, which will continue to purchase goods and services which will continue to drive a lot of money into the state economy. Until we deal directly with homeowner’s (which doesn’t look like we will) we will continue to be in a recession. There are a lot of bad loans in our financial system and things will not improve until we get them out.

  7. Mary Ann Knell-Peoria, IL Realtor

    Gosh, scary idea for everyone hoping to pay off bills with that refund-especially for those that may have recently been laid off or lost their jobs-those refunds are all the more precious. Here is to hoping everything gets worked out before it comes to giving out IOUs.

  8. Margaret Safford-Metro Atlanta Realtor

    Oh goodness, I hope you don’t end up with an IOU instead of a refund, that would put a bit of a damper on the new year.

    Margaret Safford-Metro Atlanta Realtor’s last blog post..Does the Metro Atlanta Real Estate Market Mimic the New HGTV Shows?

  9. Cary real estate

    Yes, today, anyone moving to overcrowded california should realize they need approximately 150 percent of what most jobs, even good jobs will offer to pay them. a weird thing happens quickly to those that do move, they soon find its “mandatory” they work 60 hours a week to keep their job, thus increasing their pay as if by magic 50 percent, but then the tax man cometh and take back more than you think. When both spouses have to work such onerous hours they often end up divorced and deep in hock to lawyers, the state, mortgage and auto companies. I don’t know anyone who simply works 40 hours a week and makes enough money to actually move-in to California anymore and maintain their own independent household. The only ones who come close are those that inherited their houses or were helped in some fashion buy that first house long ago and maintained a simple lifestyle. When auto companies run prospective buyers credit reports they have such a chuckle. So the final option is to keep balooning your credit till you hit the wall. In the developed areas of California $100,000 will allow one to live like a graduate student with a decent food budget, and that is all. $140,000 will allow you to lease a premium suv or car and go to vegas twice a year for a few night stay at a casino. Once you start making above $170,000 you can afford a modest middle class household in an iffy area but you won’t be saving much. If you want to live in the upper middle class try above $260k.

    Regards,
    Michael McLaughlin, Cary real estate

  10. Cary real estate

    It is really a shame. California should have a very good revenue collections and have a good budget surplus, becuase it has big business establishments and don’t forget the hollywood… that is being visited by tourist yearly. I cannot imagine why such state having budget deficit. Can’t he do anything to lift it up, instead of imposing big tax from the taxpayers? Cutting up teachers forces…does not really make any sense at all. It seems to me, this state is in a is going to collapsed financially, very sad. Cheers, Michael McLaughlin, Cary real estate

  11. real estate in panama

    yes It is true even if I will see another one of those “come to California, we’re the best” ads on TV, I will turn the channel. but if you really go and visit other states they are also going to pay the same money. But as we have to pay the money, we don’t like the way we are paying it. It seems like the money goes before it comes to our hand.

    Cheers,Samuel (The guy into Real estate business in panama)

  12. [email protected] county wrongful death attorney

    Despite all these negative things said about the Great State of California, people don’t leave. They continue to come. There was a lot of complaining about workers’ compensation insurance rates and that it would drive business out, but the state population continues to grow.

  13. Andrew, your mood is easily understandable. I know how disgusting it can be. I live very close to you and in NV I dont have anything to brag about. I have read somewhere that CA is the most attracted state of visitors and people who relocate in terms of jobs, education and retirement. Its not possible to argue. I bet you better turn the tv when you see one more ad like that 😛
    .-= [email protected] for sale las vegas´s last blog ..Commercial Real Estate Bubble =-.

  14. Henderson NV Homes

    You know, I’ve never seen those ads. It sounds hilarious I’ll have to search for them on youtube. Maybe they just don’t play here in Henderson. Well, with all the revenue the state generates from tourism it’s really no surprise.

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