If you (like me) were hoping to use your California tax refund to get a little ahead in this poor economic environment, you might want to make other plans. It's looking more and more likely that California will either delay tax refunds or issue IOUs to people who are owed money by the state. Of course, those of us who would have used that extra cash to buy stuff won't be able to, exacerbating the state's economic woes. They'll also be suspending welfare checks (not cool) and student grants (also not cool), among other things.
The problem stems from California's $40 billion deficit and the state legislature's inability to pass a budget that Governor Schwarzenegger will agree to sign. Though all states are required to balance their budgets each year (unlike the federal government), California is one of the few states that needs a 2/3 majority in the legislature to pass a budget instead of the majority that it takes to pass other bills.
From what I've read, the Democrats are proposing a combination of tax increases and cuts in funding to close the shortfall, but Schwarzenegger doesn't like the idea of raising taxes in any form. He just wants spending cuts -- lots of them -- from things like public schools, hospitals, prisons, transportation and just about every other thing that the government normally funds. He's also proposed cutting five days off the school year, forcing state employees to take off two unpaid days of work a month and closing many government agencies two days a month. To make matters worse, there are a handful of Republicans who have taken some sort of vow to Grover Norquist to never vote on a budget that raises taxes (and I've heard that some of them have promised never to vote on any budget, period, regardless of tax increases).
If you're worried about the effect of funding cuts, please contact the Governor's office and your state legislators with your concerns. Both sides need to hear from the people who will really be affected by this budget crisis.
Contact Governor Schwarzenegger:
By phone at 916-445-2841 or by web form
Contact Your State Legislators:
Assembly Member Phone/Email List
Senate Member Phone/Email List
(To look up your representatives in the state senate or assembly using your address, click here.)