California Controller Considers Paying in IOUs
June 25, 2009 · Posted in Government
As Democrats in California continue to try and shove their tax hikes down Californians’ throats, the state could begin issuing IOUs next week:
As lawmakers rejected the core of a Democrat-backed budget plan intended to tame California’s $24-billion deficit, a top finance official warned that the budget crisis could force him to begin issuing IOUs next week.
Controller John Chiang announced that he would have to start paying many of the state’s bills with IOUs on July 2 if the partisan tug-of-war over the deficit isn’t ended by then.
With a scant seven days to that deadline, both houses of the Legislature took up one of the 20 bills that make up the latest spending plan but failed to garner the two-thirds vote needed to pass it.
Chiang met with legislative leaders earlier this week to warn them of the consequences of further delays in adopting budget revisions. He said in a news release that resorting to IOUs “sends a signal” from Wall Street to Main Street that California is out of options.
Lawmakers said they were aware of the stakes.
“The clock is ticking and it’s ticking fast,” declared Assemblywoman Noreen Evans (D-Santa Rosa), chairwoman of the legislative budget panel that crafted the deficit-reduction package.
“Everybody’s talking about jumping off the cliff,” said Sen. Bob Dutton (R-Rancho Cucamonga). “We’re already off the cliff.”
The best signal would be for California Democrats to come to their senses, adopt the cuts to state spending and finally get it over with. As to whether or not they will make the deadline for this budget, I’m making a “bold” prediction: No. They absolutely won’t.