California Controller John Chiang announced that California tax refunds will be delayed at least thirty days. This will be the first real consequence of the budget fiasco in Sacramento that will be felt by the average Californian.
With no end to the stalemate in Sacramento in sight—Democrats don’t want to cut many programs and Republicans won’t accept any tax increases—a thirty day delay may be very optimistic. Ray Haynes wrote in the Flash Blog that today’s California revenues match the budget for 2005-2006. He proposed the simple solution: Lower the expenses to those of 2005-2006.
I’m not holding my breath for a solution. If you’re a Californian expecting a tax refund, don’t hold your breath either. Indeed, when your refund is finally issued don’t be surprised if it’s a Registered Warrant (an IOU).
California needs to drastically cut state spending. Sooner or later this will happen. Given that I’m talking about California, I’m betting on later.