California is a state that is essentially borrowing from one credit card to pay another. For close to two years California has had to resort to making payments with IOUs, including tax payers who had a refund owed to them.
Here we go again…
State Controller John Chiang said Tuesday that without a state budget, California’s government would be unable to pay its bills in late August (or maybe early September). That means issuing IOUs to some people. Possible dates for IOUs could be either Aug. 27 or Aug. 31, when big payments to schools are due, according to this schedule on the controller’s website.
This announcement, in the upside down world of California’s badly broken budget politics, felt almost like good news. With lawmakers and the governor making little progress on the budget — and showing little interest in making that little progress — the threat of IOUs seemed to provide hope that there’s a deadline out there, somewhere in the near future, that might force these guys to pass a budget.
Or maybe it won’t. Democratic legislative leaders and Gov. Schwarzenegger have all raised the possibility that there may not be a budget agreement this summer — or even this fall — if their demands aren’t met. Given the intransigence, maybe the controller should try issuing IOUs sooner rather than later, as a test of whether a failure to pay the state’s bills might be a spur to real budget action. (NBC_LA)
