AvidFan Posted August 24, 2010 Share Posted August 24, 2010 http://www.google.com/hostednews/ap/article/ALeqM5jJ7uUDlO1sEo7K7bEfHpj4G7wuLQD9HPHOJO0 California to delay payments sooner than expected (AP) – 14 hours ago SACRAMENTO, Calif. — Gov. Arnold Schwarzenegger, the state controller and treasurer decided Monday to delay $2.9 billion a month in payments to school districts and counties sooner than expected so the state can meet debt and pension obligations.The leaders issued a joint letter notifying state lawmakers of their decision to begin withholding the payments in September instead of October. The move reflected the limited resources the state has to work with as the impasse over California's $19 billion budget shortfall has dragged on for nearly two months. Controller John Chiang has warned that the state could again issue IOUs, perhaps as soon as the end of August. The Legislature gave authority in February to the three officers to delay $2.5 billion a month in payments to schools and $400 million in monthly payments to counties during October, November and December to help manage cash flow. The step came on top of a July deferral of $2.5 billion for schools and $700 million for counties. Bob Wells, executive director of the Association of California School Administrators, said the state is only shifting its problems to school districts. "What started as not a big deal from one day to the next is now delaying $10 billion from schools for many months and school districts still have to meet payroll," Wells said. The governor's finance spokesman H.D. Palmer said most school districts should be able to endure the delayed payments because the state issued the notification within the same fiscal year. He may have been Hercules in New York but he's more like Conan the Destroyer in California. He may even become the Terminator. I'm sure everyone on HPC has Total Recall of the troubles California had in 2008. It's really Kindergarten Cop stuff - don't spend beyond your means in a credit bubble and you won't incur Collateral Damage that may mean you have to be the Running Man when people realise it's the End Of Days. Or something like that. Quote Link to comment Share on other sites More sharing options...
DisQ Posted August 24, 2010 Share Posted August 24, 2010 http://www.google.com/hostednews/ap/article/ALeqM5jJ7uUDlO1sEo7K7bEfHpj4G7wuLQD9HPHOJO0 California to delay payments sooner than expected (AP) – 14 hours ago He may have been Hercules in New York but he's more like Conan the Destroyer in California. He may even become the Terminator. I'm sure everyone on HPC has Total Recall of the troubles California had in 2008. It's really Kindergarten Cop stuff - don't spend beyond your means in a credit bubble and you won't incur Collateral Damage that may mean you have to be the Running Man when people realise it's the End Of Days. Or something like that. lets face it, eveything is cut to the bone there for last couple of yrs or so. From experience, I have large family presence in CA incl parents so I am often there, one actually worked in Governer's office for some time at senior level, first had his large salary cut then was made redundant, many others are either unemployed, working on reduced pay or reduced hours. Everything is hanging by a thread, I am surprised it lasted that long tbh. There is no money to be saved. Interesting times. Quote Link to comment Share on other sites More sharing options...
xux42 Posted August 24, 2010 Share Posted August 24, 2010 (edited) "...so the state can meet debt and pension obligations" Stop education in order to keep paying the pensions of ex-public servants. That is so fundamentally flawed I don't know where to begin. Since when was education not an 'obligation'? Anyone happen to know what the constitution says about this? Are we nearing impeachment territory? Christ on a bike this is beginning to sound like the fall of the Roman Empire... Edited August 24, 2010 by xux42 Quote Link to comment Share on other sites More sharing options...
domo Posted August 24, 2010 Share Posted August 24, 2010 There is probably 3x the budget needed for education. California just went on a spending spree that would make an Arab oil sheik proud. Quote Link to comment Share on other sites More sharing options...
AvidFan Posted August 24, 2010 Author Share Posted August 24, 2010 "...so the state can meet debt and pension obligations" Stop education in order to keep paying the pensions of ex-public servants. That is so fundamentally flawed I don't know where to begin. Since when was education not an 'obligation'? Anyone happen to know what the constitution says about this? Are we nearing impeachment territory? Christ on a bike this is beginning to sound like the fall of the Roman Empire... I'll go with Gerald Celente and others... 2012 - it'll look like there's no way out. Real depression stuff. Then from 2013 onwards - watch the oil price. One catastrophe after another. Think of every Hollywood disaster movie rolled into one. At least they've been mentally prepared for it. Quote Link to comment Share on other sites More sharing options...
Guest spp Posted August 24, 2010 Share Posted August 24, 2010 I'll go with Gerald Celente and others... 2012 - it'll look like there's no way out. Real depression stuff. Then from 2013 onwards - watch the oil price. One catastrophe after another. Think of every Hollywood disaster movie rolled into one. At least they've been mentally prepared for it. He's now looking for something big in 2010! Silver looking bouncy today. Quote Link to comment Share on other sites More sharing options...
RufflesTheGuineaPig Posted August 24, 2010 Share Posted August 24, 2010 Can businesses and citizens pay their taxes with these IOUs? If so the IOUs could be swapped for cash, probably at about 80% of face value to cover administration costs plus a profit margin, by a clever company looking to reduce it's tax bill. Got a $100m tax bill? Knock $10-20m off by buying IOUs at 80c in the dollar. Of course then the state finds its tax income consists mostly of it's own IOUs and implodes. Tax Office: We've collected $20bn in taxes Treasury: Great, hand it over. Tax Office: Here, it's all IOUS though Treasury: You fired, were all f*cking fired. Of course if you don't allow people to pay taxes with IOUs then state employees will be getting fined for failing to pay taxes because the state hasn't paid them! Quote Link to comment Share on other sites More sharing options...
lets get it right Posted August 24, 2010 Share Posted August 24, 2010 "...so the state can meet debt and pension obligations" Stop education in order to keep paying the pensions of ex-public servants. That is so fundamentally flawed I don't know where to begin. Since when was education not an 'obligation'? Anyone happen to know what the constitution says about this? Are we nearing impeachment territory? Christ on a bike this is beginning to sound like the fall of the Roman Empire... Whilst I agree with your sentiment (education versus pensions etc.) I do wonder at this obsession with education. The only reason education is an obligation of the state is because sometime in the past a law was passed to make it an obligation. I imagine it would be very easy to repeal whatever Education Act it was that made schooling compulsory. Why can't the little darlings sit at home playing XBox live all day? They learn feck all at school anyway. What my sons learnt at school could have been imparted in an intensive year when they were say 12 years old. Whereas, trying to wriggle out of pension liabilities built up over decates would be much harder. Quote Link to comment Share on other sites More sharing options...
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