ABC News is reporting that tax refunds are now on hold in California for the first time in state history (according to the state controller’s office).
“Unfortunately, we have asked the California Franchise Tax Board not to send over tax refund claims beginning today because we will not be able to process them and have them out the door by Feb. 1 when a 30-day delay in tax refunds goes into effect,” Hallye Jordan, spokeswoman to California State Controller John Chiang, told ABC News.
During the 30-day delay, the controller’s office estimates that a combined 2.74 million California individuals and businesses will have their tax refund delayed.
The controller’s office estimates that the delay in tax refunds will free up $1.99 billion over the next month to pay for education, debt service, and other payments that legally have first claim to state funds.
California has had no money in its general fund for the past 17 months, and has been paying its bills by borrowing from Wall Street and special internal funds.
If the state’s legislators and governor do not reach a budget agreement that brings immediate funds into the state’s coffers, the state’s borrowed funds will be entirely exhausted at the end of February, according to the controller’s office.
(Source: ABC News)
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3 Responses
“the delay in tax refunds will free up $1.99 billion over the next month to pay for education, debt service, and other payments that legally have first claim to state funds”
State funds? If I’m owed a refund it’s because I gave the state too much and the money is MINE not the states.
This is a Madoff-style Ponzi Scheme. The State collects more than the amount they are legally entitled to, and then “Refunds” the excess at the end of the year, with no interest paid for the excess money held.
Now, we discover that there is no “Fund.” The state merely uses new money coming in to pay for excess money they should be holding for the poor taxpaying Shlub, and, now that state tax income is down, tnere is no way to pay for past obligations.
That is precisely what Charles Pnozi and Bernard madoff did.
1. This has been known for some time. It isn’t new.
2. Unless California law allows the delay in refunds, people can sue them. In any event, the delay will only be for a short time until people try putting liens of prisons, police cars, parks, etc.
3. Like many “blue” states, California has been fiscally irresponsible, and is now is in trouble (it’s sort of like a Ponzi scheme that is doomed to fail during a major economic downturn).
4. Given their unwillingness to curtail services or raise taxes, their only hope is to be bailed out by the Federal government, which will greatly annoy those states that have been more prudent.
5. New York is probably in the same situation as California, but only slightly behind in bouncing checks. Note that almost all frum Jews happen to live in “blue” states, so we will be affected.