California to issue IOUs

[MacUser]

Deficit forces California to issue IOUs

California is preparing to issue IOUs to its creditors this week as it grapples with an unprecedented cash crunch and prepares to begin its new fiscal year deep in the red.

Once the US’s richest state, California now has the dubious distinction of having the worst credit rating in the country.

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Can you even imagine wasting the printed ink and stamp.. to get a fake check that states... "We OWE you some cash and will pay later".

Talk about massive reform needed.

[paul]

Between the EPA requirements, unprecidented tax burden on education and medical, social welfare for undocumented workers and other variables the backbone of our syestem here in Cal. has been broken.

Most leaders have blamed Prop 13 which was passed in the late 70's which places a limit on property taxes. Prior to that the property tax was a bank account that could constantly be tapped for every need and caused the lost on many homes by the elderly who was being taxes out of their homes.

[paul]

came across this after my last post, my perceptions were ot off,

[quote="MacUser"]Deficit forces California to issue IOUs

Almost every state is suffering from the effects of the recession, but not every state accounts for 12 percent of the national gross domestic product. According to AP, if California goes down, so goes the nation: California's annual $1.7 trillion economy is the world's eighth-largest economy and provides a significant chunk of tax revenue for the government; California alone funds many social programs for the entire nation.

How did California dig itself such a huge hole? The recession certainly didn't help, but Time's Kevin O'Leary writes that California's financial troubles can be traced back to the passage of Proposition 13 in 1978. An antitax measure, Prop 13 makes it extremely difficult to raise taxes or pass a budget unless a 2/3 majority in both state houses agree — a virtually impossible task. California Rep. Zoe Lofgren tells Politico:

Mt point was that prior to prop 13 the homeowners property tax was an open cash register for the politican to fund all their social programs, while thousands of seniors who paid their mortage for thirty years were loosing their home because of the higher taxes.

[Mike Vande]

Can you even imagine wasting the printed ink and stamp.. to get a fake check that states... "We OWE you some cash and will pay later".

Isn't that what a bond is? Well, with interest, yeah, but I don't know why they don't just call it issuing bonds.

[dolfan]

I'll take Alabama and Mississippi being the fattest states any day over Cali's cash and credit crunch. Chalk one up to fried chicken and mashed potatoes and gravy.

[oletimer]

Which I believe you sell at your store.

Was by there just before dinner.

[MacUser]

Good Idea.. IOU chicken and cheese.

Create a few of these outlets..

[ImaPK]

Prop 13 can't take ALL of the blame. The problem started when "Ronnie Raygun" was elected governor. Prior to his election California had a fairly low property tax,and Ronnie had to start raising it every year that he was in office to fund all the ideas he had. I might be a little off on my numbers but if my memory serves me right my parents only saw a little over $1000 profit when they sold the last house we lived in out there before we moved to Tennessee. That was because they had already paid the property tax and didn't sell the house until July. That's why Prop 13 was passed by the people in 78.