Friday, January 16, 2009

Try Not Paying THEM

So, my state is broke. The controller, John Chiang, announced today he would stop paying tax refunds on February 1. I guess that's what bankrupt firms do, stop paying their just debts. I just wonder what would happen if I stopped paying taxes.

However, this situation reminds of the advice that every tax professional has ever given me, don't over-pay your taxes just to get a fat refund, your just giving the government an interest free loan. Now I've got another reason to follow that advice. Hopefully, I was smart enough to owe a few bucks this year. More likely, I was not.

Meanwhile, the state failed to run a surplus and save for a rainy day when the revenue was pouring into the treasury. I pray the Republicans keep up the good fight and force steep spending cuts during this crisis. Rahm Emmanuel is reputed to have said, "We can't let a good crisis go to waste..." That can cut both ways.

Of course the usual suspects are crying about how their interest group can't stand to give up any of their government funding. For example:

"Cutting crucial health and human services for the poor while demand for those services skyrockets during this recession is simply the wrong approach to solving the financial crisis," Jeffrey Luther, president of the California Academy of Family Physicians, said in a statement.

Meanwhile in Texas, where the legislature meets for about five months, every other year, (H/T Dean), a state almost as big and with as many difficulties as California, their budget problem is vastly less. They are facing a $9.1 billion shortfall compared to California's $41 billion. The California budget gap is actually bigger than every state's budget except New York's, (H/T San Jose Mercury News.)

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