California and in particular, Los Angeles, is famous for harboring residents who will try to stunt on you in a brand new Audi but can barely afford to cover the cost of an entrée off the value menu at Carl’s Jr.
Unfortunately, the botched budgeting that is spending more than what you bring in has now trickled over to the state government.
Indeed, the world’s eighth largest economy is marred in debt with a deficit hovering slightly over $26 billion.
For months now Governor Schwarzenegger has battled with lawmakers to come to terms on how to balance the state budget. However, neither side could come to terms on whether to balance the budget by cutting spending, raising taxes or both.
With their failure to act on Tuesday – the official end of their fiscal year – the state controller’s office says the treasury does not have the funds to meet all its financial obligations. That includes paying people.
As a result, IOUs are scheduled to go out to private contractors, state vendors, residents owed tax refunds, in addition to local governments for social services.
I didn’t know IOUs were real. I honestly thought such a concept only existed as a running gag in sitcoms. Sadly, the joke is on thousands of state workers and contractors who will be issued promises versus actual funds.
Although some banks like Chase, Bank of America, and Wells Fargo claim they will accept IOUs up until July 10, there’s something far too unsettling about a state as large as California not being able to pay people.
If you sent an IOU to a dealership you would have to start parking your car at your mama’s house, because it wouldn’t be long before they tried to take your ride back. If you made a similar attempt with the light company, it would behoove you to start stocking up on candles.
I am recent transplant to California, and while I love the weather and the scenery, I love tax refunds more. Get it together, Ah-nold.
Cali residents: Have you been issued an IOU yet? If so, how much of an additional burden has this placed on you and your finances? I’d love to hear from you.
Leave your comments below or email me at firstname.lastname@example.org.
Michael Arceneaux hails from Houston, lives in Harlem and praises Beyoncé’s name wherever he goes. Follow him on Twitter.