Because of the ridiculous 2/3rds budget rule — the super-majority required to
pass a budget in the California state legislature — and Arnold’s failure to deliver even one vote from a small cabal of obstructionist Republicans, Californians may be getting IOUs in the mail next month instead of financial aid checks or tax refunds.
So let’s all print out some Arnoldbucks and use them instead of money.
I sure hope the first checks not going out are the paychecks to the legislature.
If it fails to repay taxpayers’ overpaid tax, California will have broken its contract with its citizens. It’s only a matter of time before its citizens respond in kind, changing their withholding to zero (or close to it) and holding back any money until it’s due.
Over 58% of the State’s General Fund comes from personal income tax. Over 28% comes from sales taxes and 9% comes from business income and franchise taxes, for a total of 95% of the general fund coming from taxes.
If it has a cash flow crunch now, imagine the flow of income tax withholding into the General Fund vastly reduced when people realize that if they overpay, they may not get it back!