Controller Releases California Tax Refunds
Posted: 5:51 pm PST March 6, 2009
SACRAMENTO, Calif. -- Here's one bit of good news in a sour economy: California is issuing tax refunds again.
State Controller John Chiang announced Friday his office will begin releasing nearly $2 billion in payments that were due to residents who filed income taxes and are currently owed refunds.
Chiang said residents who have filed their state income taxes and are owed a refund should receive it in two to three weeks. Payments will also be made to student aid, senior care assistance and companies that do businesses with the state.
Chiang had decided to hold those payments to conserve cash until the state budget was resolved. Once the new budget was adopted more than two weeks ago, the controller said it took staff time to verify the spending changes.
"The months-long budget impasse over how to remedy the state's $42 billion budget deficit coupled with a global recession produced a cash crisis not seen since the Great Depression," Chiang said in a statement. "Unfortunately, Californians have shouldered the price of partisan gridlock by having nearly $3 billion of their tax refunds, student aid, senior care assistance and other vital payments delayed during the month of February."
Chiang previously estimated his office would withhold $3.3 billion in February but the actual amount withheld was $2.8 billion.
All payments, including tax refunds and state obligations, will be made on time in March.
Meanwhile, Gov. Arnold Schwarzenegger's office announced that Friday will be the last day the state shuts down all its offices, including branches of the Department of Motor Vehicles. Instead, the administration is allowing employees to take so-called self-directed furloughs, letting them take any two days off a month without pay.
Chiang warned that the governor and lawmakers have yet to solve the state's budget imbalance. The controller says revenues continue to come in below expectations, and while the new budget dramatically reduces the state's shortfall to $630 million from $5.1 billion in the current fiscal year ending June 30, the state will still need to conduct short-term borrowing.
"You can't be in a position where you grow dependent on borrowing," Chiang said in a conference call.
Copyright 2009 by KTVU.com. The Associated Press contributed to this report. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
