California Controller to Delay Certain Payments for 30 Days
From the State Controllers Office:
As State Controller, John Chiang is responsible for ensuring the State has sufficient funds to meet its financial obligations.
With no signs of an economic recovery in sight, it is critical that the Governor and the Legislature enact a sound budget solution that provides much-needed cash by February 1. If not, the State will be $346 million in the red at the end of February, and $5.2 billion in the red in April.
In order to preserve cash for education, debt service and other payments that are deemed by the State Constitution, federal law or court rulings as having first claim to available General Fund cash, the Controller announced he will begin delaying, for 30 days, payments to all other programs that are funded out of the State’s depleted General Fund.
Those payments that will be delayed include thousands of payments to businesses for services and products they provide to the State; to assistance for more than a million aged, blind and disabled Californians that goes to pay their rent, utilities, or put food on their tables; to State agencies that use the payments to fund critical public services, ranging from public safety to health and welfare.
The delay in payments also will apply to tax refunds that millions of individuals and businesses have earned, expect and deserve. Not only will the 30-day delay in refund payments cause significant financial harm to California families, it will delay the economic stimulus expected from consumer spending. Postponing the payment of tax refunds also will ultimately cost the state tens of millions of dollars in interest payments if those payments are postponed beyond the date prescribed by law.
If the Governor and Legislature fail to provide real and adequate solutions by late February, the Controller said he will be forced to postpone those payments for another 30 days.
Below is information regarding which legally protected payments will continue to be paid, what payments will be delayed, frequently asked questions, and the text of a letter from the Controller to Legislators.
| Tax Refunds Estimated Payments to be Delayed |
|
|---|---|
| Category | Payments to Be Delayed |
|
Personal Income Tax Refunds
|
$1.91 billion
|
|
Bank and Corporation Tax Refunds
|
$81 million
|
| Local Assistance Estimated Payments to be Delayed |
|
|---|---|
| Category | Payments to Be Delayed |
|
Education
Student Aid Commission (CalGRANTS) |
$13 million
|
| Social Services Estimated Payments to be Delayed |
|
|---|---|
| Category | Payments to Be Delayed |
|
Department of Social Services
SSI/SSP to Aged, Blind and Disabled |
$188 million
|
|
Department of Social Services
CalWorks (Temporary Assistance to Needy Families for Basic Needs, Includes Specific Welfare-to-Work Requirements, Provides Supportive Services such as Childcare) |
$114 million
|
|
Department of Social Services
County Administration (Payment for Operating Costs and Salaries of County Staff Who Administer Public Assistance Programs) |
$122 million
|
| Other Local Assistance Estimated Payments to be Delayed |
|
|---|---|
| Category | Payments to Be Delayed |
|
DHSC Medi-Cal County Administrative Costs
|
$22 million
|
|
Department of Developmental Services
(Funding for Regional Developmental Centers that Provide Services to Individuals with Developmental Disabilities) |
$280 million
|
|
Department of Mental Health
(Assists Counties in Providing Mental Health Treatment and Rehabilitative Services) |
$77 million
|
|
Department of Alcohol and Drug Abuse
(Assists Counties in Providing Prevention, Treatment and Recovery Services) |
$19 million
|
|
Judicial Branch
Support for Operation of Trial Courts |
$205 million
|
|
Miscellaneous Local Assistance
|
$142 million
|
| State Operations Estimated Payments to be Delayed |
|
|---|---|
| Category | Payments to Be Delayed |
|
Unallocated State Operations
(For Agency Utilities, Lease, Office Equipment Maintenance) |
$515 million
|
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