Adding significant muscle to a bill that appeared to have some legs already, State Controller John Chiang on Friday sent a letter to Assemblyman Joel Anderson in support of AB 1506. The Anderson legislation, a badly-needed piece of creative juice in the midst of another protracted State budget mess, would require the State of California to accept as payment its own registered warrants, otherwise known as IOUs.
Quite simply, for Controller Chiang to support this legislation is…well…huge. He is, after all, the one forced to issue IOUs in lieu of real monetary payments owed by the state to several thousand taxpayers, state contractors, and service providers.
For Democrat Chiang to agree with Republican Anderson that "if it’s good for the goose, it’s good for the gander" makes AB 1506 as credible as it is compelling.
Until now, even though many legislators of both parties have jumped on board as bill co-authors, there has been a lingering question for some: "What does the Controller say about the idea? He will have to implement it."
Chiang answered the question with a letter to Anderson, received late yesterday:
Dear Assembly Member Anderson:
I am pleased to support your AB 1506, as amended July 1, 2009, which will require agencies to accept registered warrants. When a person receives an IOU from the State, the State should accept the IOU for payment obligations owed to the State.
Sincerely,
John Chiang
California State Controller
The second and last sentence of the letter, which sums up both the bill’s contents and reason for support, could be the most common sense statement to come out of Sacramento in several years (the letter is attached below).
With banks indicating they may not accept the IOUs, and the IRS jumping into the mix and saying that only licensed security dealers may purchase them, it leaves those holding warrants with little choice but to wait until the State gets its budget act together. AB 1506 would provide some financial room to operate for those also owing money to the state in the form of taxes, fees, license payments and a host of other liabilities (the state does collect a few taxes and fees, in case anyone forgot).
The bill unanimously passed the Assembly Business & Professions Committee earlier this week, and is headed to the Assembly Appropriations Committee on Wednesday.
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July 11th, 2009 at 12:00 am
Money’s getting tight in my household. Revenue isn’t the problem, but the bills are. We got a big dental bill coming up. I’m wondering if the state would accept an IOU from me for some payments I owe them. I mean, it’s really hard to decide who I should pay first. I know that if they accept my IOU, the family could breathe a sigh of relief. Now what if these bills keep coming and I just can’t increase the revenue to cover them??? I mean, we got a house, 3 dogs, 2 kids. What do we cut? We got impending increases in various taxes thanks to our elected officials in Washington to deal with. What if those taxes turn out to be the revenue killer for my family? I guess I’ll wait to see what the state does for their problem. Maybe they can help me out (Since it’s apparent that Washington sure doesn’t).