State delays tax refunds, payments to county

Don’t expect your state tax refund to show up on time. California may owe you a few hundred dollars, but the state owes Sonoma County a lot more, and the frustration and anger increases accordingly. California State Controller John Chiang announced this week that he will be delaying state tax refunds for 30 days, as well as various payments to the county for social services.
Lauri Norton, a deputy county administrator, said it appears the county will be able to handle the current 30-day delay through internal borrowing. What the county is really concerned about is the governor’s proposal to delay these payments for a full seven months. Norton said they’ve already been experiencing payment delays.
“What he’s saying is we want you to come to work every day and provide the same services as always, but we’re not going to pay you until October for the work you do from February to September,” she said. “It means we’re fronting money for the state, interest-free.”
The impact to the county in that scenario is a projected $38 million in deferred payments for health and human services and $6.5 million for transport and public works. The county would also take an estimated loss of $500,000 in interest payments.
The payments to the county go to help some of the area’s neediest families. “The county is going to make every effort to maintain our services,” said Jo Weber, director of human services for Sonoma County. “We’re very outraged at the position the state is putting us in with this proposed deferral.”
About 7,300 people count on CalWorks monies each month, most of them children. The average grant is just $560 a month, which families rely on for paying the rent and transport. “That is the majority of their income,” said Weber.
The postponed payments also include CalGrants to university students and assistance to seniors through the State Supplemental Insurance (SSI) payments and State Supplementary Payment (SSP). Seniors should not experience a delay in payments as their money is administered through the federal social security system, so effectively the state is sending the federal government an IOU at this point.
In order to preserve cash for programs protected by the State Constitution such as education and debt service, Chiang had to delay other programs paid out of the general fund. He said on his Web site that delaying tax refunds will delay the economic stimulus expected from consumer spending. He also warned that if the legislature fails to provide adequate solutions by late February, he will be forced to postpone the payments for another 30 days.