I would wager that those who withheld more than they owed on their State of California taxes didn’t think that they would be making a zero interest loan to the state. I would be absolutely furious. I am thinking that many will never see their refund, as California appears to be on the precipice.
California has had no money in its general fund for the past 17 months, and has been paying its bills by borrowing from Wall Street and special internal funds.
If the state’s legislators and governor do not reach a budget agreement that brings immediate funds into the state’s coffers, the state’s borrowed funds will be entirely exhausted at the end of February, according to the controller’s office.
I would also wager that workers will be making a lot of changes to their withholding so as not to be owed any refund at the end of next year. Fool me once, shame on you, fool me twice…
Then again, the feds could come to the rescue and print some money for Cali. Good luck with your bond rating, California municipalities and (insert project here) districts.
Some muni bonds are actually paying very good rates right now. As I was sitting across the table from a financial advisor we discussed the rates that some municipalities and state agencies in California were paying and then we both laughed out loud and moved on to looking at munis from more stable cities and states. I am thinking that this conversation has been played out millions of times at brokerage desks across the nation.