12 August 2009

California: A Real Class Act

The Cranky Professor: Is California Over?
Won't take her own scrip?
Small businesses that received $682 million in IOUs from the state say California expects them to pay taxes on the worthless scraps of paper, but refuses to accept its own IOUs to pay debts or taxes. The vendors' federal class action claims the state is trying to balance its budget on their backs.

Lead plaintiff Nancy Baird filled her contract with California to provide embroidered polo shirts to a youth camp run by the National Guard, but never was paid the $27,000 she was owed. She says California "paid" her with an IOU that two banks refused to accept - yet she had to pay California sales tax on the so-called "sale" of the uniforms.

The class consists mostly of small business owners, many of whom rely on income from government contracts to keep afloat. They say California has used them as "suckers" as it looks for a way to bankroll its operations while avoiding its own financial obligations.
I'd offer the same advice to my three friends who moved to California this year as I would to underage kids going to a house party: wear shoes you can run in and always know where the back door is.


  1. So .. if you're a government you can pay for stuff with script but you can refuse to accept payments in the same format? And people have to pretty much just suck it up?

    Aw man - being a government sounds sweet. How do I sign up?

  2. That's a great idea. I hearby announce the formation of the Non-contiguous Confederation of Sovereign Bloggers.

    My first act is to declare that it is legal for the government of the NCCSB to pay all debts in used cocktail napkins, but all amounts owed to it must be in the form of precious gems or rare metals, or in the event of national feast days, in fine meats and cheeses.