Posted on 05/05/2023 8:57:33 PM PDT by T.B. Yoits
California borrowed approximately $20 billion from the federal government to cover unemployment benefits during the pandemic, and with Gov. Gavin Newsom’s recent decision to not pay it back, employers are now saddled with the expense, according to experts.
“The state should have taken care of the loans with the COVID money it received from the government in 2021,” Marc Joffe, policy analyst at the Cato Institute—a public policy think tank headquartered in Washington, D.C.—told The Epoch Times.
In the proposed 2023–2024 budget, $750 million was allocated to start paying down the loans, but Newsom made changes to the plan in January and withdrew the funding.
The decision leaves businesses in the state responsible for the loans—as mandated by federal regulations—so the federal unemployment tax rate of .6 percent is set to increase by .3 percent annually, starting in 2023, until the loan is extinguished.
“California is just not really an employer-friendly state,” Joffe said. “This one thing will not be a difference between a business remaining open or closing, but it’s just another burden on top of the many burdens the state puts on employers.”
Twenty-two states borrowed money for unemployment insurance from the federal government during the pandemic, with all but four—California, Colorado, Connecticut, and New York—paying back their debts.
California owes the most, by far, with approximately $18.6 billion outstanding as of May 2, followed by New York’s $8 billion, Connecticut’s $187 million, and Colorado’s $77 million, according to U.S. Treasury Department data.
The discrepancy in amounts borrowed and owed by states lies in the different approaches to managing the pandemic, with California’s stricter lockdown causing unemployment to remain higher and longer, according to experts.
(Excerpt) Read more at theepochtimes.com ...
California Democrats Defaults on $18.6 Billion Debt.
Biden sees himself as the wiser of the lot has a grand plan he’s going to pay off the national debt with a government credit card.
IIRC——NEWSOM wants to be USA President!!!!!!!
ATLAS SHRUGGED SHOULD BE REQUIRED READING BEFORE ANY BUSINESS LICENSES ARE ISSUED.
IF they already had a $100 BILLION SURPLUS in 2022-—
THE FEDS NEVER SHOULD HAVE LOANED THEM A DIME.
According to Google’s generative AI chatbot, Bard, that leans left due to the slanted input to its Large Language Model - Note - two other answers offered by Bard read from the leftist hymn book:
Yes, it is true that in the proposed 2023–2024 California State budget, $750 million was allocated to start paying down the loans to cover unemployment benefits during the pandemic from the federal government. However, Gov. Newsom made changes to the plan in January and withdrew the funding, resulting in California defaulting on $18.6 billion loan on May 2, 2023.
The decision to default on the loan was met with criticism from many, including state lawmakers, labor unions, and business groups. They argued that the default would damage California’s credit rating and make it more difficult to borrow money in the future. They also argued that the default would hurt the state’s economy by costing jobs and businesses.
Gov. Newsom defended the decision, arguing that it was necessary to balance the state budget. He also argued that the federal government should have done more to help states pay back the loans.
The default on the loan is a significant setback for California. It is unclear how the state will be able to repay the loan without raising taxes or cutting spending. It is also unclear how the default will impact the state’s economy.
Bkmk
There are other states, ie Arizona that has an illegal immigration problem, but managed to pay their loan back.
It’s obvious they are spending more than they have. One area of spending is their homeless population which is costing them billions every year. ‘Living within your means’ seems to be a lost concept to these governors/politicians. It’s arrogant and irresponsible.
"California Defaults on $18.6 Billion Debt, Now Businesses Have to Pay"
"California Defaults on $18.6 Billion Debt, Now Big tech/Silicon Valley Has to Pay"
The tech companies wanted it, now they get to have it good and hard. Is that as big of a problem as the original headline screams? Maybe not.
It is true that there are plenty of other businesses in California, but those tech companies are some of the most well known.
Borrowing money and not paying it back is “balancing the budget”? Good to know.
Hmmm, how will they pay those reparations?
I remember a post by a Cali FReeper in the last year or two who made the case that the State of California had perpetrated a massive fraud against the Feds and that’s where their +$80bn surplus came from. Looks like he was right.
Seems about right they’d steal the money.
I’m sure the Media will point this out when Newsom runs for President. /s
Isn’t this how the Soviet Union collapse started?
For the slavery and Jim Crow that other states did to people long dead.
Why ANYONE who has half a brain keeps a business in that state is beyond me. Your paying huge taxes on everything you buy and gas is over $7.50 a gallon last I read someplace. I bought mine out on old Army Fort McClellan here in Alabama the other nite. The Alabama National Guard has taken over one large section of it and has gas pumps. All active and retired military get to use them. They are building a bunch of new barracks and admin bldgs out on the Fort. Oh, I paid $2.85, no .9 on it out there. Just the exact amount.
So that’s their plan; just don’t pay their debts.
Clever.
Myopic, but clever.
And if you think this isn’t bad enough, now California wants to pay $800 BILLION in reparations.....
https://freerepublic.com/focus/f-chat/4151354/posts
It’s unemployment taxes that went up….
That only businesses pay.
California is getting worse. We are also having trouble with schools wanting to hide from parents if their kids want to change genders. I was even told that parents were complaining because a private high school in my area has lots of lesbian students who are kissing in the hallways!
So we are morally and financially bankrupt.
But they b jus gonna spend it, so it goes right back into the economy.
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