IOUs for Child Care Providers?

California State Controller John Chiang's office began issuing IOUs on July 2, 2009, to pay the various businesses, big and small, that contract with the state.

The IOUs have an interest rate of 3.75% and a maturity date of October 1, which assumes that California will have a state budget in place by then.

Chiang's office has also compiled a list of programs and agencies that will receive IOUs in lieu of cash payments as well as a list of those that will continue to receive their regular cash payments for the foreseeable future.

The California Department of Social Services (CDSS), which administers that portion of the CalWORKS program known as stage 1 that provides temporary cash assistance for basic family needs and issues specific welfare-to-work requirements, is on the list of agencies to receive IOUs.

Educational institutions, however, will continue to receive their monthly budgetary allotments, since funding for K-12, community, colleges, and public universities are constitutionally mandated.

This includes the California Department of Education (CDE), which administers that portion of CalWORKS known as stage 2 and stage 3 that provides child care subsidies to low-income families and individuals.

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State Budget Update: A Fair & Balanced Approach?

The state legislature's budget conference committee recently unveiled its plan to close California's $24 billion budget deficit, but Arnold Schwarzenegger has already threatened to veto this plan, because it includes $2 billion worth of taxes on oil companies and tobacco companies.

Although conference committee members have attempted to moderate many of the draconian cuts proposed by Arnold Schwarzenegger in May, which included the complete elimination of Healthy Families, CalWORKs, Cal Grants and In-Home Supportive Services (IHSS), the conference committee's budget proposal still relies heavily on spending cuts to balance the budget.

Specifically, the budget conference committee is proposing:

• $11 billion worth of cuts to education, health, social, and other programs
• $10 billion worth of accounting maneuvers
• $2 billion worth of revenue solutions consisting of an oil severance tax and a tax on cigarettes.

While Child Care Providers United (CCPUnited) of California applauds the budget committee's decision to reject many of Schwarzenegger's most damaging proposals, CCPUnited feels that the committee must be more courageous in its pursuit of a fair and balanced approach.

We understand that the two-thirds budget rule makes it nigh impossible for Democrats to pass a budget containing any tax increases without Republican votes. However, $2 billion worth of revenue solutions in comparison to $11 billion worth of cuts can hardly be called balanced.

That is why we must continue to press the legislature and the governor by taking the following actions:

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