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Tax Refunds Will Be Delayed


Starting this week, California's not paying some of its bills. The state is short on cash and that means billions of dollars in tax refunds and other payments aren't going out. But taxpayer groups are lobbying to get refund checks in the mail sooner. Marianne Russ reports.

Republican Assemblyman Ted Gaines says tax refunds stimulate the economy - and should be a top priority:

Gaines: "They put the money in. They ought to get their money back. It's kind of like going to the grocery store and buying seven dollars worth of groceries and handing the clerk a ten dollar bill and not getting your change back."

Gaines and taxpayer groups are urging Controller John Chiang not to delay refunds. But Chiang says under state law he has to pay schools and bond-holders first. He's delaying nearly four billion dollars in payments including checks for student aid and social services.

Chiang says typically the state pays tax refunds as they are filed - but California doesn't have to pay them until the end of May. He says the cash crunch will continue until lawmakers address the state's $40 billion budget deficit.

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