Monday, March 9, 2009

Don't loan money to friends, family...or state government?

Here's one positive spin on Wisconsin's state budget least we're not in the position of having to delay processing 2008 state income tax refunds, as they have in California and Kansas. It seems collecting taxes is one thing, returning them is another.

The economic crisis is affecting nearly every state's budget and at least two are so broke they do not have the cash on hand to issue tax refunds due state taxpayers who withheld too much from their 2008 income. California's $42 billion budget deficit has resulted in the suspension of tax refund payments indefinitely. Kansas stopped issuing refunds on a temporary basis while the governor and legislature hashed out the differences in their proposed budgets; once the details in the compromise have been worked out, refunds are expected to resume.

So far no such proclamations have come from our state department of revenue, which has received 1.09 million 2008 tax returns to date. But Badger State pols shouldn't be too smug. Wisconsin may be keeping company with those deadbeat states next fiscal year. According to the National Conference of State Legislatures, for 9 states, the fiscal year 2010 budget gap is predicted to be more than 15% of each state's general fund. The 9 states include Wisconsin, California, and Kansas.

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