I suspect we're soon in for another dose of Minnesota Smug ... y'know, that insufferable Keilloresqe condescension that comes over us whenever anybody, anywhere does something more spectacularly bone-headed than we have just managed. Well, here we are ... having just royally screwed up our state budget, along comes the news that California's budget is so totally hashed that they are now sending out IOUs as payment for state debts. Yeah, there ya go -- T-Paw hasn't resorted to that maneuver. Good on you, Timmy. See ya in the White House ...
Weeeeelllll...not so fast. How these things look depend a lot on where you sit. Yeah, California is sending out IOU's, but get one of these IOUs and you can take it to the bank ... give it to the teller and the teller gives you good old American folding green, legal tender, on the spot. Or -- if you're doing fine and feeling flush, hang on to that IOU and the State of California will pay interest -- 3 percent -- on what they owe. In short, the state is paying what it owes ... plus ... holding up its end of the bargain even if Arnold and the Legislature can't get it together.
Compare that to the mess T-Paw and Maggie the K have left us with. Don't kid yourself -- the state's sending out IOUs -- $1.7 billion worth of them -- they're just going to school districts. Instead of paying what it owes our local schools on time, they're pushing it into another budget cycle so it doesn't show up on this year's books -- make believe budgeting on the grand scale. Bernie Madoff should have gone into politics.
Anyway, the upshot is, our schools don't get an IOU, they just don't get paid. Trouble is, they have bills to pay, payroll to make, but don't have the option of saying, just hold on a few months while our books finish cooking. No, the public schools have to go to the bank, take out a loan to pay what they owe ... and with that loan comes interest -- paid by the school district with money that would otherwise have been spent on teachers, books or a trip to the state tournament for a championship football team. Now, thanks to our illustrious leaders, it's doubtful they can afford the football team.
Remember, in California, the state pays interest on its IOUs. In Minnesota, our hard pressed school districts pick up the tab
California dreamin'? We'd best not get too smug, not smug at all.
