Santa Barbara County Not Expecting to Issue IOUs

As California grapples with its budget crisis, Auditor-Controller Robert Geis says the county has maintained a 'pretty strong cash flow'

By Giana Magnoli, Noozhawk Staff Writer | updated logo | Published on 07.02.2009

  • E-mail
  • Print this page Print
  • Post | View Comments (1)
    • Share

Although California’s budget deficit may cause billions of dollars in cuts and IOUs to its 58 counties, Santa Barbara County officials said Thursday they don’t expect IOUs to be issued here.

“We anticipate not having to issue IOUs for a while, or even consider it,” county Auditor-Controller Robert Geis said.

The county’s “pretty strong cash flow” is partly because of tax and revenue anticipation notes — basically, cash flow loans. Since property taxes come only in December and April, the county borrows money at the low interest rate of 0.33 percent to get by in the meantime.

The low rate can be attributed to the county’s good financial position, including good credit, Geis said.

“We’re not worried yet, but it depends how long this stretches out,” he said.

As for IOUs, Geis said the treasurer-tax collector may buy them up and invest them so the county can give out cash now. There is an interest rate attached to the IOUs that’s redeemable in October, but if it’s bought up and invested, those investments will then earn interest.

Even though IOUs won’t be a factor in this county — at least for now — budget cuts will substantially reduce funding to many services. The California Association of Counties expects $4.3 billion in cuts and IOUs to counties, which includes $776 million in IOUs for payments due to counties in July and $510.3 million in cuts and cost shifts in health and human services.

Many services being cut, such as social services, mental health and alcohol, are legally required to be administered but will be paid with IOUs instead of normal payment, said Jeremy Tittle, executive assistant for 1st District Supervisor Salud Carbajal.

The county expects $3 million a month in IOUs, but that amount is unconfirmed, Tittle said.

“It’s just another case of the state passing on its problems,” he said.

Click here for a related story on how IOUs can be redeemed locally.

— Noozhawk staff writer Giana Magnoli can be reached at .(JavaScript must be enabled to view this email address).

Comments

Noozhawk's comments are moderated, but by posting here you accept your responsibility to follow our rules.

  1. No abusive, defamatory or libelous attacks. In plain English: No personal attacks.
  2. No vulgar or discriminatory language.
  3. If you do not follow these rules, don't be surprised if your comment is removed.
  4. Please use the Report Abuse button on offensive comments.
  5. Share what you know, ask about what you don't. Give us your eyewitness accounts, observations, background and history. Tell us what else you want to know about the story.
  6. Stay on the topic, PLEASE TURN OFF YOUR CAPS LOCK, and forgive people their spelling errors.

Noozhawk's intent is not to limit the discussion of our stories but to elevate it. Thank you for your respectful participation. Click here for our complete Terms of Use.

Comments are moderated, and will not appear until they've been approved.

You must be a registered user to comment. Create a user account

Log in




Auto-login on future visits

Forgot your password?

» Thanks for clarifying, Jeremy on 07.03.09 @ 08:29 AM

Good to know your boss has schooled you in the complexities of public financing and the state constitution and most importantly that according to you the county has no role whatsoever in the kind of fiscal burdens its population imposes on the state.


More Local News »

Phil Wyatt Builds High-Tech Company with Low-Key Approach

Wyatt Technology's founder and CEO serves as a steady guide for his staff in pinpointing a niche in laser-based instruments

Santa Barbara Airbus Picks Up and Moves to New Location

The company will have more legroom at its new home on Technology Way in Goleta

Residents Get Look at Master Plan for Santa Barbara

An open house kicks off a public-comment period designed to help shape the future of the city

Ninth Circuit Court to Rehear Goleta Rent-Control Case

The appeal on 'regulatory taking' could determine the constitutionality of the city's ordinance

Bob Wilcher: Guaranteed Weight Loss

Eat 500 fewer calories and exercise for one hour each day and enjoy the results

Weather: Fair 57.0º


© Malamute Ventures LLC 2007-2010 | ISSN No. 1947-6086

Web Design & Development by PixelFive