In the News: Blame Games
July 13th, 2009
Copyright © 2009 Integrated Profitability TM
Given California’s financial and budget predicament, the press is full of articles about the crisis, its causes, status, what is happening and, more often, what is not happening.
One particular article has something so incredible that, in my opinion, it warranted an interruption in the current series on Cash Flow. It definitely affects cash flow. A short interruption for “Breaking News…”
The article, “Banks’ plan to refuse state IOUs takes heat,” was on page A9 of the Contra Costa Times on July 9, 2009 (Thursday). The focus of the article was on how and when certain banks were going to handle California State’s IOUs. The main thrust was that since the banks have benefited from government bailouts, if they didn’t participate in California’s IOUs then there would be a backlash.
Let’s set the playing field. Not level it—just make sure we know what game we’re playing and what the rules are.
In the News: Cash Flow
June 25th, 2009
Copyright © 2009 Integrated Profitability TM
Apparently, Cash Flow is an important topic for just about every type of organization. Including the government of our fair State of California. The lead headline in yesterday’s Contra Costa Times was about the current state budget crisis: “In state senate, it’s high noon.” (Note: the Contra Costa Times website has a different title for this article: “Democrat lays down gauntlet: vote for cuts”)
On Monday in “Cash Flow: Revenue (Timing),” the current series of the Small Business Finance & Profitability blog started on ideas for improving cash flow from the revenue side of the equation. The State of California is right there:
“Democrats have proposed about $9.8 billion in one-time revenues such as accelerating withholdings on personal, corporate and independent contractors’ earnings,…”
Sound familiar? It should. It’s a revenue timing move. As pointed out in Monday’s article, timing only temporarily helps cash flow. This proposal (which didn’t exactly sail through the legislature) doesn’t change the amount of revenue that is owed to California or how much the State is going to end up collecting for the year, but it does cause taxpayers to pay earlier. Which helps California’s cash flow as soon as the higher withholding goes into effect.
However, because it doesn’t really increase state revenue, I disagree with labeling this move a proposal of “…one-time revenues…”
Subscribe to our blogs using either our 
