To those who do business with government... (CA, at least)

[Manedwolf]

Found on a business forum, pointed to by a horrified small business owner out there who has some state contracts.

Well. I'd call this disincentive for a small business to do business with the government. What are you going to do about it if they won't pay? They're the government. They make the rules. So...

Controller to Delay Certain Payments for 30 Days
To Preserve Cash for Schools and Other Legally Protected Expenditures

With no signs of an economic recovery in sight, it is critical that the Governor and the Legislature enact a sound budget solution that provides much-needed cash by February 1. If not, the State will be $346 million in the red at the end of February, and $5.2 billion in the red in April.

In order to preserve cash for education, debt service and other payments that are deemed by the State Constitution, federal law or court rulings as having first claim to available General Fund cash, the Controller announced he will begin delaying, for 30 days, payments to all other programs that are funded out of the State’s depleted General Fund.

Those payments that will be delayed include thousands of payments to businesses for services and products they provide to the State; to assistance for more than a million aged, blind and disabled Californians that goes to pay their rent, utilities, or put food on their tables; to State agencies that use the payments to fund critical public services, ranging from public safety to health and welfare.

http://www.sco.ca.gov/eo/fiscalissues/payments01-2009a.shtml

Seriously, what could you do about that? And what are you supposed to do if you needed that payment to keep your own business running? You going to sue a bureaucracy? Good luck.

Ick.

[charby]

see what happens when people rely on their government to live?

[Dannyboy]

What, you don't think that other large corporations around the world don't do the same thing to smaller businesses?  Nothing new. 

[AZRedhawk44]

Seriously, what could you do about that?

Sell the debt to a collections agency.

[Manedwolf]

What, you don't think that other large corporations around the world don't do the same thing to smaller businesses?  Nothing new. 

World, perhaps. In the United States, they can be charged with fraud and breach of contract, as specified in laws. They'd be liable for damages if you had a contract. The AG where the business is based will also generally not be pleased with that sort of shenanigans.

The government makes the laws. If they decide not to pay, the AG isn't going to go after their own boss...what can you do?

Sell the debt to a collections agency.

But wouldn't that be for pennies on the dollar?

[Werewolf]

This is nothing new. The government has been stiffing folks it does business with for a long time.

One of my Uncles ran a janitorial service in TX back in the 70's. A number of contracts were with various government agencies to clean the buildings they were in.

On average it took 3 to 6 months to collect money from the government. He always got paid but it was difficult to plan when half your business was with a customer who never paid when due and was always late by 3 to 6 months.

Eventually he wised up and just told the goobermint to go F themselves and found new customers that actually paid their bills on time.

[Viking]

Found on a business forum, pointed to by a horrified small business owner out there who has some state contracts.

Well. I'd call this disincentive for a small business to do business with the government. What are you going to do about it if they won't pay? They're the government. They make the rules. So...

http://www.sco.ca.gov/eo/fiscalissues/payments01-2009a.shtml

Seriously, what could you do about that? And what are you supposed to do if you needed that payment to keep your own business running? You going to sue a bureaucracy? Good luck.

Ick.

If they won't pay you what they owe you, I suppose one has to take what one is owed somehow.

[FTA84]

Maybe it is mean -- but I am kind of glad to see California in the decline it is in.

It is one of the benefits of having many divided states versus one unified country.  Maybe the minicrash in California and the following max exodus of people with money will let the rest of the country know the consequences of mismangement.

One just has to hope the fed.gov doesn't get involved and stop this version of state competition.

[Northwoods]

World, perhaps. In the United States, they can be charged with fraud and breach of contract, as specified in laws. They'd be liable for damages if you had a contract. The AG where the business is based will also generally not be pleased with that sort of shenanigans.

Where have you been?  I know for a fact that all of the big aerospace companies stiff small suppliers all the time.  Boeing, Raytheon, Lockheed, Northrup all do it (the first two I've heard first or second hand accounts).  They set a contract for a part and demand delivery (so they can inspect it) before payment.  Part passes inspection and the company tells the small shop they're only going to pay 50% of the agreed price.  Small shop complains.  Big company says "Sue me".  Small company tries, but the big company's legal department buries them in paper to the extent that they cannot afford to continue the effort.

[Scout26]

Pahhhh, this is nothing..... Illinois (THE Deadbeat State) is averaging 180-270 days on payments to it's vendors (especially healthcare providers).  Many of whom are no longer accepting Medicare/Medicaid/Sate Provided Coverage patients.

Someone again, explain to me how single payer/socialized medicine will fix the healthcare "problem".

[RadioFreeSeaLab]

California is going to delay tax refunds this year, at least 30 days.  Probably they'll send out IOU's, and never pay them.
I wonder, can I send them an IOU if I owe money this year?

[Manedwolf]

California is going to delay tax refunds this year, at least 30 days.  Probably they'll send out IOU's, and never pay them.
I wonder, can I send them an IOU if I owe money this year?

When they do it, it's "witholding". When you do it, it's "fraud", and they send people to kick in your door and shout at you and put handcuffs on you.

[RadioFreeSeaLab]

You just explained why I believe taxation is theft, and government is evil.

[Manedwolf]

You just explained why I believe taxation is theft, and government is evil.

Well, if we were allowed to go to the capitol, kick in the door, shout at lawmakers and put handcuffs on them, I'd feel a lot better.

[Scout26]

Well, if we were allowed to go to the capitol, kick in the door, shout at lawmakers and put handcuffs on them, I'd feel a lot better.

We can......just bring LOTSA friends.....

[El Tejon]

Mane, as a small business owner who has had this happen (judge's not paying on appointed work, civil and criminal) I can tell you what I do:  sit and wait.

Charby has the right answer.  Ensure that you have a diverse business base so you don't become dependent.

[El Tejon]

Someone again, explain to me how single payer/socialized medicine will fix the healthcare "problem".

O.K., if you really want me to.  Glad I can be of use.

Socialized medicine will fix the healthcare "problem" by:

1.   rationing services=>http://online.wsj.com/article/SB123060332638041525.html

2.  increasing disqualifiers:  a worker ant, er, citizen, will be denied services if they engage in dangerous activities such as sky diving, smoking, owning firearms or voting Republican.