Is Found Money Real Money?
That might be what budget watchers are asking themselves after the state's tax amnesty program triggered a multi-billion dollar response from companies hedging their bets about what they really owe.
Controller Steve Westly updated the numbers this morning, which aren't that easy to understand. Overall, the amnesty program looks to have generated some $3.5 billion worth of money being deposited into the state's bank account.
But how much of that so-called found money is real? Last week, Westly said much of it came from businesses trying to avoid the amnesty program's steep penalties by filing a "protective claim"-- in other words, they sent in the money while also continuing to appeal their tax cases.
And if a company wins that appeal, the state has to give the money back.
Using that knowledge, the current numbers are much more down-to-earth: $675 million appears to be true extra money for the state, while $2.8 billion is "protective claim" money.
(Interestingly enough, Westly says 85% of that "protective claim" money came from only 100 large companies)
So, how much extra cash will the governor and legislators have to work with? No easy answers, although Westly believes more than half of the so-called "protective claim" cash will remain with the state.
If that comes to pass, there could be as much as $2 billion extra to solve the state's budget crisis. It's one-time money, true, but it would likely lead to numerous calls to lessen some of the most severe budget cuts now on the table.




