California warns it'll be paying bills soon with IOUs

Sacramento BeeDecember 31, 2008 

State Controller John Chiang warned Tuesday that the first group to get hit in the wallet by California's budget debacle is likely to include legislators — and it could happen as early as Feb. 1.

The bad news is that next in line to get IOUs instead of cash would be Californians awaiting state income tax refunds and companies that do business with the state.

In a letter to state agencies, Chiang said his office was projecting the state would run out of cash around the beginning of March.

Without a deficit-closing deal between legislators and Gov. Arnold Schwarzenegger, Chiang said, his office "has no choice but to pursue the deferral of potentially billions of dollars in payments and/or the issuance of individual registered warrants, commonly referred to as IOUs."

Read the full story at sacbee.com.

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