WSJ: California To Issue IOUs July 2 If No Budget, Cash Resolution

[steven johnson]

California, as usual, leads the nation in economic trends -- this time in a race to the bottom.

With a new fiscal year about to begin next Wednesday, and hamstrung by a still-unbalanced budget and a continuing cash shortage, California State Controller John Chiang said he will have to issue IOUs starting July 2 if immediate solutions aren't quickly adopted.
The IOUs, which would carry a still unspecified interest rate, would be issued for all general fund payments other than those categories protected by the state constitution, federal law and court decisions.
Affected by issuance of what are technically called "registered warrants" would be payments to local governments for social services, private contractors, state vendors, income and corporate tax refunds and payments for state operations including legislative per diems, Chiang said in a press release.
"Next Wednesday, we start a fiscal year with a massively unbalanced spending plan and a cash shortfall not seen since the Great Depression," Chiang said.



California To Issue IOUs July 2 If No Budget, Cash Resolution
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[Skink]

1. What a coincidence.

that's when I start issuing IOUs.

[bluestateguy]

2. And of course the children in the legislature won't get their budget approved on time, again

and then the demands will come upon Obama for a bailout (including from many here at DU), and when he says no, the whole thing will be made out to be his fault.

[damntexdem]

3. Oh, the yearly California IOUs.

The difference is that this year, California likely won't be able to redeem them.