State warns of coming IOUs

The failure thus far of lawmakers and the governor to wipe out any of the state’s projected deficit of nearly $42 billion leaves California just weeks away from running out of the cash needed to pay all its bills.

On Tuesday, state Controller John Chiang sent a letter to government agencies advising them of who the state won’t pay when coffers run dry.

Californians may not be so troubled by who is on the top of the list to get IOUs instead of cash: state lawmakers – the folks who brought us this mess.

But legislators are not the only ones who would be stiffed. Any Californians expecting a tax refund from the state would be out of luck until the cash crisis is resolved. Some payments to doctors would be put on hold, as would some grants to students.

Chiang's office said the state may start issuing the IOUs in lieu of cash as soon as Feb. 1. An $18-billion package of tax hikes and program cuts that Democrats pushed through the Legislature earlier this month would have kept state accounts from running dry.

But Gov. Arnold Schwarzenegger said he will not sign that budget package until it is modified to include more cuts in services, the privatization of government infrastructure projects, and other measures he says are needed to stimulate the economy.

--Evan Halper

Comments

[deBeer]

Let it all come down. No meaningful cuts, just smoke and mirrors. Bloated salaries, pensions and perks. No cutbacks on services to illegal's. In fact Arnold is encouraging banks to help out illegal's. The taxpayer has had enough. Either cut to the bone and live within our means or let it collapse so it has to be run correctly. My guess is everyone is waiting for Barry O to bail us out..like money from the fed's is not taxpayer money.

[Rosee]

Well..Californians voted for him!
He doesn't care about the worker or their health. You were given a preview with his Worker's Comp reform....a big thumbs up to the insurance companies and leave the worker out in the cold.
So when he starts cutting the programs that you care about...remember...you voted for him!!

[rich mckone]

They should (but will not) cut prison system waste! - Contracting with counties to provide parole supervision, with local courts handling technical parole violations, saves about $500 million annually. Increasing the percentage of prison contract beds from the current low 4% to about 9% (like Texas) eliminates the actual prison overcrowding reported by the Legislative Analysist and avoids spending any of the $6.5 in prison construction bonds. It is not complicated except for the influence of the prison employee unions.

[Byron]

What a pity that we here in California, and in the United States as a whole have become about as divided a people as the Arabs and Israelis. Republicans and Democrats who despise each other with a passion, fed by the likes of hate-mongers like Rush Limbaugh who continue to spew forth their vile bile on a daily basis to an audience of slack-jawed knuckle-draggers. And they lap it up. It's high time that we end this uncivil war and take a hard look at the issues. We might find that we've been fed a pack of, er, misinformation we'll call it over the past couple of decades or so, streaming from rightwing think tanks feeding at the corporate trough. I hope that Obama can bring about real change but if so it won't be without pain. Courage.

[Byron]

What a pity that we here in California, and in the United States as a whole have become about as divided a people as the Arabs and Israelis. Republicans and Democrats who despise each other with a passion, fed by the likes of hate-mongers like Rush Limbaugh who continue to spew forth their vile bile on a daily basis to an audience of slack-jawed knuckle-draggers. And they lap it up. It's high time that we end this uncivil war and take a hard look at the issues. We might find that we've been fed a pack of, er, misinformation we'll call it, over the past couple of decades or so, streaming from rightwing think tanks feeding at the corporate trough. I hope that Obama can bring about real change but if so it won't be without pain. Courage.

[John]

Smoke and Mirrors has been the method of legislators, City Mayors, and Public Offices for over 100 years in CA.

Many thousands of residential RENTERS have had State Issued IOU's the entire year of 2008. Medical Elderly have had their medical cut and denied, soon Tax Refunds will get the same IOU's

Look at who you elected to State Public Offices, they are your Salvation to bankuptcy in 2009. Illegals are never going to lose $$$ in Cities like LA and SF, the big sanctuary cities of CA.

[ckt]

i could not be married to a man like him. he has made a mess a ghetto mess of california. it is time for him to go!!!!!!