California ready to issue IOUs - 11:36AM

California ready to issue IOUs Full link here The controller's office is set to begin printing the scrip this afternoon, the first time in 17 years. Some 28,742 IOUs worth $53.3 million will be sent, mostly to residents awaiting tax refunds. By Eric Bailey 7:03 AM PDT, July 2, 2009 Reporting from Sacramento — With budget negotiators at a loggerheads and California government facing a cash crisis, the state controller's office will start printing IOUs this afternoon for the first time in 17 years. The presses are set to start at 2 p.m., churning out 28,742 IOUs worth $53.3 million that will be dispatched mostly to residents throughout the state still awaiting their income-tax refunds. A panel of state finance officials will meet this morning to set the interest rate for banks and other financial institutions that decide to accept the IOUs. Some banks have agreed to honor them, including Bank of America, which will do so until July 10. Other banks have not made a decision. The move comes little more than a day after Senate Republicans, with the support of Gov. Arnold Schwarzenegger, blocked an 11th-hour attempt by Democratic leaders to push through a slate of bills that would have staved off the IOUs. With the California economy hobbled, tax receipts waning and the budget deficit continuing to swell, the governor Wednesday declared a fiscal emergency, and ordered state workers to take a third unpaid furlough day each month. He also issued a new list of cuts to schools and public universities to address a deficit that his finance team now says has swelled to $26.3 billion. Schwarzenegger's latest cuts are designed to pare state spending by an additional $4.9 billion.

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