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California to Stop Issuing IOUs

August 13, 2009 By News Report

"While we can finally put an end to this difficult, and frankly, shameful chapter in the state's history, it does not bring an end to our fiscal challenges." -- John Chiang (pictured)

California Controller John Chiang today said that the state will cease issuing IOUs on September 4. The state -- which failed to enact a budget until July 28 -- thus closed out a $21 billion budget deficit. The state ran out of money following voter disapproval of revenue-generating measures, and began issuing IOUs on July 2.

"The State of California owes a debt of gratitude to the thousands of individuals and businesses that were forced to bear the brunt of the state's chronic fiscal mismanagement," said Chiang in a release. "Along with short-term loans that are routinely obtained in the fall, this spending plan should provide sufficient cash to meet all of California's payment obligations through the fiscal year.

"While we can finally put an end to this difficult, and frankly, shameful chapter in the state's history," continued Chiang in a statement, "it does not bring an end to our fiscal challenges." The state still needs to borrow another $10.5 billion to make ends meet.

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Budget Deficits Put Government's Sacred Programs Under Scrutiny

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