Lawmakers first in line for IOUS

Sacramento Bee ^ | 12/30/8 | Steve Wiegand

[SmithL]

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 state income taxpayers awaiting 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."

The controller advised state agencies to rework their accounting systems now to take people and firms paid for by direct deposits and eligible to be paid with IOUs off the systems, because the warrants must be issued on paper.

Chiang spokeswoman Hallye Jordan said that whether IOUs would be needed - and how many - would depend on several factors, including how fast the governor and lawmakers can reach a deal and how much the state collects in tax revenues in December.

Jordan said the first group to get IOUs would be the state's 1,700 elected officials and their staffs. That number includes constitutional officers, legislators and judges.

"But we may also have to defer or use IOUs to pay tax refunds," Jordan said. "That's a big concern, because that doesn't help re-start the economy if we don't have the money in people's pockets."

[Psycho_Bunny]

How is it that no one’s been tarred and feathered yet?

[absalom01]

But we may also have to defer or use IOUs to pay tax refunds

I'm gonna go out on a limb here, and guess that failing to cough up refunds to taxpayers is NOT going to make it easier to argue that tax increases are needed.

[pointsal]

...
let me explain... tar is a processed petroleum product, it’s use is regulated...Ergo, no one living seems to know what to do with tar other than go to La Brea.

feathers.... well, after the ballot amendment of the consitution for the goofy state of California, the retention of feathers is probably protected by PETA. Who wants to diddle with lefties from Santa Monica?