IOU Update #1 July 3rd
This is a excerpt from a CNNmoney.com article , go there to read the full article. We found it quite interesting and in context with the IOU mess.
NEW YORK (CNNMoney.com) — Here come the California IOUs.
Unable to meet its bills for the second time this year, the state started printing IOUs on Thursday. Some 28,750 IOUs worth $53.3 million will be issued initially, mainly for personal income tax refunds.
The IOUs helps the state controller stave off a deficit of nearly $3 billion for July. The state plans to send the IOUs to certain county agencies, small businesses and taxpayers owed billions of dollars.
The state’s fiscal condition is disastrous. Officials passed a budget in February, but declining tax revenues have opened up a $26 billion deficit.
Lawmakers and Gov. Arnold Schwarzenegger are locking horns over how to bridge the gap: The governor wants to use deep spending cuts and borrowing, and Senate Democrats are pushing tax increases and less-severe cuts.
Schwarzenegger on Wednesday declared a fiscal emergency, giving the legislature 45 days to address the crisis. He also ordered state workers to take a third furlough day every month.
On Thursday, however, it appeared progress had been made and a deal may be struck within days.