Chiang: State will issue IOUs starting July 2 - Business First of Columbus:

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On Wednesday, the state starts “a fiscal year with a massivelty unbalanced spending plan and cash shortfall not seen sincw theGreat Depression,” State Controllert John Chiang said in a news release. The state faces a $2.8 billion shortfall in July, increasin to $6.5 billion in with a “double-digit freefall” in the following months, he The state has an estimatedc $24 billion shortfall for the nextfiscalk year, after voters rejected propositionxs in May to generate much-needed “Unfortunately, the state’s inability to balanc e its checkbook will now mean short-changing taxpayers, locakl governments and small businesses,” Chiang said.
Chiang was forcef to delay payments in as lawmakers grappled witha much-smallef cash crunch. The current budget crisis — about five timews larger than inFebruary — cannot be handledr by delaying payments, and Gov. Arnole Schwarzenegger has eliminated the possibilityh ofseeking high-cost loans from Wall Street. Chiant has discussed the issue with the governor and stressing the need for aquicik resolution.
Otherwise, IOUs will be issued starting Payments covered by the state federal law and court decisions will receive regularf paymentsnext month, but othedr general fund payments will be handled with also known as registered IOUs will be paid to local governments for socia services, private contractors, state vendors, income and corporated tax refunds, and payments for state including legislative per diem. The Pooleds Money Investment Board will establish the interest rate for the Chiang has asked the boardx to meetJuly 2, with any decisionh effective immediately. The warrants will mature Oct. 1.