Banks Won't Honor Calif. IOUs

(NEWSER) - After joining other major banks in snubbing cash-strapped California last month, JPMorgan Chase has changed tack and is lending the state $1.5 billion to end its IOU program a month early. The short-term loan will enable California to start redeeming on Sept. 4 the IOUs it has been using since July to pay vendors and creditors, the LA Times reports. More»

(NEWSER) - California's recently issued IOUs are only the latest in a long history of dollar substitutes in America, the Wall Street Journal reports, and they're already being eyed by collectors of temporary currency on everything from leather to plywood to old tires to clamshells. Schwarzenegger's scrip is plain in comparison to Depression relics like Minneapolis' "sauerkraut note," but the IOUs are unusual in that they're made out to individual creditors for specific amounts. More»

(NEWSER) - Thousands of Californians still waiting for their state tax returns will open their mail to find an IOU instead of a check. Unable to close a gargantuan budget deficit, the state began printing a $53 million batch of IOUs this afternoon, the Los Angeles Times reports. Some banks have agreed to accept them, at least for the time being. More»

(NEWSER) - California’s finances are so dire that the state controller says he’s going to have to start doling out IOUs to creditors soon, reports the Los Angeles Times. Likening the situation to the Great Depression, John Chiang says he’ll have to issue IOUs to social-service agencies, private contractors, vendors, and others starting July 2 unless Gov. Schwarzenegger and state lawmakers close a $24 billion deficit. More»

State budget may fall short by as much as $23B

(NEWSER) - California could be broke by July if voters reject a handful of upcoming budget proposals, the Los Angeles Times reports. Officials predict the state will fall as much as $23 billion short if the unpopular propositions fail. To save money, the state may commute the sentences of 38,000 “low-risk” prisoners—including all 19,000 illegal immigrants currently in custody in California, who would be turned over to immigration authorities. More»