Calif. May Need to Issue IOUs Next Week

(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) - Major banks in California, including Bank of America and Wells Fargo, will stop honoring the state's IOUs after today, reports the Los Angeles Times. While some credit unions may cash the promissory notes, taxpayers and vendors who need cash may be tempted to sell them on the cheap to third-party speculators eying the tax-free 3.75% interest they bear. To rein in speculation, the SEC has ruled that IOUs are securities under federal law, and therefore can only be traded by registered dealers. More»

Outgoing gov must convince Calif. voters to endorse budget fixes

(NEWSER) - Deep into Arnold Schwarzenegger's second term, the novelty of holding political office has given way to the hard realities of governing, the New York Times reports. In the eyes of his constituents, too, the Governator’s celebrity sheen has faded, enough that Schwarzenegger is worried about the passage of several ballot initiatives he has proposed to fill critical gaps in California’s budget. More»

Facing $42B deficit, Schwarzenegger, state Dems continue to wrangle

(NEWSER) - Faced with a mounting budget gap and failed negotiations toward a solution, California may have to send out promissory notes to taxpayers owed refunds and local governments, the Los Angeles Times reports. Talks between Gov. Arnold Schwarzenegger and the Democratic legislature foundered yesterday; lawmakers sent the governor a disputed package of tax hikes and service cuts, which he promptly vetoed. More»

Salary cut to minimum wage sparked rage of powerful union

(NEWSER) - A union of angry California peace officers vowed today to recall Gov. Arnold Schwarzenegger, the Sacramento Bee reports. The guards have struggled with the Governator over pay and prison policies, and lost patience this summer when he cut salaries to minimum wage. “It's gone beyond professional,” union spokesman Lance Corcoran said. “It’s gotten to personal.” More»