Business & Economy

California will start issuing IOUs tomorrow to pay its bills

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The state of California will distribute IOUs tomorrow to pay some of its bills. There’s some confusion about who will get cash &ndash and who will get the IOUs. KPCC’s Shirley Jahad says the state controller has some answers.

Shirley Jahad: State Controller John Chiang’s office has set up a toll-free hotline that can provide answers and information on who will get the IOUs. The automated line starts by explaining the state is $3 billion behind this month and can’t pay its bills.

Controller’s IOU hotline: The state must issue registered warrants or IOUs to private businesses, local governments, taxpayers receiving income tax refunds, and owners of unclaimed property.

Jahad: California will make payments required by the state constitution or court order. So money for education, debt service, state payroll and Medi-Cal providers will go forward as usual.

Thanks to a save from the federal government, seniors and people on disability will get their checks as usual. The federal social security administration is coming up with the extra cash to cover the state’s portion of SSI payments. And anyone out of work will still get unemployment checks because that money comes from a special fund.

The IOU hotline phone number is 1-866-267-4255.