The California Controller’s Office began printing IOUs this afternoon in Sacramento so the state government can pay its bills. Controller John Chiang says without a balanced budget, there’s not enough cash on hand – so he had no choice but to go to IOUs. KPCC’s Julie Small watched as the promises to pay rolled off the printers.
Julie Small: The words on the front of these are “registered warrants.” They’re green in color – and they’re replacing cash. Today they expect to print 28,000 of the IOUs. They started this afternoon, and they’ll be printing until the wee hours of the morning. And they’re mailing them out as they finish them.
Alex Cohen: Julie Small says sending IOUs costs the state a lot of money.
Small: The Controller’s Office estimates it will cost an extra million for the state to monitor the disbursement of these IOUs. The paper they’re being printed on alone costs $160,000. So some extra added expense for California will incur because of having to print these IOUs.
Cohen: Some banks say they’ll accept the IOUs – but only until July 10th.