California set to issue IOU’s as fiscal crisis continues

Wed Jun 24, 2009 10:00pm EDT

By Dan Whitcomb and Ciara Linnane

LOS ANGELES/NEW YORK (Reuters) – California’s controller said on Wednesday that he would have to issue IOUs in a week if lawmakers can’t quickly solve a $24 billion budget deficit, and the state’s treasurer plans to tap a reserve fund to meet debt service costs.

The measures came as a budget crisis deepened in the most populous U.S. state and the gridlocked legislature failed to pass a proposed $11 billion in cuts.

California set to give out IOU’s