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Calif. prepares to issue IOUs

July 1, 2009 12:00:00 AM PDT
California's controller will start paying the state's bills with IOUs as soon as Thursday.Governor Schwarzenegger was none too pleased the Legislature failed to send him a budget revision before the fiscal year ended at midnight. He blasted lawmakers for the last four weeks they spent poring over his proposals.

"They decided to have endless amounts of hearings and debates, finger-pointing and assign blame. At the end of the day, nothing was accomplished," said Governor Schwarzenegger.

To move things faster, the governor:

  • Declared a fiscal emergency forcing lawmakers to act within 45 days or else they cannot adjourn
  • Ordered a third unpaid furlough day for state workers
  • Vowed not to sign any new laws until the deficit is fixed
The governor told lawmakers they have to get serious.

"In the midst of a budget crisis, they're debating about cow tails," said Governor Schwarzenegger.

And sure enough, we did find the Agriculture Committee discussing a bill that would make it illegal to cut off a cow's tail.

The missed deadline almost makes certain California will not be able to pay most of its July bills and that IOUs will go out Thursday.

Assembly Republicans introduced a bill that would allow Californians who receive IOUs to be able to pay almost any state fee or taxes with that IOU.

"This doesn't solve the problem but the burdens of this state shouldn't fall on them. They didn't do anything wrong. They shouldn't be punished for it," said Assemblyman Joel Anderson (R-La Mesa).

Meanwhile, that third furlough day means most state offices will close on the first, second and third Friday of each month.

Workers are angry because that basically amounts to a 14 percent pay cut.

"It's not just not going to the movies. This is money we need for food. It's money we need for rent. It's money we need for utilities. We need this for tuition," said Meredith Cox, a state worker.

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