California treasurer warns of IOUs, if no cuts

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http://news.yahoo.com/s/ap/20110123/ap_on_bi_ge/us_california_budget

California treasurer warns of IOUs, if no cuts

By JULIET WILLIAMS, Associated Press t , Associated Press – 2 hrs

19 mins ago

BERKELEY, Calif. – State Treasurer Bill Lockyer says California could be forced

to issue IOUs as early as April or May if state lawmakers don't cut state

spending soon.

Lockyer, a Democrat, said Saturday that California could run short of cash as it

faces a $25.4 billion deficit through the end of June 2012, including an $8.2

billion gap in the fiscal year that ends in July.

He says if the Legislature fails to address what he termed a " substantial

shortfall, " California will run out of cash to pay the bills.

Gov. Jerry Brown has proposed $12.5 billion in cuts and borrowing, and wants to

ask voters to extend a series of temporary taxes in June.

Brown spokeswoman Ashford said Lockyer's comments underscore the

urgency of Brown's March budget deadline.