California IOUs: Lockyer Warns Of Impending Budget Shortfall
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 Elizabeth Ashford said Lockyer's comments underscore the urgency of Brown's March budget deadline.