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California IOUs: Lockyer Warns Of Impending Budget Shortfall

Bill Lockyer Jerry Brown

JULIET WILLIAMS   01/22/11 11:50 PM ET   AP

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.

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Filed by Anna Almendrala  |