California Puts an End to IOU's

August 13, 2009 12:00:00 AM PDT
The California controller says the state can stop issuing IOUs to vendors on Sept. 4, a month earlier than he expected. The decision came after meetings between Controller John Chiang, Treasurer Bill Lockyer and Gov. Arnold Schwarzenegger's financial advisers. They needed to review California's cash flow and assess investors' appetite for buying California bonds.

When Schwarzenegger signed California's revised $85 billion budget two weeks ago, it gave the state the leeway to seek short-term loans to cover its daily expenses, ending the need for the IOUs.

Chiang says the state will need to borrow $10.5 billion for the coming fiscal year.

He's also recommending the state start redeeming the $1.95 billion in IOUs on Sept. 4.

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