California to issue IOU’s

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Tell Arnold to make them eligible for payment of state taxes and they can forever use the IOU’s for state purchases in place of $US

July 1 (Reuters) — California prepared on Tuesday to resort to issuing IOUs as the giant but cash-strapped U.S. state struggled to approve a new budget in time for the new fiscal year that begins on Wednesday.

The IOUs, which are notes promising payment to vendors and local agencies, or shutting down some public services, are among measures that California and other states may have to rely on as they contend with staggering budget gaps caused by the U.S. recession.