Report: Millions Could Get Tax IOU

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    NEWSLETTERS

    TK
    Millions of taxpayers may not get their tax refunds on time

    The Legislature's independent budget analyst is warning that millions of taxpayers may not get their tax refunds on time because of the state's cash shortage.

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    Legislative Analyst Mac Taylor issued a report Wednesday ahead of the governor's annual state address. It signaled California would fall into a cash abyss unless elected leaders act quickly on the state's $41.6 billion deficit.

    Taylor writes that the state controller will need to delay or issue IOUs on tax refunds. He notes that IOUs could bear up to 5 percent in interest costs to the state. The last time the state issued IOUs was in 1992, when many banks cashed the registered warrants for a short time.

    A spokeswoman for the California Bankers Association says banks have not made a decision whether they would accept IOUs.