IOUs Cost Taxpayers Nearly $10 Million

California to pay nearly $10 million on IOU interest

Friday, Sep 4, 2009  |  Updated 7:00 AM PDT
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IOUs Cost Taxpayers Nearly $10 Million

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The state couldn't afford to pay, now you have to pay interest.

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California taxpayers will pay nearly $10 million in interest on the nearly half a million IOUs the state has issued this summer.

The controller's office reported that it issued its final IOU yesterday to cover a $41.60 bill from Yellow Cab of Sacramento.

California ran short of cash this summer amid a budget deficit and was forced to hand out the warrants to vendors and contractors. The IOUs initially were to be redeemed starting Oct. 2, but the controller's office determined the state could begin paying them one month sooner.

Today marks the first day the state will redeem them. Since July 2, California has issued 449,241 IOUs worth more than $2.6 billion.

If every one is cashed, the total interest paid by the state will total more than $9.6 million.

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