State Treasurer Bill Lockyer has issued his seemingly annual warning: If the budget is not passed soon, the State will be forced to issue IOUs.

It wasn’t until the California Department of Finance commented, however, that we learned that the State will run out of cash in July. But spokesman H.D. Palmer warned that steps to defend the state’s cash on hand would need to be taken well before then.

The list of measures that could be used include IOUs or delaying tax refunds, he said.

From the Los Angeles Times:

State Treasurer Bill Lockyer warned Saturday that California could face the unwelcome prospect of issuing IOUs in April or May if legislators and Gov. Jerry Brown do not act quickly to solve the state’s fiscal problems.

The severity of California’s yawning budget gap, estimated at $25.4 billion, is widely known. But Lockyer’s comments, at a conference at UC Berkeley, were the first to suggest that the state government is staring at a more immediate cash crisis that could require IOUs.

The state last issued billions of dollars in the worthless scrip in 2009, causing a cascade of headlines around the world about the California’s fiscal dysfunction.

Read the full article here.