Attention IOU holders: California wants to give you back your money

You have until September to cash them; after that, the money stays in the treasury

By Jesse McKinley | The New York Times

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SAN FRANCISCO — Somewhere high in the snowy, mountainous wilds of Alpine County, Calif., there is a Californian with a piece of paper worth $1,305.

This person is not alone. Across the state, 89,000 residents and businesses — including 2,315 here in San Francisco alone — are sitting on some $50 million in uncashed IOUs from the state, a souvenir of California’s most recent, but by no means its last, budget crisis.

John Chiang, the state controller, promised Thursday to contact every one of the nonredeemers in an effort to “close an ugly chapter in California fiscal history.” Chiang practically begged them to drain the treasury.

Click here for more information on how to redeem IOUs
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“We have your money,” he said. “Ask for it. We want to give it back to you.”

All told, the state issued about 450,000 IOUs valued at more than $2.6 billion to taxpayers, vendors and contractors in July after it failed to close a budget gap on time and started to run out of money.

The state started redeeming the IOUs, with interest, in September after a budget was passed, but some people apparently did not get the message.

Chiang speculated that some residents might have been confused by the IOUs, which were labeled as registered warrants, the bureaucratic parlance for the notes. Or, he said, “they might have other things on their mind.”

Nowhere is the problem more acute than in Los Angeles County, where there are some 23,000 IOUs lying around, worth almost $10 million.

Residents have until Sept. 3 to cash the IOUs. After that, the state will not honor them and the money will remain in the treasury.

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