Paying taxes with California IOUs?

July 8, 2009

From the AP via the Sacramento Bee, it looks like a lawmaker is proposing that California follow the Argentine model.

From AP:

State vendors and contractors could use their government-issued IOUs to pay state taxes, fees and liens under a bill approved by an Assembly committee.

The Business and Professions Committee unanimously passed the bill by Assemblyman Joel Anderson during its first legislative hearing Tuesday. The bill requires the state to accept its own IOUs as payment for money owed to the government.

This would make the IOUs look and feel much more like currency.  As things stand, the only institutions accepting the IOUs are banks, but the majors like Bank of America, Chase and Wells Fargo have said they will only deposit them for customers until Friday.

It’s doubtful that this bill will gain much traction, though, since it would undermine the governor’s resolve to pressure lawmakers to close the $26.3 billion budget gap.

All of this is academic of course if those promised the IOUs don’t get them. The NYT’s reports that many vendors promised warrants haven’t received them yet.

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