Furloughs Return to California; Are IOUs (Registered Warrants) Coming in September?

Governor Schwarzenegger announced yesterday that he has reimposed mandatory furloughs on state workers. Beginning in August there will be three furlough days a month for most state employees. These days are without pay and are a means of helping to close the budget gap.

Of course, the problem is that there is no budget. The reason is simple: Democrats in Sacramento don’t want to cut programs and/or employees of their major constituencies. Regardless of Democratic politicians’ desires, those cuts are coming; the easy “low-hanging fruit” is all gone.

Meanwhile, State Controller John Chiang is warning that unless there’s a budget by September he may be forced to issue Registered Warrants (aka IOUs). There are no budget talks currently scheduled.

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