California might pay IOU instead of income tax refund?

According to a news report, California may issue some sort of IOU instead of cash for state income tax refunds.

If you expect you’ll be getting a refund from California when you file your 2008 state income tax return, be prepared: you may instead receive a “registered warrant.” Translation: an IOU.

California is rapidly running out of money. Blame it on the state budget deficit that continues to bleed billions of dollars from California’s reserves. Facing inadequate credit to make up the difference, California’s Controller John Chiang warns that by the end of February, the nation’s most populous state may not be able to pay some of its debts, and instead be reduced to issuing those creditors IOUs.

That’s remarkable. The State Assembly has run this state into the ground, spending way too much and giving into the unions and special interests. It’s finally catching up, spending more than we have. The size of the state budget has increasing disproportionately to revenue and population for the last several years. The politicians are incompetent, and the eceonomic mess is unmasking their idiocy.