by Calculated Risk on 7/01/2009 04:07:00 PM

From the LA Times: Schwarzenegger orders third furlough day, proposes new cuts

Gov. Arnold Schwarzenegger this morning ordered state workers to take a third day off without pay each month ... If lawmakers and the governor do not agree on a plan to wipe out the deficit -- or at least part of it -- by the end of today, State Controller John Chiang will begin giving out IOUs in lieu of checks to pay debts owed by the state.

"We have one more day," Senate President Pro Tem Darrell Steinberg (D-Sacramento)

Here are the FAQs on IOUs (known as Registered Warrants). A few points:

6. Will my financial institution honor a registered warrant?
Recipients of registered warrants should contact their financial institution to determine whether they will honor the registered warrant before the redemption date.

7. What happens if my financial institution will not accept the registered warrant?
You may decide to open an account at another financial institution that will accept registered warrants, or you will have to hold the warrant until it matures on October 1, 2009.
...
9. Who will receive registered warrants?
The State in July will issue registered warrants, or IOUs, for all other payments, including those to private businesses, local governments, taxpayers receiving income tax refunds and owners of unclaimed property.

Most banks will probably accept warrants from established customers ...