California IN BRIEF : SACRAMENTO : 41,000 State IOUs Still Not Cashed In

About 41,000 state IOUs worth $39 million still haven’t been cashed in, and officials wonder if some people mistakenly believe they are still accruing interest. The promissory notes issued because of the state budget crisis last summer stopped earning interest in early September, when the state passed a budget 63 days late and started paying bills with real checks again. Treasurer Kathleen Brown is urging holders to “send me your IOUs.” Most recipients cashed the IOUs as soon as they were able. During the budget impasse, the state remitted 1.6 million IOUs with a face value of $3.8 billion. To compensate the recipients, the state paid interest on the notes at an annual rate of 5%, but interest earnings stopped as of Sept. 3, at the latest. Some of the notes may have stopped earning interest as far back as Aug. 4, depending on when they were issued.