California's fiscal emergency deepened Thursday with the announcement that the state will send nearly 30,000 IOUs to its creditors, reports the San Jose Mercury News. Recipients will receive 3.75 percent interest on their notes. Though unconventional, IOUs—formally called registered warrants—are not unprecedented for California; the last time they used the was in 1992. At a news conference, Gov. Arnold Schwarzenegger said the state's budgetary woes are the fault of Democrats who insist on prioritizing labor support instead of the state's fiscal needs, whereas Democrats say Schwarzenegger is pushing for too ambitious a budget. "We don't have the money to pay our bills," the governor said. "It's a sad story."
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