Calif. to pay nearly $10 million on IOU interest

WEST SACRAMENTO — California taxpayers will pay nearly $10 million in interest on the nearly half a million IOUs the state has issued this summer.

The controller's office reported that it issued its final IOU on Thursday — to cover a $41.60 bill from Yellow Cab of Sacramento.

California ran short of cash this summer amid a budget deficit and was forced to hand out the warrants to vendors and contractors. The IOUs initially were to be redeemed beginning Oct. 2, but the controller's office determined the state could begin paying them one month sooner.

Friday marks the first day the state will begin redeeming them. Since July 2, California has issued 449,241 IOUs worth more than $2.6 billion.

If every one is cashed, the total interest paid by the state will be more than $9.6 million.