Calif. May Issue Tax-Refund IOUs

SACRAMENTO, Jan. 14 -- California might delay tax refunds to more than 10 million taxpayers or even issue IOUs because the state is running out of money, authorities warned Wednesday.

It would be the second time the state has issued IOUs on tax refunds since the Great Depression, but the first time it would be felt widely because the delay comes in the middle of tax season.

The most populous state in the nation has a $41.6 billion deficit, and finance officials project the state will run out of cash in late February. The state controller will make a decision about the refunds by Feb. 1.

For Cheryl Hubbard, 62, a home care worker from Pasadena, a missing tax refund would throw another wrench in her already tight budget. "If we can't get our tax refunds, we can't pay our bills," said Hubbard, who is planning to use her refund this year to fix her car.