State still owes millions in IOUs 

Imagine this: You owe the state taxes and write them an IOU, but they lose track of it. If they don’t find or deal with it within a year, then you owe them nothing — your debt is absolved, and you go on your merry way, that much richer.

Sound unbelievable? It is.

The inverse scenario, however, is likely to happen to thousands of California residents and businesses in September.

The state began issuing IOUs, also called registered warrants, in July in response to a $2.8 billion cash shortage, Controller’s Office spokesman Jacob Roper said. They were issued until Sept. 3, and the treasurer began redeeming them the very next day.

For those two months, the state issued IOUs to taxpayers who were owed refunds, contractors who did work for the state and employees who were owed reimbursement for work-related expenses, among others.

About 20 percent of those people have yet to cash in their IOUs — although the total dollar amount they are owed is just 2 percent of the total cash owed by the state.

On Friday, the state controller and treasurer sent letters to the 89,000 people and businesses it still owes a total of $50 million to. Some 1,658 were sent to San Mateo residents and businesses, who the state owes $910,000 in total.

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Katie Worth

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