How to pay for bailouts, tax cuts, and welfare: Lessons from California

California controller to suspend tax refunds, welfare checks, student grants

...Chiang said he had no choice but to stop making some $3.7 billion in payments in the absence of action by the governor and lawmakers to close the state's nearly $42-billion budget deficit...

The controller said the suspended payments could be rolled into IOUs if California still lacks sufficient cash to pay its bills come March or April...

State officials have already designed an IOU template, Chiang said, and have been negotiating with banks over whether taxpayers could cash or deposit them if they are issued.

-LA Times