Only some programs can legally be offered IOUs instead of payments and, if the step is taken, the payment deferrals would affect, among other programs, payments to 1,700 legislators and state officials, including the controller, as well as the California Student Aid Commission, which funds the Cal Grant program, Casaleggio said.
If there were to be any disruption in funds for Cal Grants — scholarships that help California students cover the costs of colleges, universities or technical institutes — the results could be devastating for some families, Krekorian said.
“Families who are depending on this money to be able to give their child the opportunity to go to college are going to be badly hurt,” Krekorian said.
“And for some of these families, that may mean deferring college for a year or longer, and that may mean that that child may never get the opportunity to go to college.”
Officials in charge of Cal Grants could not be reached for comment on how IOUs might specifically affect current and future grants.
Any concerns about Cal Grant funding and IOUs for other agencies could have been avoided if the problem was solved after the Legislature passed a recent proposal to close the deficit, Krekorian said. Schwarzenegger, however, has not signed the proposal.
“The issue is that because of the governor’s refusal to join with us on the economic plan that we enacted two weeks ago, lots of people in Southern California are going to suffer terribly because the state is going to run out of money,” Krekorian said.
Schwarzenegger’s 2009-10 budget proposal will also raise problems for schools, Glendale Unified Supt. Michael Escalante said.