I mean this is pretty much the same thing right? California Issuing its own paper...doesnt matter much if its called an IOU or a California dollar. Its still worth the same thing. Nothing.
Interesting, it's forbidden by Article I of the Constitution: Section 10, Clause 1 (Contracts Clause): No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts;
They've done it before. "California last issued the IOUs in 1992 when lawmakers and then-Governor Pete Wilson deadlocked on a budget for 61 days past the start of the fiscal year. "
Yep. And when you require 2/3 rd's majority in order to pass a budget, this is what can unfortunately happen.