California State Controller John Chiang sent a letter to all state agencies stating that beginning in February, billions of dollars of expenditures could end up being paid with individual registered warrants, better known as IOUs. Expenditures affected by the announcement include bank, corporate and personal income tax refunds, legislator and legislative staff salaries, university grants, Medi-Cal payments, and court-appointed counsel fees. Chiang spokeswoman Hallye Jordan told the Sacramento Bee that the first group to get IOUs would be the state’s 1,700 elected officials and their staffs. She also said the situation could change should the governor and legislators come to a budget agreement soon. If tax revenues are higher than expected in December, that could also impact the need for the warrants. “This is absurd,” said Carl Raggio, president of Western Commercial Bank in Woodland Hills. “It certainly doesn’t help with the capital issues that banks have to deal with today.” He said that his bank would accept warrants on a customer-by-customer basis and hold the IOUs with the presumption that they would be paid by the State, with interest.