From the Redding Record-Searchlight:
What is a registered warrant, or IOU?
A registered warrant is a "promise to pay," or an IOU, issued by the state when there are not enough funds to pay all of its general fund obligations. Registered warrants bear interest and are redeemable by the state treasury only when the general fund has sufficient money. If the Legislature and governor fail to enact a budget that provides enough cash for the state to pay its bills by Thursday, the controller will begin issuing IOUs. Assuming there is adequate cash in the treasury, IOUs may be redeemed on Oct. 1. Both the issue and the maturity date will be printed on the IOUs.
Who will get IOUs?
Welfare recipients, private businesses who contract with the state, local governments, taxpayers receiving income tax refunds and owners of unclaimed property.
Who won't get IOUs?
The state constitution mandates that education and debt service have priority status. Laws also require that state payroll, CalPERS, CalSTRS, in-home supportive services and Medi-Cal providers continue to be paid. State retirees will also continue to get paid regularly....MORE
Well there you go, public employee pensioners get cash, taxpayers due refunds get promises.
Pretty much sums up Cali politics.