California IOU!

Well if the federal government can do it why can't California! What happened to the law requiring states to have a balanced budget? Other than a federal reserve note I wonder what California is issuing their citizens. Can they buy bread and milk with these IOU's, do they collect interest, will the electric company take them so they will not turn of their lights? We have started down a slippery slope here, who pays?! Where California goes so follows the nation!