SAN FRANCISCO - As California gets closer to the half-billion-dollar mark in outstanding IOUs, the state's leading budget negotiators resumed communications over the weekend, though hours of meetings left more to be resolved.

The budget deal is needed to resolve a general fund deficit that is projected to exceed $25 billion for the fiscal year that began July 1, as well as to alleviate a cash shortfall so acute that the state controller's office is paying some creditors with IOUs in order to preserve cash for other creditors with higher legal priority, such as bondholders.

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