California charities that depend on state money to survive are facing a mixture of confusion and fear after Gov. Arnold Schwarzenegger declared a fiscal emergency and the state said it would start paying many of its bills with IOU’s. While charities are used to California’s regular budget impasses, the magnitude of the state’s deficit — more than $26-billion — and the drawn-out battle between Democrats and Republicans on how to plug it have created an especially tense environment. No matter what the outcome, steep cuts in spending on health and human services are…

