California state controller said Thursday the state will stop issuing registered warrants or IOUs as payment on September 4, approximately a month earlier than originally planned.
The decision came after last month's enactment of a revised budget that closed California's $24 billion deficit and paved the way for the state to borrow the funds needed to cover its expenses until the bulk of its taxes are collected in the coming year.
The State of California owes a debt of gratitude to the thousands of individuals and businesses that were forced to bear the brunt of the state's chronic fiscal mismanagement, Chiang said in a statement.
Many businesses, municipalities and taxpayers were burdened as they received $2 million worth of registered warrants instead of cash. The warrants have a maturity date on October 2 but Chiang said the state will try to repay the warrants on September 4.
The state paid out the IOU's over six weeks from the beginning of July and were issued as a way to preserve cash until California found a way to close a budget deficit projected at $24 billion through the middle of next year.
The economy of the U.S's most populous state has been hard hit by the recession leading to a 34 percent drop in personal income tax during the first half of the year.