Tucson CitizenTucson Citizen

State treasurer readies emergency plan on budget

PHOENIX – Treasurer Dean Martin said Wednesday that Arizona is running low on cash due to the sour economy and that he is readying an emergency plan to meet payroll, tax refunds, payments to schools and universities, and other obligations.

Setting the stage for short-term borrowing by the state, Martin said the general fund had a “historic low” of $145 million at the close of business Tuesday.

On Wednesday, he authorized using the last of the cash stashed in the state’s rainy day fund.

He said the state is in the black only because of an emergency distribution of $307 million of federal stimulus money and one-time transfers of $218 million from special purpose funds.

“Even with this injection of half a billion of new money, there are not enough cash reserves to meet spending obligations in April,” Martin said.

Martin has called a meeting Thursday of the state Loan Commission to prepare for short-term borrowing. The three-member panel is made up of the treasurer, the governor and the Department of Administration director.

The commission’s meeting agenda released by Martin’s office calls for the panel to review the state’s cash flow and to consider setting a maximum interest rate for warrant notes that the treasurer could issue to temporarily cover state obligations.

Martin previously asked the commission to set a maximum interest rate, but then-Gov. Janet Napolitano and her appointed administration director balked during a Jan. 8 meeting, with Napolitano saying it was premature and not necessary.

Republican Jan Brewer has since replaced Napolitano, a Democrat, as governor.

The Legislature closed a $1.6 billion shortfall in the then-$9.9 billion budget late in January by approving spending cuts, use of stimulus money and transfers of special-purpose funds.

However, a new shortfall in the current state budget became apparent in February, and legislative budget director Richard Stavneak said Tuesday that gap could reach $500 million by the time the fiscal year ends June 30.

Stavneak cited January and February tax collections that were $155 million below levels anticipated when the $1.6 billion budget fix was approved.

The state also faces an estimated $3 billion shortfall in the next fiscal year based on $11 billion of spending.



State Treasurer Dean Martin: www.aztreasury.gov

Arizona Legislature: www.azleg.gov

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