Compiled from the Office of Arizona Treasurer, Google News and, the East Valley Tribune.
Maybe Chicken Little was right, the sky is falling.
Before Janet Napolitano resigned as governor and went to Washington to serve as Secretary of Homeland Security, leaving Arizona with a fiscal crises, Arizona Treasurer Dean Martin announced that the state may have to borrow to meet state spending obligations. Napolitano, a Democrat, called Martin, a Republican, Chicken Little.
When Martin convened a meeting of the state Loan Commission, which consist of the governor, treasurer and, director of the Department of Administration on January 8 of this year, to ask the commission to set a maximum rate to borrow money, Napolitano angrily called the meeting a publicity stunt, and borrowing was premature and not necessary.
The recession has continued to reduce Arizona tax collections and Martin yesterday said Arizona needs to resort to rare short-term borrowing to bridge an expected April cash shortfall.
This is the first time since the Great Depression in the nineteen thirties that Arizona has had to borrow money to prevent state checks from bouncing.
Martin pointed out that the problem is cash flow. On April 15 the state must pay around $650 million in school aid, however, there will be less then $ 400 million in the state treasury on that date, therefore, Arizona must borrow.
Martin says, "the state is literally living paycheck to paycheck."