State Treasurer: AZ could be out of cash by mid-February

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Steps need to be taken to avoid bankruptcy

PHOENIX - State Treasurer Dean Martin said Monday he is setting the stage for Arizona to borrow for paychecks and other expenses and that lawmakers must erase a budget shortfall he says puts Arizona on a path to bankruptcy.

Martin said the state could run out of cash by mid-February unless steps are taken.

The state faces a projected $1.2 billion shortfall in its $9.9 billion current budget but Martin said short-term borrowing could total multiple times that amount.

Martin said state officials need to set a maximum interest rate for short-term borrowing by the state.

He said lawmakers need to cut spending and authorize short delays in school funding.