A lot of U.S. states are in dire straits right now, but none are quite as extraordinarily broke as Arizona is:
The state’s cash-flow problems are so dire that it took less than two weeks for government to tap the entire $700 million loan it had borrowed to help with short-term needs.
State Treasurer Dean Martin on Wednesday said that means the state will have to revert to some internal borrowing to keep money flowing in the state’s checking account.
The shortage developed when the Treasurer’s Office had to make a Dec. 1 payment of $389 million to the state’s schools, which exceeded the cash on hand. To make up the difference, Martin borrowed $73 million from internal state accounts.
And who lent this money to Arizona? None other than TARP recipient Bank of America!
On Nov. 19, the state finalised a loan agreement with Bank of America for $700 million, the first time since the Depression that Arizona has needed to turn to an outside borrower.