As I understand the debt consolidation plan unveiled by state treasurer Dean Martin, the plan could yield Arizona an up-front net amount of $1.2 billion of cash.

Although the Gov. Jan Brewer's office quickly poo-pooed the idea, I'm guessing that it will soon be adopted. The Governor and Legislature, collectively, want to avoid any spending cuts they can. (Yes, there are a few heroic legislators who really want to clear out the dead wood in state government and in our bloated school district bureaucracies, but they are not a majority.) And tax hikes are politically unpopular ("I didn't vote for a tax hike--I voted to send a tax hike to the ballot..."). So, if Dean Martin really has found $1.2 billion in cash just lying on the sidewalk, ready to be picked up and spent, it will soon be spent.

And Martin's plan will definitely be enacted if the Brewer Tax goes down on the May 18 ballot.

That said, a one-time infusion of $1.2 billion is not nearly enough to balance the state's ongoing structural budget--which is close to $3 billion in a $10 billion annual budget. If the Governor and Legislature fail to make very large baseline budget cuts, the gaping hole in the FY2012 deficit will be just as large as it is now.

Here was the Republic's story on the plan:

http://www.azcentral.com/arizonarepublic/local/articles/2010/02/26/20100...

--Tom