Arizona is on the brink of running out of cash in the next few days and is taking steps to borrow enough money to stay afloat for the rest of the fiscal year, said the state treasurer.

Treasurer Dean Martin said the budget fix approved by lawmakers and enacted by Gov. Jan Brewer in late January hasn't held up to a sliding economy that has resulted in an erosion of state revenue in the past few weeks.

"We're in a situation where the state is literally living paycheck to paycheck," Martin said.

To prevent the state from defaulting on its commitments, an emergency meeting of the Loan Commission will be held March 19, during which a maximum interest rate for the day-to-day loans will be set. Martin estimated the state would likely take out the daily loans at an annual rate of less than 1 percent.

Despite a budget fix that cut $580 million in state spending and raided $600 million more from specialized funds, a worsening economy will pull the state into the red by April 15 – if not sooner, Martin said.

Last week's payroll nearly didn't happen, he said, and was only made possible because of a $307 million transfer from the federal government as part of the economic stimulus plan. Gov. Jan Brewer sent a letter two weeks ago certifying to the federal government that the state would accept stimulus money.  

The Loan Commission includes Martin, Brewer and Department of Administration Director Bill Bell. At the last commission meeting in January, Martin and former Gov. Janet Napolitano exchanged harsh words over the state's financial situation.