State Treasurer Dean Martin has been back in the office for several weeks now, after his wife and newborn son died due to complications from childbirth last month.

Now, the 34-year-old is pressing forward with his political agenda, which is likely to include another run for state treasurer, as well as keeping up with the daily duties of the office. He said his schedule was lighter than normal during his first couple of weeks back, but the action has been heavier since then – especially now that the state is preparing for a government shutdown if a budget isn’t passed by the end of the month.

In his free time, Martin continues to work on the formation of the Martin Family Charitable Foundation, which was established to support causes important to his late wife Kerry, such as financial literacy and water-safety education, as well as to find ways to prevent the medical emergency that led to the deaths of his wife and son.

The Arizona Capitol Times sat down with Martin earlier this month to discuss his future in Arizona politics, his transition back to work and the ongoing budget battle between the Legislature and the governor.

So, you are young compared to most state treasurers, right?
I’m 34 years old, and going to be 35 pretty soon.

And you were a state lawmaker at what age?
I turned 26 two days before the primary election (for Senate in 2000). But I don’t hold the record as being the youngest legislator ever. That title is held by Art Hamilton, who was 24 when he was elected to the House. He holds the all-time record in the House, but I hold the all-time record in the Senate.

Is the rule in the Legislature that you have to be 25 years old to be a member?
The Arizona Constitution states that legislators have to be at least 25 (Note: Hamilton had to wait until he was 25 to serve in the House). Some states are different.

Regarding more pressing issues, do you like any of the proposed budgets?
I don’t like the tax increase. I just don’t see it right now as viable. To force the public to raise taxes right now I think is a bad idea. I mean, we saw what happened in California. The governor’s five-point plan is within the seven(-point) plan that (California Gov. Arnold) Schwarzenegger had, and that all went down. So I just don’t see it.

When people are struggling to make ends meet, they’re not going to want to raise the cost of living on themselves. So I don’t see that passing, and I don’t see the votes in the Legislature to pass it, even if it was a good idea. To blow up the whole budget on something that is unlikely to ever happen, I think, is a bad move.

Believe me, I know there are a lot worse things in life than not getting everything you want in a budget. I mean, at this point everybody just needs to take a deep breath and cut a deal and get it done, because having no budget is substantially worse than any alternative that’s out there, because not having it, not only do people not get paid, you’ve got hundreds of millions of dollars of rollover payments that don’t move. I mean, basically no funds move – no federal funds, no local funds, no state funds. All dollars basically freeze in place at that point, and that’s going to have an impact on our economy. And our economy is weak right now, and this is hundreds of millions of dollars that would normally be moving won’t move.

So it’s not just the state employees that get impacted.

Some of them won’t make their mortgage. They won’t be going out to eat. It’ll impact tourism because if you’re shut down over the holiday weekend, that means a lot of people can’t go to the state parks. That’s going to hurt communities for the Fourth of July tourism dollars. The impacts are just too big to let that happen. There’s no such thing as a good budget out of this. There is no good budget. It’s too deep of a hole. It was ignored for too long.

What about this rumored compromise that will put a tax hike on the ballot in the fall and backfill revenue. Do you think that is sound financial planning?
I don’t see them getting the votes for something like that. I don’t see the votes for that in the Legislature. The governor made a big push for it. It didn’t work. And there are other ways to deal with the problem.

If you’re going to do something, give the voters more than one alternative. Give them an opportunity to do it with reductions in spending as well. Don’t just give them this is the only way, and try to put a gun to the taxpayers’ heads and say “Raise taxes or else.” That’s not a good way to go either, and that’s kind of the route they’re going.

Plus, our problem is not temporary. I think that’s what everybody’s kind of lost. The governor and other folks are talking about a temporary tax increase. Well, our problem is structural. We have a structural problem to our budget. A temporary anything isn’t going to solve the problem.”

What about the legislative budget plan? Do you support that?
I can’t say a whole lot because they passed it while I was at the hospital, so I can’t tell you that I’ve read the whole thing through to say whether or not I would support it or not. I like the fact that it doesn’t have a tax increase. I don’t think there’s any solution that I’ve seen pass that does enough to cover the hole. But they did as much as they can, obviously. The squeezed as much as they can. At this point, we’ve got to enact something for 2010.

We’ve got to face it – with the economy the way it is right now, with us still being in recession, this won’t be the last 2010 budget that’s passed. No matter which budget passes, you’re going to revisit this budget probably in a few months. It could be as early as September or October or as late as January or February, but you’re going to have to redo the 2010 budget again.

I haven’t read enough of their budget to tell you which one I prefer. I just know I don’t like tax increases.”

If you were crafting the 2010 budget, what would your solution be?
If I was writing the 2010 budget, basically I would say, OK, whatever everybody got in 2006, just freeze it right there. You just re-enact the ’06 budget and say everything that was promised from ’06 to now in increases, we’re going to trigger it, and whenever the revenue comes in, those increases will come back in. And so just basically you’ve to go back to a budget you can afford.

The problem you have with that now is because of the fact that they took the stimulus money, you don’t have that luxury anymore. There are certain things that…because you took the stimulus money you have to fund those increases. And so to that exception you have to fill those things in, which will eat up a good portion of the stimulus dollars that you’re bringing in.

But basically that’s the way I would approach it. Rather than trying to take the 2009 budget and cut it down to what you can afford, go back to the last budget you can afford and re-enact that. That’s the starting point that I would go through, and then say, OK, what do we absolutely have to increase, either because of the stimulus requirements on the states, or because of other formula or caseload growth you’re required to do? You add back in what little money you have.

But isn’t the spending floor for much of the stimulus money the 2006 level?
That’s also part of it, yes. That’s correct. That helps quite a bit. But … the ’06 budget was the last budget that – our revenues are less than what our spending was.

Permanent spending in ’06 was $8.3 billion. Revenues are going to be below that. They’re going to in the $7 billion range, low sevens. So you’re still looking at a billion-dollar shortfall between the ’06 spending and actual revenues. But that can be covered through some of the normal budgeting maneuvers that are done, plus some of the stimulus money as well.

Really, you’re looking at the ’05, ’06 levels are pretty much what you can afford. Anything beyond that, any agency or budget that is in excess of that, those were promises that were made the last couple years with money that isn’t there, never really was there. Those were false promises.

I think that’s an easier budget to craft, because now you’re talking about what are your priorities in putting in your money, as opposed to trying to cut back and the whole battle that ensues through that.

What would a shutdown look like at the Treasurer’s Office?
According to the Attorney General’s Office, we cannot employ anybody. No staff. We can’t even incur liabilities. So basically, there’s nobody here to make the state checks that have already been written good, so nobody can cash any state warrants.

Over at Department of Administration, nobody will be there to sign the warrants. So nobody gets paid, no money moves. No money moves in, moves out. Basically, all the money freezes where it stands, effectively. So agencies that are federal fund agencies – I’ve heard some of the agencies say, well we’ve got federal funds; we can continue operating on that. The problem is there’s nobody to give you access to them. Because we’re a general fund agency, we can’t move the money for you.

GAO, the General Accounting Office, is a general fund agency. There’s nobody there to sign any warrants, so there’s nobody to sign off on any new, even warrants coming out of federal funds or other funds. So without an appropriation, at least for GAO and ourselves, even federal funds freeze in place.

And so that presents a special problem, not only for payroll that goes out on (July 2), which is about $85 million. That is payroll for time already accrued. In other words, people right now, state employees are working right now for the paychecks they’re going to get (on July 2). Under federal law, if you fail to pay an employee what they’re owed when they’re owed it, I believe it’s a triple-damages claim. So that $85 million payroll could become a $300 million payroll problem, which is an extra couple hundred million we don’t have. Lawyers will chew up most of that, but still.

Then you’ve got the $600 million rollover payment. You’ve got school districts and counties that have gone without funding for several months now, expecting to get paid back on the first of July. That payment doesn’t go through. So now you put all the counties and the school districts in a bind. You have state-shared revenue distribution, so local cities and towns, they’re not going to get their distribution if we’re shut down.

We do have one management fund that has about $1,300 in it. That will allow us to keep the computer systems running for a couple days, basically. But it allows us to keep just the systems operational so that whenever a budget does pass we can come back. But it’s not a definite. It doesn’t last forever.

So your office would need an emergency appropriation or it wouldn’t be able to pay for other emergency appropriations?
Exactly. That’s one of the things we’ve been talking to the Legislature about is if you are staring at a shutdown becoming a possibility, don’t let that happen. Pass a continuing resolution. Fund our office and the General Accounting Office for a minimum of a week, a month, whatever, just so the finances of the state don’t freeze.

You also have the problem of without any of the money moving, the state will start to default on payments. That’s going to destroy our credit rating. Not a very good time to be doing that when the credit markets are tough already, and the fact that the state is likely to need, be relying on credit to get through this next year.

Because of the cash flow problems the state already has we’re going to be continuing to borrow money just for daily operations through a good portion of fiscal year 2010 because the state’s so cash poor right now. That will make all of those borrowing costs go up substantially. So it’s very expensive not to have at least a minimum level of operations going at the beginning of July.

The governor may be able to call out the National Guard to run the prisons, but the National Guard won’t get paid until they get a budget. I don’t know how long they’ll be there without a paycheck. Probably because it’s military they’ll be there as long as the governor tells them. I don’t know how long state employees will hang around either if they’re not getting paid. How long before they’ll just say ‘Forget this, I’m going to get another job?’ Especially the most talented, the ones that we have a hard enough time keeping as it is, you could start losing those people pretty quickly. This is not a good time to be doing this.

Now that you’re back at the office, have your plans changed? You had an aggressive schedule ahead of you in the next couple of years.
No. I haven’t really changed any of that. I know Kerry wouldn’t have wanted me to. She would have wanted me to continue doing what I was doing before.

I have responsibilities, and that doesn’t change. To some degree, math is comforting. Math doesn’t change. That provides some level of normalcy.

And Kerry loved this. She was the political science major. I was the on the business end. She loved this political stuff as much as I did, if not more. So she would be really upset if I did anything differently. It was a true partnership. I used to say she’s my better half, but it really was a partnership in everything we did.

What are all those?
That’s the latest pile of cards (from people offering condolences). I haven’t been through it yet. I have two or three stacks just like this at home, plus thousands of e-mails. There were something like 2,000 people at the service for Kerry and Austin. And it was covered by the media all over. It was sort of surreal.

So many people who knew your wife Kerry described her smile. It was as if everyone who knew her said they will remember her smile most.
It was always that smile. (He leans over and picks up a wedding photo of his wife from his desk) I like this photo I call it the Mona Lisa photo. No matter what angle you look at it, her eyes track you. And she’s got that partial smile.

(He pulls out another photo) And there’s that same smile – in every one. Yeah, that was Kerry.

I definitely can see why you went out of your way to meet her.
Oh, yeah. She was definitely – I married up. I married better.

Thanks so much for your time, Mr. Martin. All of our thoughts are with you.
Thank you.