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PHOENIX — In a combative public meeting Thursday, Gov. Janet Napolitano shot down a move by state Treasure Dean Martin to begin the process of borrowing money to pay Arizona's bills.

Martin, saying the cash-strapped state could be out of money in 100 days, hastily called a meeting of the three-member Arizona Loan Commission, of which Martin and Napolitano are both members.

The commission, which has met only a handful of times in the past three decades, is charged with setting the maximum interest rate the state is willing to pay on loans. Once that step is complete, the state would begin doing what it has avoided since the Great Depression: Looking for a line of credit to balance a $1.5 billion budget shortfall in the current year. Otherwise, Martin says, the state's checks will bounce.

But Napolitano, who returned Wednesday from briefings in Washington, D.C., in preparation for her confirmation hearings for U.S. secretary of homeland security, countered during the 20-minute meeting that such a move is premature. And she was able to table the issue, likely until after she has resigned as Arizona governor.

The antagonistic meeting, though, illustrated both the tension surrounding the state's fiscal woes — expected to reach a $3 billion shortfall next year — and the long-standing disagreements between Napolitano, a Democrat, and Martin, a Republican.

Within minutes Thursday, the meeting had evolved into a shouting match between the two state officials, with the third member, Department of Administration Director William Bell, mostly staying out of the confrontation.

Sitting just feet from each other, Napolitano said Martin was failing to understand that the Legislature could still act to cut funds or find new ones before state revenues dry up. And she said she has presented a plan that would solve the problem.

"Your, kind of, scenario, presumes they don't act, the federal government doesn't act, nobody acts and 45, 60 days from now something might happen," Napolitano said.

But Martin, who often smiled at the governor's criticisms of his analysis, suggested Napolitano wasn't taking the situation seriously. He said he's not advocating borrowing, just putting a plan in place in case money dries up and there is no other option. By setting the interest rate, he argued, the state would be prepared if it needed to borrow.

"Governor, you have a problem," he said. "You have a serious problem. We have to plan for the worst but work for the best."

Napolitano said the Legislature might still act, and if it doesn't, there might be a better time to take up Martin's idea. By then, Napolitano is likely to have already resigned and taken her new job as homeland security director, leaving Secretary of State Jan Brewer, a Republican, as governor.

"I don't know why, at this point, this is anything other than a media event for you," Napolitano told Martin. Then turning to reporters and television cameras, Napolitano said, "And you're all here, thank you very much."

Talking over Martin, Napolitano said, "You presume that no one is doing anything, no actions are being taken, none will be taken and that your proposal is the best proposal for the fiscal health of Arizona, and that you as treasurer are the only person who's been concerned about the fiscal health of Arizona."

But Martin said until the budget is balanced, his hands are tied in continuing to spend money the state may not have.

"There are lots of plans out there," he told Napolitano. "But until they become law, I can only act on what the current law is."

Later, though, Martin acknowledged the meeting could be held at a later date. But he said he wanted to meet as soon as possible in order to calm the financial market. Napolitano's staff, however, supplied a Standard & Poor's report predicting the Legislature "will make expected necessary and timely budget adjustments to offset further revenue declines."

The meeting ended abruptly, with Napolitano getting up and declaring it over.

"If the treasurer were truly interested in working this out, there would have been a lot more consultation," Napolitano said to reporters while waiting for the elevator to her office. "This was done as a media event. I'm glad you all enjoyed it."

But Martin said the meeting was scheduled to be convenient for Napolitano since she'll leave for Washington again next week without a scheduled return.

"It's very clear that the governor does not want to face this problem," Martin said. "She wants to deal with Washington, D.C., issues. . . . That's fine. Brewer's chomping at the bit to come do this."

Brewer's press secretary, Kim Sabow, refused to comment on the incoming governor's views on borrowing money to pay bills this year.

But either way, the commission is likely to meet again once Brewer is sworn in, Martin said.