Minn. may need bank borrowing to ease cash crunch
Published 11:47 am Monday, July 12, 2010
ST. PAUL — Minnesota officials are on the verge of establishing a line of credit with a bank to draw on if a government cash crunch persists.
Budget chief Tom Hanson told lawmakers on Monday that the credit line should be ready by September but it won’t be used immediately. Minnesota technically has a balanced budget but government spending and income for most months don’t match up.
A credit line is similar to a home equity loan. The state’s credit line would max out at $600 million.
Hanson says the state also plans to delay more payments to schools, colleges, health care companies and businesses owed tax refunds.
Senate Majority Leader Larry Pogemiller (POHG’-uh-mill-er) accuses Gov. Tim Pawlenty’s adminstration of delaying the most severe fallout until the Republican leaves office in January.