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Contributors in Minnesota: Jennifer Brooks, Baird Helgeson, Mike Kaszuba, Patricia Lopez, Jim Ragsdale, Brad Schrade and Rachel E. Stassen-Berger. Contributor in D.C.: Kevin Diaz.
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Not just schools feeling the pain, state to borrow $52 mill. from U of M
Posted by: Baird Helgeson under Funding, State budgets Updated: January 30, 2010 - 3:52 PM
The state of Minnesota isn't just tapping public school reserves to manage its cash flow problems, it's also borrowing more than $50 million from the University of Minnesota.
State officials told the university it would delay a $52 million March payment until May to make sure the state has enough money to pay bills this spring, according to Standard & Poor's, a credit-rating agency. University officials do not expect delays in the April and May payments.
This comes on top of the state’s plan to withhold $423 million in payments to public schools to pay bills this spring.
The payment delay won't hurt the university's credit rating, according to S&P.
"At this time, Standard & Poor's does not believe this delayed payment will have a negative effect on the university's credit rating, although continued and sustained delays or reductions in appropriations would be viewed unfavorably," the rating agency said in a statement.
For financial geeks, S&P gives the university a strong rating of AA/A-1+/Stable.
The university received $677.1 million from the state in fiscal 2009 and expects to get $623.4 million for fiscal 2010.
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