Minnesota might have to borrow to pay bills by the fall

  • Article by: Associated Press
  • Updated: April 12, 2010 - 11:28 PM

ST. PAUL, Minn. - Minnesota should reach the end of this budget year without having to borrow money to pay bills, but a bank run may be necessary as soon as fall.

State budget officials updated lawmakers Monday on Minnesota's precarious cash-flow situation. They all but ruled out short-term borrowing for the 2010 budget year that ends June 30.

Budget director Jim Schowalter says "deep cash problems" loom for the 2011 fiscal year. Barring law changes, spending cuts and upticks in revenue, he says the state might have to take out short-term loans to meet its obligations.

Minnesota hasn't resorted to short-term borrowing since 1984.

House Finance Committee Chairman Lyndon Carlson says the state may have limped through the current fiscal year, but the future doesn't look good. As he put it, "We're in a mess."

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