Minn. Officials Might Borrow To Pay State Bills

BRIAN BAKST

ST. PAUL, Minn. (AP) — Minnesota Gov. Tim Pawlenty's budget advisers informed legislators Thursday that the state might have to borrow money next year to cover its bills.

It would mark the first time the state has had to borrow money for bills in 25 years, when it took out $1.6 billion short-term loans over a four-year stretch and had to pay almost $125 million more to service them.

Minnesota Management and Budget Commissioner Tom Hanson raised the prospect to a legislative panel and one of his deputies laid out several options, ranging from a bond sale to a negotiated credit line with a bank.

Hanson said the borrowing could occur early in the year if a revenue slide persists; money coming into the state's general fund is $223 million below expectations since February. A comprehensive economic report is due Dec. 2, and Hanson said he wants to settle on a borrowing approach before lawmakers return for their 2010 session in early February.

"We may not need it but it would helpful to plan for it," Hanson said. He added that discussing it now is "better than reacting quickly or rashly" next spring.