Pawlenty Administration to Borrow 700 Million From State Funds

By Lynn Ashton on September 9, 2010, 10:20 pm

Tom Hanson, State Management and Budget Commissioner for Minnesota, today confirmed a $ 1.2 billion state borrowing and deferral plan. He told a joint House-Senate committee that the Governor Tim Pawlenty’s administration has to borrow around $700 million from different state funds and from Minnesota State Colleges and Universities.

They also have to defer another $500 million in payments to K-12 schools, the University of Minnesota and corporate refunds so as to maintain the state’s cash budget. On the other hand, Governor Pawlenty has asked the U.S Government for more than $260 million in Medical aid and other financial assistance, despite his opposing some federal spending.

Commonly known as ‘administrative actions’, the payment deferrals have been typical in aiding budget shortfalls. Short-term borrowing is quite less common. Pogemiller, who chaired the Legislative Commission today, criticized Pawlenty for leaving the state in a “cash flow jam”. The three candidates for governor continued to debate the economic condition of the state in today’s hearing.

Pogemiller opined that the new governor will be left with the unpaid IOU’s.  Meanwhile, Governor Tim Pawlenty who has been staunchly opposing the new health care reforms, has sent a letter to U.S. Secretary of Health and Human Services Kathleen Sebelius and demanded $263 million in FMAP (federal medical assistance percentages).

 

Governor’s office releasing the letter said the funds demanded help finance Medicaid and foster care recipients. Referring to his working with six or seven ex-governors, Pogemillar criticized on Pawlenty that he hasn’t seen any of the other governors leaving the sate in such a poor financial condition.