Senate votes to save much of surplus for a rainy day
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(AP) A bill to almost double Minnesota's rainy day reserves passed the state Senate on Wednesday.
Senators voted 57-to-7 to set aside $629 million of the budget surplus in case of a downturn in the economy. It would bring Minnesota's reserve to 5 percent of state spending.
In arguing for the bill, Senate Majority Leader Larry Pogemiller said slow growth in personal income and trouble in the mortgage sector point to a shaky economy that legislators need to plan for.
"That won't totally protect us from a downturn but it will give us a cushion," said Pogemiller, DFL-Minneapolis.
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Sen. David Hann, R-Eden Prairie, said it's hypocritical to put money in reserve and then pursue tax increases, as majority Democrats are considering.
"We protect the budget of the state and go after the budgets of the people of Minnesota," Hann said.
Other opponents of the bill argued that the money could be better used to meet immediate spending needs.
Gov. Tim Pawlenty has recommended increasing the reserve to $800 million overall. It now sits at $653 million.