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Capitol View®
Tim Pugmire

Bill would boost Minn. budget reserves by $150M

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Minnesota's budget reserve would receive a $150 million boost this year under a bill moving through the state Senate.

Democrats propose using part of the state's $1.2 billion to bring the rainy day account balance to $810 million.

The bill also would dedicate one third of future budget surpluses to the reserve.

During a tax committee hearing today Senate Tax Chair Rob Skoe said a bigger reserve would help the state weather any economic downturns. He said many businesses use the same strategy.

"I think that it's appropriate as many businesses and organizations do is to carry a small percentage of your general fund needs in a reserve to help you get through the times when your revenues are under stress," said Skoe, DFL-Clearbrook. "It just seems like the fiscally responsible thing to do."

Republicans question the move. State Sen. David Senjem, R-Rochester, warned that if the reserve grows too large it would wrongly insulate state government from economic realities.

State Sen. Julianne Ortman, R-Chanhassen, said the Legislature should stop overspending.

"I just don't think that it really addresses the problem," Ortman said of the proposal to increase the surplus.

"It's probably a good idea to have a reserve," Ortman said. "But my experience over the last 12 years has been every time there's a surplus, Democrats here at the Capitol want to spend every dime and then some."