Bill would boost Minn. budget reserves by $150M

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.

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"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."