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 collects $15 billion a year from various taxes, but money goes in and out the door unevenly throughout the year.
Minnesota, like most states, has a cash-flow problem caused by the worst recession since the Great Depression, Hanson said. The state has collected $233 million less in taxes than was forecast in February.
Because of the cash shortage, the state this month delayed $128 million in corporate tax refunds to 451 businesses and $16 million in sales tax refunds to 294 taxpayers, state Revenue Commissioner Ward Einess said. He plans to pay those refunds in December to avoid having to pay interest on payments that are more than 90 days overdue.
State officials won't know if they will have to borrow money for day-to-day operations until state economist Tom Stinson issues his next revenue forecast Dec. 2, Hanson said. The state wouldn't have to borrow until March, April or May, its "low-cash months."
The state's top-level credit rating could be in jeopardy if it does borrow for operating expenses, Hanson said. That would force the state to pay higher interest rates on bonds it issues for construction projects.
The last time the state used short-term borrowing was during the 1981-84 recession. It borrowed $1.6 billion and paid $124 million in interest on those loans.
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