Minnesota banks could benefit from a government shutdown

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At least one union is asking bank CEOs to cut a deal with the school districts.
If the Minnesota Legislature doesn't resolve the state budget by July 1, a government shutdown wouldn't be bad news for everyone.

In order to stay open, school districts without enough reserve funds to pay employees could be forced to turn to lending institutions for help, meaning Minnesota banks stand to benefit financially through interest and fees.

This symptom of a potential shutdown has at least one union fuming.

"It's bullshit - excuse my language - to say we can't afford to invest in our schools, but we can afford to pay interest to banks," says Leif Grina, representative for SEIU Local 248.

Last week, Carol Nieters, executive director of Local 248, sent a letter to the CEOs of U.S. Bank and Well's Fargo, asking that the banks cut a deal with school districts in the event of a shutdown.

"We believe it is appropriate to ask the financial community in our state to accept its share of responsibility for the budget impasse and to step up to help as it was helped," writes Nieters. "...We respectfully request that if a shut down occurs then school districts in Minnesota will be guaranteed interest free financing until the budget impasse is resolved."

Grina says the union hasn't heard a response from the letter.

If districts do turn to banks, there are restrictions on how schools can borrow, says Patty Heminover, vice president of Spingsted, a public-sector financial advisory firm.

Previously:

"School districts don't have the authority to walk into a bank and say 'I want to borrow $50,000 and I'll pay it back within a year from now'," says Heminover.

The districts could establish lines of credit with the banks based on expenditures from the year prior, which would have to be repaid within 45 days, she says.

In terms of how much districts would pay in interest rates and fees, it varies from bank to bank, says Heminover. "But overall, I think banks are being really supportive in trying to keep the costs down for school districts, because they too know the predicament they're in."

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3 comments
Kirk the Conservative Jerk
Kirk the Conservative Jerk

From above - "If the Minnesota Legislature doesn't resolve the state budget by July 1...."

That's a Flat out LIE!!!!!!!!!!

OK, Apparently I have to spell this out because CP will lie, and lie some more.I should just remain quiet, because Gov. Goofy is going to hurt the Democrat Party in Minnesota for a decade by demanding a shutdown.

OK, Right now, the legislator's hands are tied.  (they cant do shit!)They are in recess now until the first Tuesday after the first Monday in January.Only the Governor has the ability to call a special session whereas a budget can be passed.No special session, no budget, and the government shuts down.If government shuts down, it punishes the poor, sick, elderly, disabled, and all them government employees.

CALL HIM @ 651-201-3400TELL HIM TO CALL A SPECIAL SESSIONTELL HIM TO NOT PUNISH THE POOR/ELDERLY/DISABLED BY SHUTTING DOWN THE GOVERNMENT, JUST SO HE CAN GET HIS TAX INCREASES.  TELL DAYTON TO STOP HOLDING MINNESOTA HOSTAGE UNTIL HIS DEMANDS ARE METTELL HIM TO PASS A TEMPORARY SPENDING MEASURE TO KEEP GOVERNMENT OPEN WHILE THE DETAILS OF A BUDGET CAN BE HASHED OUT.

Or do nothing. I know exactly where the blame will fall.  Eventually this message will get out there.  The deceivers cannot deceive people forever. People will ultimately learn whose fault this shutdown is.

CALL DAYTON @ 651-201-3400

LMAO
LMAO

Yeah, it's the Republicans fault! They're responsible for this situation in the first place and refuse to take ANY accountability and sit down at a mediation. Why not? Something to hide? Embarrassed? Why refuse mediation? Explain that to me Kirk. Where' Bachmann now? Oh yeah, running for president....which just sends me into throes of laughter that I cannot control. She and T-Paw, whose state is SHUTTING down, running the federal government. Gawd! Bring Jesse the Mouth back---at least he had a grasp on reality.

Kirk the Conservative Jerk
Kirk the Conservative Jerk

What?The 5+ Billion dollar deficit is solely the fault of the democrats which passed every past budget from 2006-2010.Remember when the state was wondering what to do with the 2+ Billion surplus in 2006, when the democrats took over? They were contemplating "doing a Jesse", and sending out checks to every taxpayer in Minnesota.Instead the democrats increased government spending by 8% that year and pissed your rebate check away. Remember that?The Republicans passed a balanced budget with no tax increases, and 1 Billion more for health and human services, and 1 billion more for K-12 Education. The Republicans budget increased the state budget from 32 billion (last budget) to 34 billion.The Republicans also had their budget proposals on Dayton's desk 6 weeks prior to the deadline. Almost a record time.6% increase wasn't enough for Union chummy Dayton though.He wants a budget of 37+ billion. A 5 billion dollar increase on the last budget (+16%)Did you get a 16% raise last year?

Here is the key people - DID YOU GET A 16% RAISE LAST YEAR?Well, why does Dayton think the state should get one?Is it not you, which would be paying for it?

Ya exactly! "LMAO" (I would even through a "F" in there between the "M" and "O")

And "mediation", are you the remaining idiot in here?What kind of a "Leader" needs mediation?Is Dayton not a leader?

Again, LMAO!

Those talking points will get you nowhere with me. And what does Bachmann have to do with Dayton's inability to lead. (Dayton needs mediation, what a joke!)There is a reason why Dayton has been having these budget meetings behind closed doors. That is when he shows up for the meeting he scheduled.

Also - "Bring Jesse the Mouth back---at least he had a grasp on reality."Are you flipping serious? I spit pop all over my keyboard when reading that one.

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