State delays payment to U of Minnesota, borrows money from MnSCUby Tim Post, Minnesota Public Radio
St. Paul, Minn. — The state is going to delay nearly $100 million in funding to the University of Minnesota this fall.
By holding back funding to the U of M in September and October, the state will have more cash on hand to pay its own bills.
But that means the U will need to get by without $89 million it planned on getting from the state. The state is expected to pay the money back in June 2011.
U of M chief financial officer Richard Pfutzenreuter says that shouldn't cause problems with the U of M's cash flow, but will cost the school $900,000 to $1 million in interest income.
"The state will simply be keeping it, and we'll lose out on what our investment income will be," he said.
Last April the state held back one month of funding from the U, about $55 million, in a similar accounting shift. They money was paid back a month later.
The governor is also going to borrow $350 million dollars from MnSCU's state appropriations. That money will need to be paid back by the end of the fiscal year.