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Minnesota's rainy day fund hits all-time high

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Minnesota's so-called rainy day fund is now at an all-time high, thanks to a law approved earlier this year.

State finance officials announced Tuesday they deposited $150 million more into the state's budget reserves, bringing the total to $811 million, according to a news release.

The extra money in the reserves gives the state a bit more leeway should it face a deficit in the future.

"This action is a substantial step towards additional budget stability and prudent financial management for the state,” Management and Budget Commissioner Jim Schowalter said in the release. “Increasing the budget reserve helps the state manage economic risk and is viewed positively by the state’s bond rating agencies.”

The Legislature, with backing from Gov. Mark Dayton, approved this money in the spring as part of a larger tax cut law, but it didn't take effect until July 1, the start of the state's new fiscal year.

The new law also says one-third of future budget surpluses will go to the state's rainy-day fund.

This is the first time the state has increased its budget reserve since 2001, when it was set at $652 million, release says. Doing this gives the the state long-term stability if finances take a dip, budget watchers say, according to the Star Tribune.

The state also has a $350 million cash-flow account that lawmakers have used in tough economic times, the Associated Press notes.

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