CHICAGO — Veteran Minnesota-based financial adviser Kristin Hanson will take the reins of debt management for the state’s Office of Management and Budget, commissioner Jim Schowalter announced this week.
Hanson, who has worked at the Roseville-based financial advisory firm Ehlers since 1995, will join the government at the end of the month as assistant commissioner for debt management and treasury. She replaces Kathy Kardell, also a former Ehlers veteran, who resigned last fall to join Hennepin County’s finance team.
Hanson primarily works as an adviser to school districts. She was attending a Minnesota School Boards Association conference Thursday and was not immediately available to comment on her new position. Ehlers is a financial adviser to the state on its emergency-system revenue bonds but Hanson has not worked directly as an adviser to the state.
Before joining Ehlers, Hanson was a project analyst at Publicorp Inc., an economic development firm; as a legislative assistant to the state House and to Congress; and as an administrator at Honeywell. She graduated from St. Olaf College and holds a master’s degree in public affairs from the University of Minnesota.
“Her strong and diverse background in finance make her well-suited to help lead the agency,” Schowalter said. “Her experience in both the public and private sector will be of great assistance to the administration, the Legislature and ultimately the citizens of the state.”
Since Kardell’s departure last fall, debt management was handled by Schowalter and financial analyst Sue Gurrola. Recently sworn-in Gov. Mark Dayton named Schowalter to the commissioner’s post. Schowalter had been an assistant commissioner who was serving as acting commissioner.
Hanson comes to the state as a new governor and Legislature have taken office, and finances and debt are likely focal points given the anticipated $6.2 billion deficit in the next two-year budget cycle that begins July 1. Dayton, a Democrat, is set to unveil a new budget Feb. 15 and by the end of January has said he would propose a $1 billion capital budget.
The governor and Legislature typically pass a two-year operating budget in odd-numbered years along with a modest capital budget. Work on a larger package, known as the bonding bill, is reserved for even-numbered years. Dayton wants a larger bill passed alongside an operating budget to help spur economic development.
Minnesota has a self-imposed cap on debt that limits outstanding principal to 3.25% of personal income. It previously limited debt service to 3% of general fund revenue, but had bumped up against that limit and so changed the policy in late 2009.
Though much of the heavy fiscal lifting with lawmakers will fall to Schowalter, who has been with the office since 1994, Hanson also will have to navigate what could be a difficult road given the divided state leadership.
Though a Democrat is now governor, the GOP took control of the Legislature following the November election. Former Gov. Tim Pawlenty often clashed with the Legislature, and similar challenges likely await Dayton.
Dayton has warned that tax increases are needed to help deal with the budget shortfall, while Republicans vowed to fight such actions.
The state’s $4.2 billion of general obligation debt is rated AAA with a stable outlook by Fitch Ratings and Standard & Poor’s, and Aa1 with a stable outlook by Moody’s Investors Service. Minnesota has a $57 billion budget for the current biennium.
State law requires all GO sales be done competitively, but Kardell won legislative support to use negotiated sales during the current biennium due to market conditions. That authority expires June 30. Gurrola said no GO sales are planned until the summer.
