Freeborn County will lose about $300,000 in checks that come from the state this week. Gov. Tim Pawlenty announced a shortfall in revenue that resulted to reduced payments to local governments.

Freeborn County Administrator John Kluever said the county will need to cover its obligations by pulling from its reserves.

The state government’s fiscal year runs July to June, but fiscal years for counties and cities in Minnesota run January to February. Kluever said that means the county budget’s final spreadsheet will show the $300,000 as a flat-out loss. However, they county commissioners will meet at a workshop in January to look at further cuts, which likely will include finding ways to rebuild the reserves.

“It is a bit of a shell game,” Kluever said.

Also at that workshop, county staff will ask commissioners to set priorities, he said. That means if there are state aid cuts beyond what the county has anticipated, the set priorities will determine what gets funded and what gets dropped.

Pawlenty made his announcement last Friday.

He trimmed $271.4 million in unspent state money to fix a $426 million near-term deficit. It came as a reduction in state aid for cities and counties, human services programs and higher education.

Kluever said the county had made cuts to the proposed 2009 budget in anticipation of reduced state aid; however, local government officials had hoped the state wasn’t going to make additional cuts to the final 2008 state aid check — which the state sends in June and in December.

Cities with populations of less than 1,000 were spared cuts.

The legislative session starting next month will be a tough one. There is a projected $4.85 billion shortfall for the upcoming two-year budget cycle.