Proposed human services budget would slash spending by $1.3 billion, lawmakers hear

With an expected $5.1 billion state deficit forecast in the 2028-29 biennium, Department of Human Services officials are looking at ways they plan to pare back spending before then.

And three areas are being targeted in the 2026-27 biennium: disability services, nursing facilities and behavioral health.

The House Human Services Finance and Policy Committee heard their budget proposal Thursday to reduce the department’s expenditures by $1.3 billion over the next four years. No action was taken.

“The majority of our budget is really centered around curbing increased growth and spending,” said Elyse Bailey, the department’s budget director.

The goal, she said, is to have the least amount of impact on people via budget reductions. They’re looking forward to working with the committee on challenging budget decisions.

The department’s fiscal year 2024 budget was around $24 billion. More than half of those funds, $12.6 billion, came from the federal government with $9.4 billion from the General Fund and another $1.1 billion from the Health Care Access Fund.

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Bailey said the proposal is centered around strengthening program integrity, mitigating fiscal cliffs, curbing spending and increasing operational effectiveness.

In the 2026-27 biennium, the proposed budget calls for disability services to be reduced by $280 million, nursing facilities by $68 million and behavioral health by $11 million.

“I understand, and we understand, the challenges that we're faced with with this budget but this recommendation quite frankly falls short in some areas,” said Rep. Mohamud Noor (DFL-Mpls), referencing serving older Minnesotans and Minnesotans with a disability.

It’ll be difficult to address Minnesotans’ needs without a good plan, Noor said.