Dear Neighbor, Greetings from the House, where a recent report issued by the Office of the Legislative Auditor calls out the Department of Human Services for its inaction on illegal kickbacks. Here is more on that and other developments at the Capitol:  Auditor says DHS was wrong For years, credible allegations of illegal kickbacks tied to the Early Intensive Developmental and Behavioral Intervention (EIDBI) program were brought to the attention of the Walz Administration, which repeatedly refused to investigate, citing incorrectly that “it lacked the authority to act.” I publicly asked DHS Commissioner Shireen Gahndi about this issue more than a year ago during a Fraud Prevention Committee meeting. Here is the transcript of my direct question: “You just said, I think, that it’s federally illegal to do kickbacks, but you can’t stop it here in the state of Minnesota because it’s not illegal in the state of Minnesota. So, if it’s federally illegal and some money is federal money coming through Minnesota in all kinds of different forms and fashions through DHS – billions and billions of dollars come from the federal government – help me understand why we think here in Minnesota that we can’t stop kickbacks when it’s federally illegal to do so. Help me understand that.” Gandhi’s response: “I believe the issue is we are not able to prosecute it effectively.” OK, if that’s so, then how about turning cases over to our federal partners – the FBI and others – as was the case with Feeding our Future? Instead of doing that, DHS officials just shrugged their shoulders and literally allowed suitcases filled with millions of dollars to fly out of our state for a decade or even longer. Between 2018 and 2023, reports show the number of autism providers grew by 700%, increasing from 41 to over 300. Meanwhile, Medicaid payments for the EIDBI program rose from approximately $6 million to nearly $192 million during the same period. This week’s report from the nonpartisan Office of the Legislative Auditor found that, despite those false claims by DHS, the state absolutely had the authority to investigate illegal kickbacks the entire time. In reality the department didn’t need “action from the Legislature,” it could have simply amended its own policies to investigate kickbacks and stopped this massive theft in the EIDBI program. This is yet another example of the Walz Administration’s complete incompetence to safeguard taxpayer dollars. The worst part, Ms. Ghandi was recently appointed by Walz to serve as the permanent DHS Commissioner, further doubling down on his unwillingness to take fraud seriously. While Walz remains unserious, House Republicans are committed to passing additional reforms identified in the OLA report to tighten oversight and safeguard your tax dollars. Higher Education On Tuesday, March 17, an interesting discussion happened in the Higher Education Committee. We were hearing H.F. 4266, which changed how the student aid index (SAI) is calculated. The federal government, in 2021, changed federal law to recognize a negative $1500 SAI when determining a student’s family’s expected contribution. Students could then get up to $1,500 in extra state grant money after the grant paid for tuition, fees, room and board. This extra money could be spent on literally anything, including spring break trips and beer. Two years later, in 2023, the Democrat trifecta passed the North Star Promise (free college for families making $80k or less) and changed the law to recognize this negative $1,500 SAI. The net effect of these changes created a $100 million hole in the State Grant Program in 2025, that we closed last session only to have the hole back again in January 2026, this session, to the tune of $102 million. To put that in perspective, one year’s worth of state grants is $222 million  By passing H.F. 4266, $33.5 million would be saved from the State Grant Program this biennium by not recognizing amounts below $0 SAI for a family’s expected contribution. A Democrat committee member, Rep. Mohamud Noor, opposed the bill, saying, “This bill goes backwards because we're not allowing them to be able to afford college. Some of them end up having student loan debt, which they did not sign up for that. So how are we going to balance that, shifting the costs to the students who need the most.” To the contrary, the author of the bill said the intent is to make sure the program stays solvent and available to serve as many students as possible. Reasonable changes are necessary to get the State Grant Program back on a path to sustainability after policy changes were adopted federally and in Minnesota by the Democrat trifecta. This change was also in the Governor’s recommendation which had been published earlier that day. The bill was laid over for possible inclusion in an omnibus bill. “Free” tax relief blocked On Monday, March 16, House Republicans made a floor motion to declare urgency to bring up for debate and vote on legislation that would provide immediate tax relief to Minnesota businesses – at absolutely no cost to the state – but House Democrats blocked it. The bill (H.F. 3127) would allow businesses to take advantage of a new federal provision. The Republican co-chair on the House Tax Committee stated that passing that bill would deliver an estimated $2.05 billion in tax relief to approximately 66,000 businesses. Unfortunately, House Democrats voted against the motion to even have the debate on the bill, so now businesses will be sending those dollars to the federal government instead of staying in Minnesota. This is the second time in as many weeks House Democrats have stood in the way of Minnesotans’ ability to benefit from federal tax provisions that are zero cost to the state. They previously objected to Minnesota participating in a federal program that could provide more education funding for our children. |