The majority’s Human Service budget, HF 2434, today passed out of the Senate without strong bipartisan support. The legislation cuts more than $1 billion from long-term care and disability services over the next four years.

It drew sharp criticism from Senate Republicans for its misplaced priorities, failure to crack down on fraud, and deep cuts to long-term care facilities and disability services. The original budget included a major property tax hike disguised as a budget solution, but a key Republican amendment eliminated all county cost shifts.

Fails to crack down on fraud

Back in January, Senator Jordan Rasmusson (R-Fergus Falls), Republican lead of the Senate Human Services Committee, chaired a hearing dedicated to program integrity and fraud prevention within the Minnesota Department of Human Services (DHS). The committee focused on understanding ways for the agency to strengthen oversight, ensure taxpayer dollars are spent wisely, and guarantee that state services only reach their intended purposes. Despite this, the Senate’s Human Services budget fails to include sufficient measures to strengthen accountability or address fraud.

“As noted by U.S. Attorney Andy Luger, ‘Minnesota has a fraud problem,’” Sen. Rasmusson said. “Our state is a national outlier when it comes to human services fraud, yet the Senate’s budget does little to address it. With a looming $6 billion deficit, we cannot afford to ignore waste and abuse. Taxpayers – and the Minnesotans who depend on these services – deserve better. It is time for stronger safeguards and smarter tools to stop fraud before it happens.”

To address some of these concerns, Senate Republicans successfully introduced amendments aimed at cracking down on fraud within DHS.

• Hold DHS accountable to audit findings and fraud prevention: Adapts a version of HF 3 / SF 263 to require DHS to report on how it implements fraud-related and other recommendations from the Office of the Legislative Auditor after an audit (Sen. Jordan Rasmusson, R-Fergus Falls)
• EIDBI (Early Intensive Developmental and Behavioral Intervention) licensure and program integrity modifications: Implements changes to address fraud in DHS autism services by tightening eligibility for payments and regulating which entities can provide these services (Sen. Jim Abeler, R-Anoka)

Senate Democrats, however, rejected an important amendment offered by Sen. Glenn Gruenhagen (R-Glencoe) to crack down on fraud using AI tools. The proposal would have used existing DHS grant funds to deploy AI technology to detect fraud and protect taxpayer dollars.

Preserves taxpayer-funded benefits for illegal immigrants

Despite making more than $700 million in net budget reductions, Senate Democrats opted to preserve taxpayer-funded health care for undocumented immigrants through MinnesotaCare. Sen. Rasmusson is championing the Republican effort to repeal this expansion. The issue has gained both local and national attention, with Sen. Rasmusson appearing on Fox Business, KARE 11, WCCO Sunday Morning, and earning coverage in the Star Tribune.

“Senate Democrats will not cut a dime from health care for illegal immigrants, but they are slashing hundreds of millions from care for Minnesota’s seniors and people with disabilities,” Sen. Rasmusson said. “Unlike other programs eligible for a federal match, this one is paid for entirely by state taxpayers. That means we could lose out on hundreds of millions in federal funding that should be going to essential services. We need to put Minnesotans first.”

Since the program launched in January 2025, 17,396 undocumented individuals have enrolled in MinnesotaCare, nearly triple the original first-year estimate of 5,874. As a result, cost projections have risen to over $600 million over the next four years. The Minnesota Center for Fiscal Excellence is also warning that Minnesota is heading down the same path as states like Illinois and California, where expenses quickly spiraled out of control.

In response, Senate Republicans offered amendments to repeal this policy and redirect the funding toward seniors and disability services. Democrats, however, refused to even debate this critical issue, using procedural rulings to block discussion.

• Support Minnesota nursing homes: Repeals MinnesotaCare for illegal immigrants and uses the savings to remove the 4% cap and quality threshold on nursing homes (Sen. Glenn Gruenhagen, R-Glencoe)
• Preserve funding for disability waivers: Repeals MinnesotaCare for illegal immigrants and reallocates those funds to protect disability waiver services, including day and unit-based services and limiting rate exceptions (Sen. Paul Utke, R-Park Rapids)

Sought to shift costs to counties and taxpayers

During the floor debate, Senate Republicans criticized the Human Services budget for shifting millions in costs to counties, raising the burden on property taxpayers. Local governments are facing a staggering $192 million in additional costs due to these budget changes. County officials have warned that Gov. Walz’s budget proposal with these cost shifts could lead to property tax hikes of 5% to 10% in many communities.

Senator Jim Abeler (R-Anoka) successfully introduced an important amendment to eliminate county cost shifts and better target resources to those most in need. The proposal right-sizes eligibility of the CADI waiver, prioritizing those with the highest needs and finds efficiencies in licensing and assessment processes.These savings will eliminate the county cost shifts, restore rates for disproportionate share facilities, and reinstate family foster care rates.

“These so-called ‘cost shifts’ would have unfairly pushed the financial burden of state-run human services programs onto local governments. Counties would have had no choice but to raise levies just to keep up. This was a property tax hike in disguise, and I am grateful we found a solution that removes it from the bill,” Sen. Rasmusson said.

Cuts funding for long-term care facilities

Additionally, Senate Republicans opposed the Senate Human Services budget for its significant cuts to services for Minnesota’s most vulnerable populations. The legislation includes more than $1 billion in reductions over the next four years that will hit long-term care facilities, disability services and nursing homes across the state. At the same time, the Human Services policy bill, which passed the Senate today without strong bipartisan support, adds expensive and burdensome new mandates and regulations for long-term care providers.

“In 2023, Senate Republicans made Minnesota’s nursing homes a top priority,” Sen. Rasmusson said. “We secured a $300 million lifeline to keep these facilities open. Unfortunately, this year’s Human Services budget reverses that progress and puts essential care for our seniors at risk.”

Sen. Rasmusson successfully introduced an amendment to help keep Minnesota’s nursing homes open. It redirects $50 million in unspent nursing home loan funds to support Critical Access Nursing Facilities (CANF), while retaining $25 million in the loan program. This will repurpose unused funds to assist nursing homes in rural areas, ensuring they stay operational and continue serving their communities.

The legislation now moves to a conference committee, where House and Senate members will finalize the details.