Dear Neighbor,
Work continues at the Capitol to prepare for the 2025 legislative session to begin Jan. 14 with a new landscape of power after Republicans gained equal control of the House last November.
This week, we filled out House committee rosters and continue making other personnel decisions. I have been closely involved with this process as the House Republican Speaker-designate.
Here is a look at a couple of other newsworthy items of late:
Action needed to avoid shortfall
The state recently issued a new economic forecast, projecting a $616 million surplus through the 2026-27 biennium – a decrease of $1.1 billion from previous estimates – and a significant future shortfall.
The forecast from Minnesota Management and Budget indicates reductions in income and sales tax revenues combined with higher spending for long-term care and special education result in a growing potential shortfall in the future. It also reveals a deficit of more than $5 billion through the 2028-29 biennium.
While the budget is stable in this biennium, it’s obvious that spending reductions are needed to prevent a deficit down the road. This underscores the need for balance after one-party control in St. Paul spent the state’s $18 billion surplus, raised taxes by $10 billion and increased the state budget by 40 percent. An updated February forecast will serve as the official framework for the 2025 session as we work to set a new two-year state budget before adjourning in late May.
More state mismanagement revealed
This week we received yet another non-partisan audit revealing serious mismanagement and lost taxpayer revenue in Minnesota.
This time, a report issued Tuesday by the Minnesota Office of the Legislative Auditor indicates the Department of Human Services “did not comply with the significant finance-related legal requirements we tested and generally had inadequate internal controls,” has not attempted to recover substantial overpayments totaling more than $40 million to Medical Assistance providers, and has not accurately reported its accounts receivable balance to Minnesota Management and Budget for inclusion in the state’s financial statements since 2019.
It’s shocking that the Department of Human Services still does not have processes in place to stop and prevent waste of taxpayer dollars. Even more concerning are the apparent accounting practices that are inaccurate at best, or deceptive at worst. DHS is failing at its basic responsibilities, and once again there has been no accountability from the governor or his administration.
Republican committee chairs are sending formal letters to all 25 state agency commissioners, requesting detailed information on department expenditures, potential areas for cost savings, how to increase efficiencies, and areas for budget reductions within their agencies. This is the first step in House Republicans’ efforts to rein in out-of-control spending and stabilize Minnesota’s long-term budget outlook.
This audit is just the latest in a series of reports revealing rampant fraud and waste in Minnesota departments and programs, from Feeding our Future to childcare assistance, frontline worker pay, and DHS and the Department of Education, costing Minnesota taxpayers hundreds of millions of dollars.
On top of all that, just today we received news that officers with the Federal Bureau of Investigation have served search warrants in Minneapolis and St. Cloud as part of a wide-ranging Medicaid fraud investigation. We may take a closer look at this development in an upcoming newsletter.
Watch for more from the House on these and other issues soon. Until then, please stay in touch and let me know how I can help!
Sincerely,
Lisa