Dear Neighbors,
Here’s a reminder about the Town Hall Meeting tonight I’m hosting along with my fellow Senate District 50 legislators – Sen. Alice Mann and Rep.-elect Julie Greene – at the Southdale Library in Edina. We will gather from 6:45-7:45 pm. Please consider bringing a canned food donation for VEAP’s food pantry. I look forward to seeing you, hearing about your priorities, and answering your questions ahead of the 2025 Legislative Session.
State Budget
As you may have heard, the November Economic Forecast was recently released projecting a $616 surplus for the coming biennium. Last year, we deliberately left $3.7 billion on the bottom line, and we currently have the strongest budget reserve in state history at $3.5 billion. We also have a more honest overview of the state budget outlook because inflation is now projected on the spending side of the ledger as it was previously on the revenue side. Overall, our economy remains strong and resilient because of the investments we deliberately made in workers, students, and families.
However, as we peek across the horizon, there are reasons for caution with a deficit looming in Fiscal Years 2028-2029. A structural imbalance is growing, with 70% of it driven by increasing costs in two main areas: special education and long-term care. Last weekend, the Star Tribune took a deep dive into the fiscal situation surrounding these topics, both of which are critical responsibilities of state government that help Minnesotans grow, succeed, and live with dignity.
Since 1975, the federal government has promised to pay 40% of special education costs. This commitment has never come close to being fulfilled, with the actual share of federal payments closer to 15% leaving school districts to fill the gap themselves. In the last state budget, lawmakers provided an ongoing increase in special education funding of $662 million in the current biennium with an additional $820 million in the coming biennium. Schools are identifying more students who need extra help in the classroom, which is stretching special education staff thinner, so districts are increasingly relying on contracting agencies to provide workers, which comes at an increased cost.
Looking at the other end of the age spectrum, demographers have long warned of the “silver tsunami.” The leading edge of the baby boomer generation is fast approaching the age of 80, at which point, the need for senior services begins to rise exponentially, and will continue to for at least another decade.
The Legislature has increased long-term care funding in several areas. For Community First Services and Support (formerly Personal Care Assistance), lawmakers appropriated $341.6 million in the FY24-25 biennium, with $547.8 million in FY26-27. For nursing homes, we provided $173.5 million in one-time facilities grants, $36.5 million in the current biennium and $15 million in the next biennium for a temporary rate add-on, and $75 million for a new workforce incentive grant fund. We funded critical access nursing facilities ($2.5 million in FY24-25 and $3.33 million in FY26-27) and provided $100 million for a distressed nursing home facility loan program.
Like in special education, we have a vast shortage of nursing home and in-home care personnel. We’ve begun working on solutions to raise wages and help attract workers to these professions, but we have much more to do so older Minnesotans can receive the care they deserve.
As we look forward, we must recognize the Budget Forecast is just that – a forecast. Just like potential snow accumulation, it’s not unusual for projections to change over time. We’re scheduled to receive an updated economic forecast in February, and thereafter, lawmakers will assemble a new state budget – unquestionably the Legislature’s biggest responsibility. My DFL colleagues and I are prepared to work in a bipartisan, collaborative fashion to pass a new state budget that will improve people’s lives. We’re also committed to budgeting in a way that’s sustainable, responsible, and strengthens our long-term budget outlook.
Keep in Touch
Don’t hesitate to reach out if I can provide any assistance. Please follow me on my Facebook page for further updates and invite your friends and family to do so as well.
Thanks for the honor of representing you at the Capitol.
Sincerely,
Steve Elkins
Representative, District 50B