SAINT PAUL, Minn. – Today, the Minnesota House passed HF 2434, the Human Services budget bill. The bill reflects the difficult decisions made by the House DFL and Republican caucuses to address uncertain future federal funding, growth in the number of people needing services, and the GOP’s refusal to properly support needed services by having large corporations and the ultra-wealthy pay their fair share. While there are investments in disability and nursing home workers, the bill largely consists of spending reductions and cost-shifts over the next two budget cycles. However, thanks to DFL efforts, this bill makes a strong effort to minimize long-term negative impacts.
The bill contains much-needed wage increases for both nursing home workers and disability professionals. These workers have been underpaid and undervalued for the work they do for too long and this bill takes a significant step in the right direction. Adhering to the new rules adopted by the Nursing Home Workforce Standards Board, nursing home workers will see an average minimum wage increase of $1.50 per hour, and the costs to the state will be defrayed by allowing these workers’ wages to be reimbursed by Medical Assistance (MA). Disability service workers represented by SEIU will also receive an important wage increase to bring their wages closer to levels reflecting the true value of their work; this investment will increase costs in the next biennium by $70 million.
“This year’s Human Services budget process was difficult as we had to make significant cuts to services that Minnesotans rely on. The fact is that we need to increase our investment in human services, not decrease it. But, with Trump’s mismanagement of the economy and direct attack on social services, and House Republicans’ refusal to ask ultra-wealthy Minnesotans pay their fair share, we are faced with a looming crisis that we need to prepare for,” said Rep. Mohamud Noor (DFL – Minneapolis), Co-Chair of the Human Services Committee. “This bill is still a work in progress as we have to negotiate a compromise position with our Senate counterparts. But it is clear that human services will continue to suffer as long as Trump and Republicans have full control at the federal level - especially with their ongoing efforts aimed at impeding Medicaid and slashing critical safety net programs.”
The largest share of the cuts – over $1.3 billion in the next two budget cycles – comes from a reduction in disability services, putting the burden of the cuts onto those who can least afford to bear them. The legislation works to soften this blow by shifting some of the cost for disability waiver rate exceptions to the counties and directing the Minnesota Department of Human Services (DHS) to create eligibility requirements for rate exceptions to limit the total number of exceptions. While this measure will adjust state spending by $155 million in the next biennium, it will now share some of the cost of these services with the counties.
The second major source of cost reduction under disability services ties the Disability Waiver Rate System (DWRS) to the Consumer Price Index for Urban Consumers, with a 4 percent cap annually. While this will significantly limit the rate at which disability services costs increase, saving $162 million in the next biennium.
Lastly, the legislation eliminates the 3.9 and 1.7 percent absence and utilization factor for disability services providers. These exceptions have outpaced the forecasted rate by more than 20 percent. Together, these amount to a $117 million savings in the next biennium. The reality is that these adjustments are difficult, but they could be far worse without our intervention, and the House DFL is ready to improve the system when we can.
This bill establishes robust program integrity measures designed to prevent fraud, waste, and abuse in Human Services Programs. In addition to the DWRS residential services reforms, substance use disorder, the legislation reforms how Early Intensive Developmental and Behavioral Intervention (EIDBI) programs are managed. It grants DHS the authority to develop and implement a formal license structure, investigate claims of maltreatment and fraudulent billing, and issue a moratorium of up to 24 months on new licenses if the agency determines the number of applicants exceeds the number of individual services needed.
The fiscal spreadsheets are available here. The complete bill language can be found here. Video of the floor debate on the bills can be found on the House Information YouTube page.
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