July 20, 2011
How did Minnesota children and families fare in the final Health and Human Services budget?
See new analysis. Please check back in the coming weeks for more information on Minnesota’s budget for Fiscal Years 2012-13 and its impact on Minnesota children and their families.
Following 19 days of government shutdown, the special legislative session began on July 19 and ended 13 hours later on July 20. The Republican controlled Legislature (Republicans hold 72 of 134 seats in the House, and 37 of 67 seats in the Senate) and DFL Governor Mark Dayton could not reach an agreement on how to resolve Minnesota’s $5 billion revenue shortfall prior to midnight on June 30. As a result of this impasse, our State entered its second government shutdown in its history – the longest shutdown in our country’s history.
Two weeks into shutdown, Governor Dayton and legislative leaders agreed to a framework for resolving the budget deficit. Under the agreement, Minnesota will spend $35.4 billion during Fiscal Years 2012-13 (July 1, 2011 – June 30, 2013). Because this amount of spending is $1.4 billion more than expected revenue, they agreed to borrow the difference. Half of the needed revenue will come from increasing the size of the payment shift to school districts; the other half will come from issuing state bonds against future payments from tobacco companies. Governor Dayton and legislative leaders also agreed to $2.2 billion in service cuts.
CDF-Minnesota is extremely disappointed that the final budget compromise did not include fair and progressive revenue. Borrowing to pay for our State’s obligations, especially when clear and just alternatives exist, is shortsighted. Furthermore, relying on $1.4 billion in one-time funds guarantees that Minnesota will be faced with the same challenges in less than two years.
Health and Human Services Budget
In the early morning hours of July 20, 2011, the Legislature passed a bill detailing the final Health and Human Services (HHS) budget for Fiscal Years 2012-13. Later that day, Governor Mark Dayton signed the bill into law. While CDF-MN believes that critical programs and services for Minnesota children should never be the subject of budget cuts and that our State should always prioritize investments necessary for the healthy development and well-being of our children (especially during difficult economic times), we are relieved that many of the cuts proposed in the Legislature’s earlier HHS budget (Senate File 760) were not included in the final budget. In fact, thirteen policy changes and program cuts totaling approximately $25 million were not included in the final budget bill.
Unfortunately, the HHS budget includes more than $81 million in cuts impacting the lives of our State’s youngest citizens and their families. (note: cuts to adult mental health grants and the MFIP Consolidated Fund, and $6.6 million in insufficient funding for Adoption Assistance and Relative Custody Assistance were not included in the calculation). While each cut is harmful on its own, many Minnesota children and families will be severely impacted by multiple cuts, thereby increasing the need for deeper, longer-term and costlier services in the future.
The following proposals, which would have negatively impacted Minnesota children and their families, were removed from the final HHS bill:
- Cut to Home Visiting grants ($7 million cut in federal funding would have impacted at least 1,100 children and parents per year)
- Cut to Child Welfare Reform and Early Intervention grants ($786,000 cut would have impacted 1,900 families per year)
- Cut to Indian Child Welfare Act Transfer to R21 grants ($1.5 million cut would have impacted 1,400 children per year)
- Cut to Children’s Mental Health Screening grants ($3.8 million cut would have impacted 4,500 children per year)
- Cut to Children’s Mental Health Cultural Competence grants ($300,000 cut would have impacted 175 children per year)
- Cut to MFIP assistance for families with a disabled parent ($4.1 million cut would have impacted 6,400 families per year)
- MFIP training and education restrictions ($315,000 cut would have impacted 800 families per month)
- Cut to Migrant Child Care grants ($170,000 cut would have impacted 425 children per year)
- Elimination of General Assistance ($38.2 million cut would have impacted 20,000 Minnesotans, including 68 homeless, unaccompanied youth, per year)
- Repeal of policy exempting children from MinnesotaCare income limit ($6.4 million cut would have impacted 4,400 children per month)
- Repeal of automatic MinnesotaCare eligibility for children exiting foster care ($347,000 cut would have impacted 250 children per month)
- Change in MinnesotaCare eligibility reviews from 12 months to 6 months (change would have impacted 670 children per month)
- Move parents above 133% FPG off of MinnesotaCare and into the newly created Minnesota Defined Contribution Program ($36.3 million cut would have impacted 6,200 parents per month)
The following cuts and policy changes, which will negatively impact Minnesota children and their families, were included in the final HHS bill:
- Cut Children and Community Services Act (CCSA) grants ($22 million cut will impact 51,000 children per year)
- Cut Adult Mental Health grants ($13.6 million cut will impact thousands of adults, including many parents, per year)
- Insufficient funding for Adoption Assistance and Relative Custody Assistance (though funding was increased by $6.2 million, 403 children per year will be impacted by $6.6 million in insufficient program funding)
- Cut MFIP Consolidated Fund ($20 million cut will impact many of the 40,000 families who receive MFIP assistance each month)
- 2.5% reimbursement rate cut for all child care providers ($6.6 million cut will impact 18,000 families per year)
- 12% reimbursement rate cut for legally, non-licensed child care providers ($6.5 million cut will impact 4,000 families per year)
- Limits time an adult family member, who is not in an authorized work or education activity, can be temporarily absent from home (19 families per month will be impacted)
- Prohibits CCAP payments for child care provided by someone who resides in child’s home (170 families per month will be impacted)
- Restricts CCAP payments for child care provided in child’s home (900 families per month will be impacted)
- Eliminates payments to providers for activity fees (155 families per month will be impacted)
- Eliminates absent day payments for FFN child care providers, and limit absent day payments to 10 days per calendar year for licensed providers & license-exempt centers (19,000 families, including 34,000 children, receive child care assistance each month. Any family receiving assistance could be impacted)
- Prohibits payments that exceed daily and weekly maximum rates for centers and licensed family providers, and limit payments to legally, non-licensed providers to no more than 50 hours per week (810 families per month will be impacted)
- Increases registration requirements for legally, non-licensed providers to include First Aid and CPR and additional training every two years (3,500 families per month will be impacted)
- Cuts Child Care Service Development grants ($500,000 cut)
- Cuts Child Care Resource and Referral grants ($600,000 cut)
- Cuts Child Care Facility grants ($326,000)
- Reallocates unspent Basic Sliding Fee Child Care Assistance grants ($5 million cut will impact 500 families per year)
- Repeals Medical Assistance Bridge program ($23.3 million cut will impact 13,500 children per month)
- Repeals MinnesotaCare premium grace month and renewal rolling month ($7 million cut will impact 1,900 families per month)
- Eliminates automatic renewal for MinnesotaCare children ($2.4 million cut will impact 1,700 children per month)
- Cuts Outreach grants ($88,000 cut)
Note. Numbers 7-13 affect Minnesota’s Child Care Assistance Program (CCAP) and total $6.8 million in cuts.
 This amount does not include the proposed $38.2 million elimination of General Assistance or funding related to the Minnesota Defined Contribution Plan.
 This amount does not include cuts to Adult Mental Health grants and the MFIP Consolidated Fund, and $6.6 million in insufficient funding for Adoption Assistance and Relative Custody Assistance.