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HHS directors warn of $700K-plus budget gap as federal and state shifts increase workload
Summary
Health & Human Services leadership told the board they face a roughly $707,000 gap between revenue and expenses for 2026 and warned that federal SNAP and Medicaid administrative changes and state child-protection reforms could worsen the county's position in 2027.
Kelly (county finance staff) and HHS Director Becky presented the department's 2026 budget and warned of a structural shortfall the department is projecting.
Becky told commissioners the gap between projected revenue and expenses across Income Maintenance, Social Services and Public Health is about $707,000 for 2026. She said that amount aligns with an earlier management estimate that the department would need roughly $750,000 to reach a zero gap after removing reserves used in 2025.
A central cause, Becky said, is falling revenue allocations combined with rising administrative requirements. She flagged two policy shifts: a SNAP administrative cost shift that will hit federal fiscal year 2027 (which starts Oct. 1, 2026) and changes to Medicaid/SNAP verification that increase the frequency and complexity of recertifications. Becky said the SNAP cost shift would reduce county revenue by an estimated $25,000 per quarter in her office's planning, a loss that could compound into a six-figure reduction in 2027 if trends continue.
Becky also described a suite of program reductions proposed to keep 2026 balanced, including the elimination of mobile dental services and child medication management (a $9,000 line item), and not funding a small request from Central Minnesota Council on Aging (about $3,000). She said those reductions are nonmandated programs chosen because mandated services (child protection, certain placements and casework) cannot be cut without legal and safety consequences.
On child protection, Becky and Child Protection Supervisor Beth Jarvis urged the board that the county cannot reduce staff in units that will face new mandates. Becky said child protection has reduced out-of-home placement expenses since 2019 (from about $1.5 million in 2019 to a budgeted $582,000 for 2026) and credited focused casework and prevention, but warned that upcoming state changes (referred to in the meeting as MAP/ACT/CWDA-related reforms and "active efforts") will raise workloads and require more staff.
Becky listed options the board could consider to close the gap: increase the HHS levy, pause or eliminate some ongoing county payments to internal county programs (rent or revenue transfers), use reserves for a one-time gap (not sustainable long term), or reduce staff (the most consequential choice). She urged commissioners that reductions should avoid mandated service lines and noted that any cuts to casework would likely increase expensive placements later.
The HHS team also summarized program-level details: the veteran services office staffing request (separately discussed), the county's opioid settlement advisory plan (youth opportunity grants and salaries), and public-health program changes including a SHIP (Statewide Health Improvement Partnership) grant conversion to a single-county model that increases county-directed revenue.
Ending: Becky told the board that 2026 is a tight budget year and that 2027 will be tougher as SNAP/MAP/waiver cost shifts take effect; she asked commissioners to provide direction on levy, reserve use and priority services so staff can return with specific spending scenarios.
