MMB presents governor's 2025 budget requests including oversight staffing, DCYF re‑appropriation and carry‑forward authority

Erin Campbell, commissioner of Minnesota Management and Budget, told the Senate Committee on State and Local Government on March 6 that the governor’s 2025 budget recommendation for MMB focuses on covering growing operating costs, strengthening oversight and providing flexibility to agencies facing future budget pressure.

"At MMB, we serve as stewards of the state's financial and human resources," Campbell said, summarizing the agency’s role and the scope of its work. She and Deputy Commissioner Bridal Rayton walked senators through a package that includes operating adjustments, new internal controls staff, payroll compliance positions, and a proposal to permit agencies to carry non‑expended operating appropriations into the next biennium.

The package seeks additional staffing across several units: three full‑time positions for the internal control and accountability unit, four FTEs for statewide payroll services to address a recent Office of Legislative Auditor audit, two FTEs for enterprise labor relations and two for accounting services to revise statewide financial policies. Rayton said the payroll positions would support a certification program for payroll specialists and increase compliance reviews of agency payroll practices.

Campbell described the agency’s scale and recent performance data to frame requests: MMB employs about 360 staff, manages a $72 million operating budget that represents roughly 2% of the state resources it oversees, directly handles more than $3.4 billion annually (largely debt service), administers insurance for roughly 31,000 state employees and families, issues about 48,000 vendor payments weekly and processes 56,000 paychecks every other week. She said MMB helped the state maintain the highest bond ratings and that recent refinancing saved the state about $69 million.

The presentation included several specific budget transactions. MMB would cancel $8.5 million from its DCYF transition account in FY2025 and reappropriate $6 million to the Department of Children, Youth and Families for transition costs expected after the biennium; Deputy Commissioner Rayton said reappropriating funds directly to DCYF allows the state to draw down federal reimbursements and produces an estimated $4.42 million net general fund savings when federal participation is included. Rayton also described a one‑time reduction of $1.7 million to general fund resources intended to help address projected deficits in the 2028–29 biennium, and recommended eliminating a statutory transfer of $4.45 million per year from the general fund to a housing support special revenue account, which the administration said would save about $450,000 annually beginning in FY2025 because the transfer has not yet been programmed for a specified purpose.

Another administration proposal would allow agencies to uniformly carry forward unspent, non‑GRAMA operating appropriations for the second year of a biennium into the next biennium; MMB estimated that change would reduce forecasted general fund cancellations in the second year by about $15 million and provide agencies an additional tool to manage year‑to‑year cost pressures.

Senators pressed MMB officials on details. Senator Gustafson asked where the difference between the canceled and reappropriated DCYF funds would go; Rayton reiterated that reappropriating funds to DCYF enables federal reimbursement and explained the $4.42 million general fund savings figure. Multiple senators, including Senator Drazkowski and Senator Maquette, questioned whether expanding executive‑branch flexibility to carry funds forward would reduce legislative control over appropriations and whether the administration was seeking more authority to spend without corresponding authority to reduce spending. Commissioner Campbell responded that the carry‑forward proposal is an enterprise‑wide tool intended to provide flexibility across state agencies and that program reductions generally require legislative action.

Senators also asked how MMB is accounting for federal funding uncertainty when preparing forecasts. Campbell said the official forecast is based on current law and a range of macroeconomic indicators; she told the committee the March 6 forecast will incorporate available data but said the administration is particularly concerned about potential federal changes to entitlement programs such as Medicaid, which could present a significant budget risk if enacted and if timing places impact after the forecast but before final budget decisions.

Discussion at the hearing clarified several implementation and oversight details rather than producing a committee vote. No formal actions or legislative language were adopted during the meeting; committee members asked questions and MMB officials described the administration’s requests and rationale.

Looking ahead, MMB officials said they will work with the legislature on the proposals and provide additional details, including the forecast results and any updated federal developments, as the budget process continues.

Ending: The presentation closed with an acknowledgment of ongoing fiscal uncertainty and MMB officials’ request that the committee consider the administration’s proposals for additional oversight positions, the DCYF technical reappropriation and the carry‑forward authority as tools to manage state finances in the coming biennium.