MMB presents 2025 operating adjustments, oversight hires and DCYF transition reappropriation to committee

Minnesota Management and Budget Commissioner Erin Campbell and Deputy Commissioner Bridal Rayton told the Senate Committee on State and Local Government on Feb. 18 that the governor's 2025 budget recommends operating adjustments and targeted staffing to cover rising costs and strengthen financial oversight.

The proposal seeks funding to offset “growing costs related to maintaining our services and operations,” Rayton told the committee, citing compensation, employer-paid health care contributions, FICA and Medicare, utilities and IT services. The package includes new full‑time equivalents for MMB's internal control team, payroll services, enterprise labor relations and accounting services to expand agency oversight and compliance work.

MMB also proposed cancelling and reappropriating part of a transition appropriation for the new Department of Children, Youth, and Families. Rayton said MMB was appropriated $10,000,000 for the DCYF transition account, and the governor's recommendation would cancel $8,500,000 of that appropriation and reappropriate $6,000,000 directly to DCYF for final transition expenses such as relocation and IT migration. Rayton said reappropriating the funds to DCYF allows the state to draw down federal reimbursement of $1,920,000, producing a net general-fund savings of $4,420,000.

Why it matters: MMB described itself as the steward of the state’s fiscal and human resources, and Rayton told the committee the agency manages a relatively small operating budget but touches statewide spending: MMB’s annual all‑funds operating budget is roughly $72,000,000 and it directly manages about $3.4 billion annually, the presentation said.

Committee members pressed MMB on the reappropriation and on broader authority the governor seeks to let agencies carry forward unexpended non‑grant operating appropriations into the next biennium. Senator Gustafson asked where the unspent $2,000,000 would go after the proposed cancellations; Rayton replied that reappropriation to DCYF enables greater federal drawdown and that the plan results in the $4.42 million general‑fund savings figure she cited. Several senators, including Senator Drazkowski, questioned whether allowing enterprise‑wide carry‑forward authority would reduce legislative control over appropriations; Commissioner Campbell said the proposal would apply across state agencies to give executive branch agencies added flexibility to manage costs between biennial years in the face of projected deficits in 2028–29.

MMB also proposed reducing one previously earmarked data-disaggregation appropriation by $1,700,000 and eliminating a statutory transfer to a housing support account that MMB said had not yet been programmed; the agency estimated that eliminating that transfer would save $450,000 per year beginning in FY25. Rayton said the agency has taken internal steps to contain costs, including reducing office footprint and improving automation.

The presentation framed the staffing requests as responses to recent audit findings and workload increases. Rayton said four additional FTEs are proposed for statewide payroll services in response to an Office of Legislative Auditor audit related to retroactive pay adjustments; two FTEs are proposed for enterprise labor relations to help implement collective bargaining agreements; two FTEs for accounting services would support statewide policy updates; and three additional internal‑control FTEs would strengthen MMB’s oversight capacity.

No formal committee votes were recorded in the transcript. The discussion closed with members thanking the commissioners for their presentation.

Ending: Committee staff indicated bill language would be circulated in a future hearing for formal consideration; commissioners and staff said they would return for follow-up questions as negotiations proceed.