Minnesota officials warn federal budget moves could cut Medicaid funding, freeze dozens of grants

State budget officials told a Minnesota Senate committee on Feb. 27, 2025, that federal actions and proposed congressional changes could disrupt nearly $23 billion in federal awards administered by the state and reduce federal Medicaid funding by more than $1 billion a year, creating large budget pressure for Minnesota.

Anna Mingi, state budget director with Minnesota Management and Budget, told the Senate Finance Committee — joined by members of health and human services panels — that state agencies administer almost 700 federal awards representing “almost $23,000,000,000” in state fiscal year 2025 and that just over a third of the state’s total spending comes from federal funds. She said 56% of those federal awards — just under $13 billion — support state entitlement spending, primarily health and human services programs and education.

The magnitude matters because many of those dollars are matched entitlement payments: “Medicaid is, by and large, the largest federal funding stream flowing to the state of Minnesota, representing more than half of our total federal funding, or almost $12,000,000,000 this year,” Mingi said. She and Dave Greenman, chief financial officer for the Department of Human Services, warned that several federal developments could sharply reduce that support.

Mingi described recent disruptions to access for some federal awards after an…