Counties, families warn governor's budget cuts to disability waivers would shift costs and shrink services

Saint Paul — Parents, disability providers and county officials told the Minnesota Senate Human Services Committee on Tuesday that elements of Gov. Tim Walz’s proposed budget would shrink access to disability waiver services, destabilize a fragile provider workforce and transfer large costs to counties and local taxpayers.

Advocates and county leaders testified that several provisions in the governor’s human services proposal — including capping scheduled inflationary increases, limiting certain billing rules and imposing a new county cost share — would make it harder for people with disabilities to get services they now receive and for providers to remain solvent.

“The governor's policy and budget proposals for autism … have failed again the autism community,” said Bridal Abdul, who identified herself as a Somali autism parent and advocate. “Train families, train providers and hold everybody accountable.”

Why it matters: Disability waivers fund home- and community-based services that many Minnesotans with disabilities rely on for daily supports, therapy and respite care. Witnesses said cutting those funds or shifting them to counties could force providers to reduce services, leave rural areas and raise local property taxes to cover the gap.

What speakers said - Anissa Haji Mohammed, board chair of Mongad Voices, told the committee the governor’s proposal to cut waivered services — which she said would eliminate $1.2 billion over multiple years — treats waiver programs as discretionary rather than lifesaving. “Waivers are not a luxury. They are a lifeline,” she said. - Johnny Tavets, policy manager for ARM, a trade association for disability waiver service providers, warned that proposals to cap inflationary adjustments at 2%, limit rate exceptions and cap billable days at 351 per year would “destabilize and dismantle an already fragile system,” and he repeated the administration’s own projection of $1.3 billion in cuts to waiver services over four years. - Wade Stivey, a parent from Fergus Falls whose son receives services through the DD waiver, described how consumer-directed supports enabled his family to hire respite workers and preserve their son’s community ties. “So many families depend on it,” Stivey said. “Please don't cut the DD waiver program.” - Laurie Schluttenhofer, co‑president and CEO of Opportunity Partners and chair of MORE (a statewide trade association of disability providers), highlighted two technical elements in the budget: a proposed rollback of the absence and utilization factor for day services (from 9.4% to 3.9%) and a cap on scheduled inflationary adjustments — which she said would translate to a much smaller increase than the 14% providers expect for 2026. She noted every state dollar for waivers draws federal Medicaid matching funds, so state cuts would magnify losses. - County officials, including Julie Jepsen, Anoka County commissioner; Stacy Hennen, legislative champion for the Minnesota Association of County Social Services Administrators (MAACSA); and Nicole Hansen, Otter Tail County administrator, said the governor’s suggested cost shifts would sharply increase local levies. Hennen said the governor’s proposal could add $395,000 annually to Traverse County’s bill; Sen. John Rasmussen later noted that equates to roughly $280 per household in that county.

County leaders underscored that Minnesota’s human services system is state-supervised and county-administered: counties deliver services under state policy and argued many of the areas targeted for cost shifts are ones where counties have little control over costs or placements. “Shifting costs related to our most vulnerable Minnesotans onto property taxes will create inequities in access to services,” said Katie Molinere, deputy director of Ramsey County social services.

Workers and unions also urged funding for frontline staff. Carrie Adleman, a home care worker who testified for SEIU Healthcare Minnesota & Iowa, praised targeted investments in minimum wage and a tentative contract settlement that the governor proposed to fund, but noted those increases are contingent on legislative funding.

Details and numbers cited at the hearing - Testimony referenced a proposed new 5% county share for disability waiver services, with statewide estimates of $82 million in 2027 and growing in later years, and Ramsey County projecting roughly $13 million annually if the shift occurs (about a 4% tax levy increase for Ramsey, per testimony). - Witnesses said the administration’s proposals could roll back the absence and utilization factor for day services from 9.4% to 3.9% (affecting providers’ ability to staff and run programs when participants are absent for health reasons). - Providers warned that capping scheduled inflationary adjustments at 2% every two years would fall far short of the 2026 data-driven increase providers expect (around 14% in their examples). - Parents and providers repeatedly said that reductions would threaten services in Greater Minnesota and increase closures of provider sites already struggling with workforce shortages.

Discussion versus decisions No formal committee votes or motions occurred at the hearing. The session was a listening and testimony opportunity; members repeatedly invited providers and counties to participate in follow-up work to craft alternatives and urged the governor’s office and DHS staff to engage on solutions.

Context and next steps Committee members said the hearing was the start of a budget conversation and urged stakeholders to come to the table with concrete, implementable alternatives. Sen. John Rasmussen highlighted the local tax impact figures during committee discussion and called for numbers-based analysis as the discussion continues.

Ending note Multiple witnesses asked the Legislature to protect waiver funding, fully fund workforce increases and avoid shifting costs to counties. Several county leaders said they are willing to partner on administrative simplifications and targeted reforms to control costs without cutting services.