Committee hears details on paused, canceled federal grants; child care, public health and energy awards at risk

Minnesota Management and Budget and Department of Human Services staff told a Senate select subcommittee that a mix of federal pauses, cancellations and pending federal reviews threatens funding for public health, child care, energy and other programs.

MMB's snapshot: Anna Menge said MMB's tracker shows about six awards on hold totaling roughly $491,000,000 (four in public health and two in clean energy/climate) and that 13 specific awards have been canceled; she also said the list of impacts would be longer if the tracker captured every pause or threatened withdrawal.

Public health and litigation: Menge said the Centers for Disease Control notified Minnesota of the cancellation of two grants and the intent to cancel three more, with the largest affected award being a $65,000,000 public-health infrastructure grant; a multi-state lawsuit produced a temporary restraining order on Feb. 12 that paused those terminations while litigation proceeds.

Child care, TANF and service losses: Menge told the committee the Child Care Development Block Grant (CCDBG), which funds the Child Care Assistance Program and many grants to providers, faces about $33,000,000 not yet drawn this fiscal year and roughly $123,000,000 next fiscal year; she added an estimated $196,000,000 of lost services over the remainder of the biennium if funds are not available. For TANF, MMB counted about $52,000,000 not yet drawn this year and $127,000,000 next year (roughly $180,000,000 exposure).

Specific small and targeted grants: MMB identified a canceled Targeted Violence and Terrorism Prevention Program award (Department of Public Safety, FEMA) with about $445,000 canceled and a Justice Reinvestment Initiative award to the Department of Corrections (Office of Justice Programs) with about $400,000 canceled.

DHS implementation planning: Elise Bailey, DHS budget director, said her agency is working with counties and other states to map how to implement new work-reporting requirements absent federal guidance. "We are mapping out right now what kind of systems, adjustments we could do in the background to mitigate both workload at the county level, but also mitigate people falling off of the program even when they're still eligible," she said. Bailey described plans to use electronic tools and competitive RFPs for vendors to help process additional documentation.

Local impacts and county capacity: Senators pressed how counties will absorb new administrative costs (SNAP admin share drops and work-reporting increases). Members cited county planning estimates (one member referenced Dakota County anticipating personnel additions and a possible 9% levy increase) and asked whether lost grant flows could force service reductions or higher local taxes.

What this means: MMB and DHS stressed that some funding interruptions are paused by litigation or injunctions, while others are final cancellations; both agencies said they will continue to track awards and provide updates to the committee. DHS and counties will face significant administrative burdens to meet new federal requirements if guidance arrives without lead time.