Hennepin County reports staffing dip and warns of multi‑million federal cuts in 2026–27
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Summary
County CFO Joe Matthews told the Operations & Budget Committee the county has about 300 fewer FTEs on payroll than last year, saving roughly $7 million for Jan–Feb, while SNAP and Medicaid policy changes and federal grant cancellations threaten tens of millions more in revenue in coming years.
Joe Matthews, Hennepin County’s chief financial officer, told the Operations & Budget Committee on March 24 that the county’s 2026 budget tracks 9,762 positions, while the county had about 9,280 actual full‑time equivalent employees at the end of February — roughly 300 fewer than a year earlier. ‘‘That is significant for us,’’ Matthews said, adding that hiring holds and attrition produced about $7 million in lower spending for January and February compared with the prior year.
Matthews warned of several federal funding risks the county is monitoring. He said SNAP food‑security payment changes are reducing county human‑services revenue by about $8,000,000 in 2026 and that a future ‘‘error‑rate’’ adjustment could remove an additional roughly $20,000,000 from county revenues in 2027. He also said a proposed December HUD change would have cut about $12,000,000 in housing support for communities in Hennepin County, though he said the federal administration at the time backed away from that specific proposal.
On Medicaid, Matthews reported a long‑term exposure for the region’s hospital system: an estimated cumulative impact on Hennepin Healthcare System of about $1.7 billion from 2027 through 2038, including roughly $1.1 billion from phased‑out directed payments and about $600 million from disenrollment effects. ‘‘There’s a proposal on the agenda later today to talk about some ways to try and counteract that,’’ he said.
Administrator Wendland outlined county budget‑management steps: continued hiring controls, pausing or reprioritizing non‑mandated contracts, and deferring lower‑priority capital work into 2027–2028 when feasible. Wendland said grants management, budget and county‑attorney teams will continue tracking federal developments and will return to the board with a June update.
Several commissioners pressed for greater detail and clearer presentation of impacts. Commissioner Edelson asked for a timeline for Medicaid projections; Matthews said staff expect to have more confident numbers by June. Commissioners also raised workforce and administrative burdens tied to SNAP and other changes and discussed potential county and intergovernmental responses.
What’s next: county staff will continue monitoring federal appropriations and program rulemaking, return with updated Medicaid impact estimates in June, and maintain hiring and contract controls as an early mitigation strategy.
