MDHS seeks $54.9M in general funds; warns HR1 SNAP changes could cost state up to $120M if error rate remains high

Bob Anderson, director of the Mississippi Department of Human Services (MDHS), told the appropriations subcommittee the agency is seeking a $54.9 million general‑fund increase for FY27, bringing the proposed state share to about $147.9 million. Anderson said MDHS is predominantly federally funded—about 91%—but that recent policy and operational needs drove the request.

Anderson said much of the increase is for salaries and retention: MDHS seeks funding to implement approved career ladders for economic‑assistance and youth‑services staff, authority to pay overtime contemporaneously for Oakley staff, and market‑adjusted salary adjustments. "We are asking for the first time to give us authority to pay overtime to Oakley employees," he said, arguing contemporaneous overtime pay aids retention.

The director reported an immediate operational problem at Oakley: "We have a 100,000‑gallon water tower on campus at Oakley which in the cold the supply line froze over and emptied the whole tower. We don't have any water out at Oakley." He said the campus requires both maintenance and possible demolition of older cottages (an MDHS estimate of about $4.6 million to remove roughly 15 cottages appears in the agency request) and that current Oakley operating costs are roughly $15 million a year.

MDHS also described service expansions and technology investments: a proposed $1.5 million data‑tracking system for Older Americans Act programs, a request to increase home‑delivered meals funding from about $1 million to $3 million, and planned system modernization (SUCCESS) with user‑acceptance testing in early 2027 and a projected May 2027 go‑live.

On federal policy, Anderson warned that the House measure referred to in testimony as HR1 would change SNAP cost sharing. The state administrative match for SNAP will rise to 75%, costing an estimated roughly $15 million in additional state administrative funding; separately, a new programmatic state cost share would be tied to Mississippi’s SNAP payment‑error rate. MDHS said the state’s most recent payment‑error rate was about 10.49%; under HR1’s banding, that error rate could put Mississippi in a 15% programmatic‑cost band, which MDHS estimated could translate to as much as $120 million in additional state costs in a worst‑case scenario. Anderson described pilots with verification vendors (Truve, Promise, Steady IQ) and plans to reduce error rates.

Committee members asked about dementia care (currently funded for ~50 participants, MDHS seeks to expand to ~70), child‑care payment waiting lists (about 18,000 on the agency’s lists) and the potential to take child‑care licensure staff from the Department of Health. Senators pressed MDHS on Oakley alternatives, capital needs and whether privatization or new construction might be more cost‑effective.

The subcommittee heard the MDHS presentation and did not take final action during the hearing; members asked for follow‑up details on the career‑ladder funding split between federal and state sources, and on vendor quotes for payment‑verification pilots.