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Hennepin County warns of steep federal funding losses, staffing declines in 2026 update
Summary
County CFO Joe Matthews told the board the county has fewer budgeted positions and is facing major federal funding risks — including SNAP administrative losses and large federal funds under protective order — that could pressure services and the 2027 budget process.
Joe Matthews, Hennepin County chief financial officer, told the Administration & Budget Committee on July 28 that the county is operating with substantially fewer staff and faces mounting federal funding headwinds.
“We have 311.5 fewer FTEs compared to the same point in time last year,” Matthews said, noting a deeper reduction of about 572.1 FTEs when measured by hours paid and explaining that roughly 145 FTEs on the new paid family‑leave benefit do not show in the regular payroll count. He said the county began 2026 by underspending its budget to manage uncertainty and has continued to track month‑to‑month variances in spending.
Matthews outlined three major federal concerns: a roughly $8,000,000 annual loss in SNAP administrative revenue already phasing in; an estimated $107,700,000 of federal funding currently subject to protective orders (including grant funds affected by litigation); and estimated Medicaid losses affecting county clinics (he cited a working figure near $27,000,000). He also cited a multi‑year estimate of HR1 impacts on the broader hospital system, saying the county is using the best available estimates while acknowledging significant implementation uncertainty.
Commissioners pushed back on the source of the cuts and possible remedies. Commissioner Connolly said federal actions appear politically targeted and urged participation in lawsuits; he called the situation “petty and gross.” Commissioner Fernando emphasized Hennepin’s outsized role in the state’s social safety net and said the county cannot simply “shrink our way” into maintaining services without new dedicated revenue. Multiple commissioners thanked staff for transparency and asked that administrators continue frequent briefings as the county plans for the 2027 budget.
Next steps: administrators said staff will provide additional budget briefings (Aug. 20; Aug. 25) and Administrator Wendland is scheduled to present a proposed 2027 budget on Sept. 22, with the board set to consider the maximum levy on Sept. 29.
