DHS making major budget cuts

The Minnesota Department of Human Services (DHS) is preparing to lay off staff and slash millions of dollars in spending […]

Jodi Harpstead portrait

The Minnesota Department of Human Services (DHS) is preparing to lay off staff and slash millions of dollars in spending on state-run programs that serve populations including elders and people with disabilities. State employees got word of the cuts earlier this fall. 

Operations of some group homes for people with disabilities will shift to private operators. Dozens of positions will go unfilled at the state’s main psychiatric hospital in St. Peter. The Minnesota Sex Offender Program, which houses about 740 sex offenders at state-operated treatment centers, will lay off 15 workers. A satellite program for treating sex offenders at the state prison in Moose Lake will end. 

The group home shift accelerates a program that is already underway. DHS operates 120 group homes across the state that provide services for people with developmental disabilities such as autism. The system has run at a deficit, in part due to inadequate reimbursement rates. The program has also met scrutiny because it is seen as duplicated by the private sector operators who run more than 4,000 group homes around the state. 

In 2017, a state law change required state-run group homes to focus on serving people with complex behavioral needs that cannot be met by private, community-based providers. DHS now estimates that about 113 residents who currently live in state-run group homes do not require that higher level of care and could be served by private providers. 

Currently, 17 DHS-operated homes are transitioning to private care providers. Another 10 to 15 homes also will begin the transition. The transitions will continue over the next 12 to 18 months. 

The cost-saving measures are part of a broader effort by Minnesota’s largest state agency to close a budget gap resulting from growing employee costs, while preserving the social safety net for impoverished families and others hard hit by the COVID-19 pandemic. Gov. Tim Walz’s administration has projected a staggering $4.7 billion shortfall for 2022 and 2023 because of the pandemic. 

DHS cuts are focused on a large division within the agency known as Direct Care and Treatment, which is projected to spend $533 million in the current fiscal year. It provides care to about 12,000 people with mental illnesses, developmental disabilities and substance-use disorders, as well as for hundreds of sex offenders who are civilly committed for treatment. Walz has unsuccessfully sought funding for the division during two special legislative sessions. 

As a whole, the division faces a $27 million shortfall for the rest of the current budget cycle, and a projected $96 million gap for 2022 and 2023. The proposed cuts would reduce those deficits to $7.1 million and $70.7 million, respectively. 

“While these adjustments help in the short term, the decisions will only get harder going forward,” said Human Services Commissioner Jodi Harpstead in the memo to DHS employees. “We will consider every idea while staying focused on our goals of mitigating closures of vital services, avoiding layoffs and balancing our budget.” 

Source: Minneapolis Star Tribune

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