Largest Surplus in Minnesota’s History: What it means for long term care providers

Posted on December 8, 2022 by Kayla Khang

This week, Minnesota's budget forecast for the 2024-2025 biennium showed a $17.6 billion surplus, the largest in Minnesota's history. Most of the forecasted budget is "carryforward," meaning that about $12 billion of the surplus money will only be able to be spent on one-time investments.

What the forecast tells us about long-term care spending

As part of the annual budget and forecasting process, the Department of Human Services (DHS) also updates its projections of how much the state will be spending on its healthcare programs. The updated forecast for care center spending includes some notable contrasts with the previous forecast a year ago.

• The most recently completed state fiscal year ended June 30, 2022, and the impact of the workforce shortage and pandemic are clear. In 2022, the state paid for more than 755,000 fewer days than in 2020, a stunning 16% drop.
• DHS was not predicting that decrease in the previous forecast. As a result, the current biennium is now projected to cost the state $130 million less for care center services than they were projecting a year ago. That amount is a small part of the more than $11 billion state surplus for the current biennium.
• Looking out to the biennium that starts on July 1, 2023, the new DHS forecast includes a couple of offsetting changes compared to a year ago. They project that daily rates for care centers will be higher than what they projected last year but that the number of days will be lower than previously expected. Ultimately, this means that the projected budget for care center spending effectively remains the same.
• On Elderly Waiver, the state has been projecting in each annual forecast that the program will grow due to higher enrollment as the population ages. The new forecast does not alter that expected trajectory.

What happens next?

By the beginning of the next decade, 25% of Minnesotans will be 65+. With vacancies for caregiver positions at more than 20%, the caregiver crisis will continue to worsen unless the DFL House and Senate majorities and Gov. Walz adequately fund it in the 2023 state budget. Even though much of the state's historic $17 billion budget surplus is one-time funding, state leaders have ample resources to secure the safety net of care for older adults. Our state leaders must invest in care to ensure access for all seniors in all the communities they call home.

Minnesota seniors and their families are waiting for the care they need because there aren't enough caregivers. In October alone, Minnesota's seniors were denied access to older adult services 11,000 times. Over half of long-term care providers have waiting lists for care.

The staffing shortage in senior care is at a crisis level, affecting seniors and their families in every corner of the state. Only lawmakers can address the crisis to ensure access.

OUR MESSAGES TO LAWMAKERS:

The Long-Term Care Imperative issued a statement upon the release of the budget projections calling on lawmakers to prioritize seniors in the 2023 budget. In it, we assert that it is "the state's responsibility to prioritize seniors and their caregivers with significant investment in senior care in the 2023 legislative session. In the 2023 legislative session, we will seek approximately $1 billion to support caregiver wages, which is less than 6% of the budget surplus. An investment of this size is necessary to address the significance of our caregiver shortage in our state."

We also have a well-timed media buy on Minnesota Public Radio starting Thursday to increase awareness about long-term care issues and the importance of ensuring access to care for Minnesota's seniors. 

More details

Those interested in seeing the budget forecast details can watch the recording of Minnesota Management and Budget's presentation or review the slides.