Federal SNAP, Medicaid changes force Minnesota counties to raise property taxes
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Property taxes are going up next year all across Minnesota. The Minnesota Department of Revenue projects county boards will be raising property tax levies by more than 8 percent on average.
The Blue Earth County Board is among them and is scheduled to vote next week on a proposed tax levy increase of 8.5 percent.
“I'm in my 38th year (in county government). We haven't seen these kinds of increases in levies across the state, in a very long time,” said Blue Earth County Administrator Bob Meyer.
Even after implementing a hiring freeze, postponing some capital spending and pulling money out of reserves, Meyer says the county is still projecting a $6 million budget shortfall.
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“I do believe that services are going to be impacted,” Meyer said. “Because, really, to balance all of that is going to be a challenge, and something's got to give.”
All 87 counties in Minnesota are raising property taxes, according to the state Department of Revenue, some by double-digits.
One of the reasons local taxes are rising across the state is because of changes to SNAP, the federal food assistance program, and Medicaid, that were included in President Donald Trump’s “One Big Beautiful Bill,” which Congress passed in July.
The massive federal tax and spending bill slashes reimbursements to counties to administer those programs. Matt Hilgart of the Association of Minnesota Counties says the law also significantly increases the workload on the counties to verify eligibility for certain safety net programs.
“These are mandated federal programs. We administer them on behalf of the State of Minnesota,” Hilgart said. “We just have to do so now with half of the federal reimbursement. That has to translate to just a levy increase. We can't not fill those positions or do that job.”
Hilgart adds that many counties are also struggling with outdated technology to process their increasing workloads. He says it’s like telling “a captain to navigate through a storm without a rudder.”
“They are green screen technologies, they are DOS-based systems that have not been updated since the 1980s,” Hilgart said. “So the sheer time it takes to put in addresses, duplicative information, get around work arounds or errors is very time-consuming.”
“We're going to have to double the efforts in terms of work verification,” Hilgart added. “That's a policy change, certainly, but it also means that we just need more people then to do that job.”
Hilgart is calling on the state to help counties upgrade their IT systems and streamline the workflow. He also wants lawmakers to boost funding to counties to soften the impact of federal budget cuts on property taxpayers, especially in counties with higher poverty rates.
“It goes without saying that in communities with high poverty or lower area median income or cash strapped households, we're turning to a tax base that has severe limitations,” Hilgart said.
‘Dire’ and ‘not sustainable’
The Minnesota Department of Human Services acknowledged the strain counties are experiencing in an emailed statement provided to MPR News.
“We know county workers already feel overwhelmed with the volume of work required of their jobs and by system constraints,” the statement reads. “The department has prioritized easing their workload as a key focus in implementing HR 1.”
The agency stated that as states wait for federal guidance, DHS is in the process of finalizing plans to implement federal Medicaid changes signed into law in July, and that it’s focused on “maintaining coverage for eligible Minnesotans, complying to state and federal requirements and reducing the burden on the workforce.”
“DHS will continue to engage with county and Tribal partners on this implementation in the coming weeks,” the statement reads.
State legislators are also in talks with county leaders from across the state on how to address workflow issues and the financial pressures resulting from the federal tax and spending law.
“This is really dire and it's not sustainable,” said State Senator Erin Maye Quade (DFL-Apple Valley). She recently met with some county officials about the increasing strain on counties caused by the federal program changes and budget cuts, which she fears will result in Minnesotans paying a lot more in property taxes for reduced government services.
“When Minnesotans are looking at their property tax bill, and they are seeing increased property taxes, unlike pretty much any other tax that we pay, this property tax increase is not to help more people,” Maye Quade said. “It is to have fewer services to fewer people.”
Maye Quade adds that there needs to be a larger conversation about how best to administer government services and programs.
“I think there's a lot of appetite from counties across the state, from the Association, from legislators, to have a conversation about, can we do this differently in a way that still gets services and benefits to people, but, also maybe makes more sense in the modern era,” said Sen. Maye Quade.
Matt Hilgart of the Association of Minnesota Counties says the state should also take a hard look at how to pay for essential government services, because he says shifting the burden of federal programs such as SNAP, Medicaid and others on to property taxpayers just isn’t sustainable.
“The expectation that counties will deliver the social net safety services on behalf of Minnesota and the federal government,” Hilgart said. “With these limitations and an unsustainable dependence on the property tax systems, it seems like we're near a breaking point.”
