The latest Minnesota budget forecast hints at progress in fighting fraud.
The state Dept. of Management and Budget (MMB) issued its latest (February) forecast for the state budget yesterday (Friday).
The big headline is the sudden turnaround: a state budget deficit forecast for Fiscal Years 2028-29 has flipped to a small budget surplus (p. 2).
Don’t get too excited, growth in spending is still forecast to outpace growth in tax revenue, to the tune of billions of dollars in “structural imbalance” (p. 22).
The slight overall improvement is due entirely to higher forecasted tax revenues (p. 14), as a result of greater expected economic growth (p. 7). (But you are not supposed to give Trump any credit.)
Future spending is also forecast to increase (p. 18) at rates higher than previously expected. There is, however, one notable exception: health and human services (HHS) spending, which is forecast to fall by $361 million over the next two budget cycles.
Although the vast majority of the billions of dollars stolen in fraud came from federal taxpayers, fraud reduction efforts will also benefit state taxpayers.
Digging into the full 109-page budget report, the word “fraud” appears on only two occasions, On report page 81, MMB mentions “fraud” in the context of withheld federal Medicaid dollars.
More significantly, on report page 84, the report discusses fraud in the context of an ongoing state review of 14 “at risk” Medicaid programs within the state Department of Human Services (DHS). As a result of these reviews, MMB’s forecast shows state budget savings of $238 million over the next two budget cycles. Savings will result from delayed payments, fewer and smaller reimbursement claims from providers, and denied claims.
We still have a long way to go.
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