98 Minnesota mayors warn state fiscal policies are hurting cities, residents and local budgets psss
98 Minnesota mayors warn state fiscal policies are hurting cities, residents and local budgets
A letter to state lawmakers cites fraud, unchecked spending and forcing property tax increases on residents and businesses
A group of 98 Minnesota mayors raised concerns with state leaders in a letter about their state's fiscal policies, saying they have impacted their cities and residents, noting a disappearing $18 billion surplus and a projected $2.9 billion to $3 billion deficit for the 2028-29 biennium.
In a letter to state lawmakers and Gov. Tim Walz, the 98 mayors expressed concern and frustration, said the state was slipping in national economic rankings.
"Fraud, unchecked spending, and inconsistent fiscal management in St. Paul have trickled down to our cities—reducing our capacity to plan responsibly, maintain infrastructure, hire and retain employees, and sustain core services without overburdening local taxpayers," the letter states.
Cities across the state now face workforce shortages, slowed business investment, rising operational and construction costs, and families choosing to leave Minnesota altogether, the letter states.
In addition, the mayors noted potential property tax increases as a result of unfunded state mandates and costs that force cities to shift the burden to residents and businesses.
"There is a growing disconnect between state-level fiscal decisions and the strain they place on the cities we lead, the letter said. "When the state expands programs or shifts responsibilities without stable funding, it is our residents—families, seniors, businesses, and workers—who ultimately bear the cost."
Unfunded mandates include requests for schools, health and human services, and public safety.
Minnesota Republican lawmakers put the blame on Walz and Democrats.
MINNESOTA’S ANTI-FRAUD SPENDING HAS QUIETLY BALLOONED, LEAVING TAXPAYERS TO PAY FOR FAILURE TWICE
Minnesota Gov. Tim Walz speaking at a presser. (Tibrina Hobson/Getty Images)
"Governor Walz and Democrats passed unaffordable spending and tax increases along with unfunded mandates on the promise it would make life more affordable," state Republican Sen. Andrew Lang, who serves as the Lead on the Senate State and Local Government Committee, said in a statement. "In reality they just passed down the costs to local governments, schools, and small businesses, who in turn pass down costs to local taxpayers and consumers.
"Minnesota Counties sounded the alarm early last session about the proposals to shift costs onto their budgets, so I’m not surprised that nearly 100 mayors across the state are raising their own concerns. This letter is a warning that we must reduce state spending, stop the massive fraud plaguing our state, and remove unnecessary mandates to keep life affordable for everyone."
Fox News Digital has reached out to Walz's office.
The mayors noted that a state statute requires a balanced budget but that relying on one-time surplus dollars has created structural strain.
"Our state owes it to our citizens to practice responsible fiscal management and to stop taxing our families, seniors, and businesses out of Minnesota," they said. "We urge the Legislature to course-correct and to remember that every dollar you manage belongs not to the Capitol, but to the people of Minnesota."
Gov. Walz questions $9B Medicaid fraud estimate, says he’ll take accountability
Gov. Tim Walz said he would take accountability for fraud in Minnesota’s Medicaid programs and would work to fix it, but took issue with estimates gauging the total lost to improper payments at around $9 billion.
The comments came on Friday, a day after federal prosecutors announced a slate of additional charges tied to alleged widespread fraud in Minnesota’s Medicaid programs and suggested that at least half of the $18 billion spent in Minnesota since 2018 in 14 Medicaid programs viewed as high risk for abuse had been obtained by fraudulent means.
“It's speculating,” Walz said following a news conference on an unrelated issue, noting that payments had been cut off for programs and providers suspected of misusing Medicaid funds. “To extrapolate what that number is for sensationalism or to make statements about it, it doesn't really help us. It doesn't get us to where we need. I just need their help to prosecute this.”
Department of Human Services Deputy Commissioner and state Medicaid Director John Connolly said state officials think the amount of Medicaid money obtained through fraud is in the tens of millions of dollars, not billions. He and Department of Human Services Inspector General James Clark said the U.S. Attorney’s Office had not submitted information to the state about potentially fraudulent providers.
“We don't have evidence in hand to suggest that we have $9 billion in fraud in these benefits over the last seven years. And if there is evidence, we need it so that we can stop payment,” Connolly said. “That's a very alarming number. And so if there is evidence, credible allegations of fraud, we need that information to take action.”
Walz, a second-term DFLer, said the state referred cases of suspected fraud to the U.S. Attorney’s office to be prosecuted, and providers were charged as a result.
“What they didn't tell you is we're partners in this,” Walz said. “They didn't tell you because they don't tell us. And it's been very clear that this is being driven from (Washington) D.C.”
Walz said politics, particularly from the White House, had filtered down to discussions about Medicaid fraud in Minnesota. The issue has drawn scrutiny from President Donald Trump and attracted investigations from various federal agencies in recent weeks.
Walz committed to rooting out fraud in government programs and holding people to account.
“This is on my watch. I am accountable for this, and more importantly, I am the one that will fix it,” Walz said. “They're not interested in that, so they throw about these numbers.”
Republicans have blasted the governor for not acting sooner to detect and weed out fraud in the programs. Gubernatorial candidate Chris Madel told WCCO Radio that Walz was “willfully blind” to the issue over the course of his seven years in office.
“How can you possibly claim, with respect to the governor, and frankly, every every one of these commissioners, every one of the high level people there, that they are not aware of a high probability of fraud going on when this has not only happened for the last 10 years, but they themselves are now saying that there's 14 different areas of fraud that are occurring, and then there's indictment after indictment after indictment?”
Madel also faulted Republicans in the Legislature for not doing more to provide oversight over Medicaid programs and said a new House Fraud Prevention and Agency Oversight Committee formed this year hadn’t produced meaningful results.
On social media, U.S. Rep. Tom Emmer said, “Timmy, you are not a victim. 9 BILLION dollars of fraud happened on your watch. Take accountability for once in your life!”
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“This investigation has been underway for more than four years and is being handled by career prosecutors and law enforcement agents here in Minnesota,” said First Assistant U.S. Attorney Joseph H. Thompson in a statement to MPR News Friday afternoon. “We will continue to follow the evidence wherever it leads and will remain transparent with the public about the magnitude of the problem. We welcome and appreciate the support of everyone committed to the fight against fraud.”
MPR Correspondent Matt Sepic contributed to this report from Minneapolis.
