Ramstad: Why these four officials are the most important people in Minnesota government now

Two years ago, the state of Minnesota’s Office of Management and Budget established a small team helping other state agencies, counties and local governments identify and secure federal funds for projects.

This fall, the four people on the Federal Funds Implementation Team, or FFIT, have become the most important in any government office in the state, it seems to me and apparently a lot of others.

That’s because the FFIT is tracking the effects on Minnesota from the One Big Beautiful Bill (OBBB) and other actions this year in which President Donald Trump and congressional Republicans have made big cuts in federal money to state and local governments.

The group is helping government officials, colleges and universities, hospitals, charities and even businesses around the state understand when and how the cuts will come.

All four members of the team — director Leah Corey, Kerry York-Myles, Avery Prine and Sam Rockwell — gave a presentation at the recent fall conference held by the Minnesota Council of Nonprofits, attended by leaders and workers from more than 2,000 organizations statewide.

They said that about one-third of the state’s annual spending involves the transfer of federal dollars to Minnesotans, chiefly in Medicaid (known as Medical Assistance here) and food programs. About 1/20th of the spending, more than $1 billion annually, is in a broad “other” category that ropes together more than 700 distinct grants to Minnesotans and communities.

This is important because part of the role that dozens or maybe hundreds of the state’s nonprofits play is as a conduit for that aid. The FFIT drew a rapt audience on a late Friday afternoon.

Whatever you think of Trump and congressional Republicans’ decisions in the OBBB, executive orders and even the government shutdown over health care premiums, those actions are having a disruptive effect on governments at every level. It’s like setting a forest on fire to burn out the underbrush and see what survives.

Some of their actions are designed to harm Democrats or Democratic-leaning states or other jurisdictions. Others fit no discernible pattern.

Even the efforts by the FFIT and the state’s Department of Revenue, which is assessing tax-rule changes, don’t yet yield a complete picture of the effects.

For instance, the state Revenue Department late last month estimated that Minnesota would lose about $550 million in tax revenue in the current fiscal year (which started July 1) if it conforms with the tax code changes Congress and Trump made this summer — and takes no other steps to change state tax policy. The Legislature, of course, is likely to take some action.

That amounts to 2% of expected tax revenue this year. It may not seem like much, but it will make the new outlook for state government finances, which the Office of Management and Budget will announce next month, very interesting. I suspect federal actions alone will make the state appear to have tumbled into a deficit.

“Nonprofits are not just service providers,” Sato said. “We are hope wrapped in a tax-exempt status and a somewhat precarious business model.”

The FFIT typically gets a lot of its information on funding cuts from state agencies that work directly with federal ones. The team rounds up the data for a conference call every other week that’s open to local units of government, tribal nations, nonprofits and businesses. They can’t answer individual requests for information, though, because they’d never get their jobs done if they did.

In April, the FFIT constructed an online dashboard to keep track of changes in federal law and appropriations. They update it every Tuesday and Friday.

As of last week, it showed nearly $1 billion in cuts to grants and projects in Minnesota. About $260 million of that amount is being challenged in court. The largest of those cuts happened earlier this month when $464 million was chopped from a construction project for high-voltage transmission lines.

For reference, that totals up to about 3% of the approximately $33 billion in expected state spending this fiscal year. However, some of the canceled spending would have been spread over several years.

And they noted Trump in August signed an executive order requiring federal agencies to include in grant contracts a clause stating they can be “terminated for convenience” at any time.

When FFIT’s York-Myles called for final questions, a woman in the audience raised her hand and said, “I don’t have a question. I just want to thank you for everything you’re doing.”