Federal judge denies request to stop 7 percent cut to funding for Minnesota disability service providers

State organizations representing disability service providers and individuals with disabilities had filed suit against commissioner of Department of Human Services

On June 28, United States District Judge Wilhemina Wright denied a request to immediately stop cuts to funding for thousands of Minnesotans accessing crucial services that allow them to live, work and engage in their communities.

The ruling goes against four individuals representing a plaintiff class of people with disabilities in Minnesota, as well as Minnesota Organization for Habilitation and Rehabilitation (MOHR) and ARRM.

The plaintiffs filed suit just over two weeks ago to stop the Minnesota Department of Human Services (DHS) from implementing a 7 percent rolling cut to funding for critical services. The first round of cuts is set to go into effect on July 1. The plaintiffs argued DHS’s planned cut would violate the rights of waiver recipients and their providers because it is arbitrary, capricious and inconsistent with Minnesota statute, and that allowing the cut to go into effect would cause irreparable harm to the more than 32,000 people who rely on supportive services and the more than 300 provider organizations which supply the services.

“This was a complicated case, and ultimately we respect the ruling of the court,” said Julie Johnson, president-elect of MOHR. Legislators supported a fix, said Johnson, but by combining that fix with other unrelated items, it got caught up in a political battle. “The great tragedy here is that Minnesotans with disabilities and the hardworking staff who support them have been allowed to become collateral damage of partisan battles at the State Capitol.”

DHS justifies implementing the cut because the federal Centers for Medicare and Medicaid Services (CMS) had suggested that rate increases enacted by the Minnesota Legislature may have been incorrectly structured. While bipartisan legislation was drafted to clarify the amount and structure of waiver funding in response to CMS’s concerns, this language was included in the Legislature’s omnibus spending bill, which Governor Dayton vetoed during the politically-charged final days of the legislative session.

“Addressing this issue should have been a top priority for legislative leaders and the governor from the day it was announced,” said Sue Schettle, CEO of ARRM. “More than 8,500 people affected by the first round of cuts will see an immediate hit on Sunday (July 1) to the supportive services which provide choice and options to live as independently as possible in their communities.”

The cuts are set to affect funding for all recipients of home and community-based services—the technical term for the services which support independence and community integration for vulnerable adults. To cope with the upcoming funding cuts, members of ARRM and MOHR, and similar organizations across the state will be forced to reduce service offerings and make other hard decisions. The cuts will worsen the critical staffing shortages these organizations already face by making it even more difficult for service providers to compete with wages other employers can offer.

Direct support professionals, who provide hands-on care and support, are at the core of services provided to individuals with disabilities. In its most recent industry survey, ARRM reported a statewide average wage of less than $12.50 per hour for direct support professionals, greater than 40 percent turnover rates for first-year staff, and job vacancy rates of nearly 10 percent.

“Our members are competing for staff with other employers offering a $15 per hour starting wage for entry-level food and retail service jobs, while demands for the support services our members provide continue to go up and up,” said Johnson. “We need policymakers to step up to the plate and provide long-term stability to funding for providers to meet the current and projected needs for high-quality supportive services.”

ARRM (The Association of Residential Resources of Minnesota) is a nonprofit association of more than 200 Minnesota providers, businesses and advocates dedicated to leading the advancement of community-based services that support people living with disabilities in their pursuit of meaningful lives.  ARRM members support people with developmental, intellectual and physical disabilities including autism, brain injury and mental health needs. People served live in their own homes, adult foster care settings, and other community settings.  Founded in 1970, ARRM continues to lead positive industry reforms that support Minnesotans with disabilities. To learn more, visit, and follow us on Facebook and Twitter.

The Minnesota Organization for Habilitation and Rehabilitation (MOHR) is comprised of more than 100 adult day, day training and habilitation, extended employment, and supported employment service provider members serving in excess of 26,000 Minnesotans with disabilities.  Members are committed to respect for each individual, a person-centered approach and expanding work opportunities. More information is available at, on Facebook and on Twitter.



Drew Henry

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651-291-1086 ext. 4


Aaron Hustedde, for MOHR

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