This story is part of a series about how the 2025 Minnesota Legislative Session is affecting Jewish institutions and communal priorities. Stories will include views from Jewish lawmakers and coverage of how budget cuts might affect social services, elder care, and education.
Judy Halper, CEO of the Jewish Family and Children’s Service of Minneapolis, has spent many years advocating for social service funding at the Minnesota Legislature.
“I often feel very energized and optimistic after spending time [there],” she said.
But not this year.
Minnesota faces a $6 billion projected deficit, and lawmakers are negotiating over cuts to balance the state budget.
“Everybody was like, ‘Oh, we could spend all day, and you can talk to me about why this [program is necessary], and why that [program is necessary] — but the budget is going to be cut,’” Halper said. “It was pretty sobering.”
At the same time, President Donald Trump and a Republican-led Congress are intent on slashing the federal budget as the economy strains over Trump’s tariffs and widespread federal layoffs.
All of this creates a perfect storm for agencies like JFCS and the Jewish Family Service of St. Paul.
They rely on a framework of state and federal funding to do everything from supporting elderly Jews who immigrated from the Soviet Union, to providing employment, disability, and mental health services to Minnesotans.
Budget cuts will mean cutting services and staff, and helping fewer people — at a time when those services may be needed most.
“Anytime there is an economic recession or some kind of crisis, what we see is this inversion: need goes up and resources go down,” Halper said.
Anecdotally, JFCS is already seeing an increase in hunger and people needing help from social service agencies.
But planning for the future is no sure thing. The Minnesota Legislature has until May 19 to reconcile, finalize, and pass budget bills. If they don’t succeed, lawmakers will likely reconvene for a special session in June.
And at the federal level, uncertainty reigns with hand-wringing over drastic budget proposals.
“You’re sort of living in two time zones, right: the day to day, and then the future time zone — and the future time zone, there is so much data missing right now,” said Ruth Hampton Olkon, CEO of JFS.
“This is taking away resources of time and energy,” she said. “What are the opportunity costs for those of us leading social service organizations, because we are constantly monitoring and responding to threats?”
Programs & funding
Some social service programs are paid for directly by state or federal funding.
For example, ParentChild+, a JFCS program that helps low-income families with early childhood education, gets state funding. Originally in the Metro area and Cass County, the program expanded over the past few years to St. Cloud, Rice County, and Rochester.
Minnesota budget cuts leave JFCS anticipating only enough funding, about $1.8 million, for the Metro and Cass County programs.
In past years, without looming budget deficits, Halper might have pushed lawmakers for more funding.
“You could go back up there and you could advocate to get it back,” she said. “I don’t know that that would be worth our time this year. I doubt it very much.”
Many other programs, though, are funded through Medicaid, the federal insurance program for people with low income.
This is where things get complicated.
Federal funding for Medicaid is given to states, who decide how to manage their programs. Minnesota’s version of Medicaid, called Medical Assistance, costs around $18.5 billion a year — with around $11 billion of that coming from the federal government.
Like many government programs, Medicaid is a reimbursement system. Providers spend money to serve people on Medicaid, and are paid back based on state and federally-determined rates.
The rates don’t cover all the cost of care and change with the type of program. Reimbursements are also time-delayed — how much the state pays back an organization could be based on costs from over a year or two years ago.
This means that Medicaid cuts — like the roughly $300 million in state cuts proposed by Gov. Tim Walz, or the $880 billion in potential federal cuts — can be catastrophic for people in need, and mean a long-term reduction in services and staff from agencies.
“If any of this comes to pass, that will have a profound impact on the entire ecosystem,” Hampton Olkon said.
As an example, JFS provides case management to about 700 people with disabilities, low income, or elderly needs so “they can maintain independence and community,” Hampton Olkon said. “That is all funded from Medicaid, almost completely.”
Around 25% of Minnesotans are on Medicaid, though because of local program names, they might not even know they rely on the federal government.
There’s also widespread uncertainty about what, exactly, cuts will mean in practice.
“These systems are so complex. When we talk about cuts to Medical Assistance, that’s a giant universe,” Hampton Olkon said.
“Does it mean that people who are currently getting their health care will have higher co-pays, so they won’t come to get their mental health services at JFS because the co-pays are too high? There’s so many scenarios.”
A view from the county level
Heather Edelson, a Hennepin County commissioner who represents the western suburbs (and is a member of the Jewish community), is also keeping an eye on the coming state and federal cuts.
“I’m really worried about people’s day-to-day lives, and how we’re going to figure this out, because we just don’t know about the funding,” she said.
Counties are an essential part of the social service pipeline. Federal money, allocated to the state, is then re-allocated to the county, which in turn grants money to social service organizations for particular programs.
Cuts leave the counties struggling to cover funding holes. With Medicaid as a large part of that framework, there’s no easy way to manage savings or track funding.
“The complexity of it is, there are multitudes of programs,” Edelson said.
“It’ll be like whack-a-mole to solve problems…it’s a little nerve-wracking when we are looking at what’s happening on the federal level as well as the state level,” she said.
There’s no good way to make up for lost funding. Property taxes are the main source of revenue for counties, and they’ve already been rising. Raising taxes also won’t compensate for the scale of the cuts likely to come, Edelson said.
JFCS and JFS are both tied into county-level funding and may see their work affected.
Hennepin County administers the Minnesota Family Investment Program (MFIP), which is reliant on federal funding.
MFIP gives cash assistance to families in need, while also setting up adults for employment help and other support. The county doesn’t operate MFIP alone, though — it uses the federal funding to contract with local nonprofits, like JFCS.
JFCS had been managing 4% of the Hennepin MFIP program, and was asked to take on 11% for this year. But as they ramp up staffing, federal cuts could drastically reduce the program.
“If that program is cut financially by the federal government, or impacted in some way, I’m quite certain that the first thing that the county will do is say to their sub-grantees, ‘We can’t pay you,’” Halper said.
That would mean JFCS has to turn around and lay off employees. But for now, there’s only uncertainty.
“Nothing has happened as yet, and we continue to [hire] up, frankly, which we have to do, because the county keeps sending us people, and our staff are really stressed out and overloaded,” Halper said.
Preparing for hard times
As a state that has historically invested in social service funding, there’s a lot more to lose with cuts in Minnesota.
“If funds contract, we absolutely will have…[fewer] nonprofits to help us get out services, which means it will be harder for people to get services — if they can get them at all,” Edelson said.
Getting through the next few years will involve getting “creative,” she said. “People need us.”
For Hampton Olkon, the way forward is about community support. JFS and JFCS already rely on fundraising to support their work, and philanthropy will likely become more important in the coming years, even as it, too, is squeezed.
Hampton Olkon saw that play out firsthand at the JFS annual event and fundraiser on April 6, shortly after President Trump announced a severe tariff policy that shocked businesses and the stock market.
“I’ve got this room of 200 donors, and I would say two-thirds of them were in a space, maybe more, of watching their retirement funds go in the wrong direction,” she said. “We still met our goals, and people still stood up for us.”
That might not always be the case. Hardship can make people and donors retreat to focus on their own needs.
“What we all need is for all of us to lean in and be expansive, so that we can get through this and take care of each other,” Hampton Olkon said. “That’s not a natural thing to do when you are afraid.”
Still, it’s important to have hope.
“You have to just stay focused, and you have to try to stay optimistic,” Halper said. “JFCS has weathered every single storm that’s come our way, and I believe that we will weather this one, too.”
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