Yesterday, Governor Tim Walz delivered his seventh State of the State Address. During one part of his speech, he notably emphasized Minnesota’s generous welfare system as a point of pride.
For everyone else, it’s really this simple: Right now, we’re the most generous state in the nation when it comes to these programs and services – and we should be proud of that.
This is largely true. Minnesota’s welfare system has historically been one of the most generous in the country. Whether that is a net positive, however, is up for debate.
Nevertheless, these high spending levels generally mean, as Walz also noted, that even after the “spending cuts” that he has proposed, Minnesota will remain among the most generous states in the country — if not the most generous.
After my budget is passed, we will still be the most generous state in the nation when it comes to these programs and services – and because of the efficiencies I’ve proposed, we’ll be able to continue being the most generous state in the nation for years to come.
There is a lot of room, therefore, for legislators to cut spending beyond what Walz and lawmakers have currently suggested. For context, consider Minnesota’s welfare spending ranks prior to the 2023 spending spree.
How Minnesota compare(d)
U.S Census Bureau tabulates state and local welfare spending data through the Annual Survey of State and Local Government Finances. Spending under public welfare includes money going toward various means-tested programs such as Medical Assistance (MA), cash assistance checks, childcare, and housing, among others.
For the most recent year for which data is available, 2022, Minnesota spent the equivalent of $40,280 on public welfare per person in poverty, ranking second highest among the 50 states. Minnesota spent about 70 percent more than the US average as well as the median state.
Figure 1: State and local spending on public welfare per person in poverty, 2022
For the entire period during which Census Bureau data on poverty and welfare spending is available, 2010-2022, Minnesota has consistently outspent the national average.
Figure 2: Spending on public welfare per person in poverty, 2010-2022 (2022 $)
Specific programs: Medicaid
The Medical Assistance (MA) program, or Medicaid, is Minnesota’s largest welfare program and received the bulk of new human services funding enacted in the 2023 session. Per the February 2025 forecast, MA is projected to drive most of the growth in Health and Human Services (HHS) — and, by extension, total general fund expenditures.
But as the data shows, Minnesota’s MA program was already among the country’s most generous before 2023. According to the Centers for Medicare and Medicaid Services (CMS), in 2022, Minnesota outspent the median state across each of Medicaid’s eligibility categories.
For people with disabilities, Minnesota spent $53,000 per person, ranking number one among the 50 states. The next highest-ranking state, New York, spent over $15,000 less than Minnesota. Similarly, for the aged, Minnesota spent $34,000 per enrollee, ranking second-highest.
Figure 4: Medicaid Spending per person with disabilities, Total Funds (2022)
There is room to cut
Assistance programs provide an important lifeline to vulnerable Minnesotans. However, the recent surge in spending on these programs poses an ongoing threat to budget stability and long-term economic growth.
Luckily, as the data shows, Minnesota was a generous state before 2023. There is a lot of room, therefore, to substantially pare back spending without jeopardizing service delivery.