States Face Massive New Costs under Trump Budget Cuts

The Washington Post

13:27 JST, September 9, 2025

States are scrambling to prepare for an unprecedented shift of costs and responsibilities under President Donald Trump’s sweeping tax and spending plan, which will force them to make difficult decisions about cuts to state programs to offset the new financial burdens.

Unlike the federal government, states must balance their budgets each year. That means deep cuts and changes to Medicaid and the Supplemental Nutrition Assistance Program (SNAP) will require state legislatures and governors to cope with hundreds of millions of dollars in new costs each year.

Some states are implementing cuts in anticipation of the added costs and responsibilities they will have to take on. Critics of the Trump legislation warn that projects – road and benefits programs, among others – are almost certain to be scaled back in coming years.

“There’s not a single state that has the resources to make up for this. You cannot backfill it,” Maryland Gov. Wes Moore (D) said in an interview. “The federal government is now literally saying to the states, ‘You are now on your own.’”

Trump’s One Big Beautiful Bill, as it is officially called, extends tax cuts from his first term that were set to expire and adds hundreds of billions of dollars in funding for immigration enforcement and national defense. To pay for those changes, the bill cuts Medicaid funding by nearly $1 trillion and the SNAP food stamp program by $186 billion over 10 years, largely by imposing work requirements in both programs that states will have to administer.

The changes mean that about 10 million fewer people are expected to have health insurance over the next decade and 2.4 million fewer people are expected to participate in SNAP during an average month, according to the nonpartisan Congressional Budget Office.

The bill also sharply limits the provider tax, which states collect from hospitals and other providers to boost Medicaid payments and receive federal matching funds. The change, along with others in the bill, will cause an additional $366 billion in cuts to federal Medicaid spending, according to the CBO.

All of these changes come amid one of the worst budget cycles for states in several years, said Matt Salo, CEO of Salo Health Strategies and former director of the National Association of Medicaid Directors. Salo said that he has spoken with both Republican and Democratic state officials about how to begin preparing for the changes and that all are concerned with how to stem expected benefit losses and launch complicated new systems on a compressed timeline.

The only way to cover expected losses, experts said, would be for states to impose higher taxes – a decision they are unlikely to make because of the political costs. Some states, in fact, are trying to cut taxes.

“It’s all coming in the context of a budget cycle right now that is the worst we’ve seen in a couple years,” Salo said. “There are a whole lot of things completely outside the control of state governments – tariff policy and supply chains in general and everything else that’s going on. All of those things are going to be putting a lot of pressure on state budgets.”

The last time states faced such a massive undertaking, Salo and other experts said, was the implementation of the Affordable Care Act, which is being greatly scaled back under Trump’s legislation. All states had to rebuild their eligibility systems, and many created marketplaces or relied on the federal government’s healthcare.gov website.

The Washington Post conducted a survey of all 50 states and the District of Columbia about how much they expected to incur in additional costs from the Republican bill, how many residents are expected to lose health care and access to food stamps, and what services might be cut as a result. Only 15 states and D.C. replied, with responses that varied largely along partisan lines.

Three GOP-led states – Arkansas, Ohio and North Dakota – said they did not anticipate cuts to other programs as a result of Medicaid and SNAP changes and did not provide estimates for how many people could lose benefits. Arkansas and Ohio also said they were seeking to implement work requirements even before the bill passed Congress in July.

Arkansas Gov. Sarah Huckabee Sanders, a former Trump White House press secretary, called the Trump spending bill “an enormous win for our state.” In a statement to The Post, she also praised what she called “the largest investment in border security in history.” Arkansas has submitted a waiver request to the Department of Health and Human Services to implement work requirements beginning Jan. 1.

Democratic-run states say the effects of the federal cutbacks will be severe, and several Democratic governors have said there is no way for states to backfill the scale of the cuts.

In their responses, most states said they plan to update or build upon existing systems but are determining whether they will need additional staff, training and other resources to handle the changes – including twice-a-year eligibility determinations for Medicaid recipients, up from once a year.

Delaware estimated that Medicaid work requirements would cost anywhere between $2.5 million and $17.5 million, with many unanswered questions about what will be needed. Maryland said it will use existing IT systems but will probably need to postpone previously planned work to accommodate the changes.

Pennsylvania officials said determining eligibility every six months instead of once a year will require its health department to increase staffing by 500 at an estimated cost of $37 million per year. They said work-reporting requirements would call for a staff increase of 250, costing up to an estimated $18 million per year.

Even though the work requirements in Medicaid and SNAP have yet to take effect, some states are already beginning to make cuts. In Massachusetts, Gov. Maura Healey (D) signed a fiscal 2026 state budget that was $1 billion less than what she proposed in January because of uncertainty around federal funding, according to the governor’s office. Healey also vetoed $130 million worth of projects and programs in the 2026 budget and implemented other changes amounting to more than $100 million in additional savings.

Moore said Maryland has cut its budget by the largest amount in 16 years. The state also has been hit hard by widespread layoffs across the federal government, which has destabilized the housing market in numerous cities.

“And now the federal government continues to lay off federal workers in historic numbers, slash rural health care, slash food assistance and then say to our states: ‘Now you all have to be the ones to pick up the pieces,’” Moore said.

New Jersey Gov. Phil Murphy (D) said in an interview that he had signed an executive order asking all elements of state government to do “an absolute deep dive to the penny” on the timing, implications and potential steps of the Medicaid and SNAP cuts. “Sadly, we’ll be able to do things at the edges, but it will be probably [just] at the edges,” Murphy said.

The vast majority of Republican governors, on the other hand, publicly supported the bill as it worked its way through Congress.

“As Republican governors, we stand UNITED in strong support of your One Big Beautiful Bill. This landmark piece of legislation embodies your powerful vision to bring about the next great American revival,” a group of 20 governors wrote in a letter to Trump in May, days before the bill passed the House. “We agree with you; Republicans must UNIFY around this unprecedented piece of conservative legislation.”

Oklahoma Gov. Kevin Stitt, a Republican who chairs the National Governors Association, said that because the cuts and changes to Medicaid and SNAP will roll out over the next couple of years, states will have time to prepare and adjust. He has also said that his state’s office of faith-based initiatives has been inundated with offers of help from churches and nonprofit groups.

Both Republican and Democratic governors have welcomed a $50 billion rural health fund included in the legislation that is aimed at preventing facilities from closing. But critics say the fund, which is to be distributed over five years, is a minuscule amount compared with the scale of the cuts.

Vermont Gov. Phil Scott, a Republican who did not sign on to the GOP letter supporting the bill, said his state is still trying to grapple with the full impact.

“We know there’s some good, some things that may be challenging for us. But I’m trying to keep an open mind,” Scott said, adding that the rural health fund will be “essential” for states like his.

Several governors said there are myriad questions about how implementation of Medicaid work requirements – a massive undertaking for the states – is going to work, especially as they are awaiting guidance from the federal government.

North Carolina Gov. Josh Stein (D) said his state has been seeking answers about whether the administration is going to provide comprehensive guidance for implementing work requirements and whether there will be any financial help. The law requires the federal government to provide operating regulations at least six months before the work requirements are set to go into effect at the beginning of 2027.

“That’s just like this tsunami that we see out in the ocean,” Stein said. “And we’ve got big waves that we are trying to deal with today to make sure Medicaid still operates.”