Economy

Trump’s new law means major hits to state budgets

State fiscal analysts will be scrutinizing these two key provisions of the new law.
President Donald Trump holds up his signed signature bill of tax breaks and spending cuts at the White House in Washington, Friday, July 4, 2025.(AP Photo/Alex Brandon, Pool)

The sweeping budget reconciliation bill President Trump signed last week will make it more difficult for states to finance their Medicaid programs while also pushing them to spend more on food stamp benefits and administering social services programs.

State lawmakers must now find ways to manage the budget impact, at a time when state finances are already under pressure from slowing revenue collections and the rising cost of providing health care, education and other services. 

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