Director of State Fiscal Research
President Trump’s budget would shift massive new costs to states by cutting federal funding for health care, food assistance, and many other areas. States can’t afford to assume these costs without raising taxes significantly so, instead, they’d very likely cut many key investments and public services.
Specifically, the Trump budget slashes:
Since Medicaid is jointly funded by the federal government and states, states would have to raise their own revenue to offset the lost federal funds or, more likely, curtail Medicaid eligibility and health care services to low-income seniors, children, parents, adults, and people with disabilities. (Here are state-specific estimates of the cost shift under the House Republican health bill.) The budget would also impose hundreds of billions in additional Medicaid cuts over ten years, shifting even more costs to states.
The budget would also cut other programs that help states fund supports and services for families struggling. It would cut Temporary Assistance for Needy Families (TANF), which helps poor families with children by providing cash assistance, job-seeking assistance, child care, and services to prevent the need for foster care, among other things. States would have to pick up the tab or cut these critical supports to families. The budget also eliminates the Social Services Block Grant, which gives states flexible funding for services such as adult day programs that help seniors live more independently and child care assistance.
States are in no position to assume the massive additional costs that the Trump budget would impose. Many are still recovering from the Great Recession. State funding for higher education per student, for example, is still down 18 percent from before the recession and, in a number of states, K-12 funding per student also is still far below pre-recession levels. Meanwhile, state revenues are currently lower than expected in many states, leaving sizeable gaps in their ability to fund existing services — let alone the billions in additional costs they’d face under the Trump budget.