Trump cuts exacerbate budget fights in red states
Source: Politico
03/25/2026 04:45 AM EDT
Republican-led states facing major budget shortfalls in 2026 are facing an awkward reality: President Donald Trump’s signature tax and spending bill is making their problems worse.
Federal tax cuts approved by Republicans as part of the megabill, coupled with new requirements for Medicaid and the Supplemental Nutrition Assistance Program, are costing some states as much as $450 million this year in added costs and lost tax revenue, further squeezing budgets that were already stretched thin. Legislatures are now considering cuts and reallocations, including a cut to child care subsidies in Missouri, a 5 percent reduction across state agencies in Arizona and a $22 million cut from disability services in Idaho.
“We’re stealing from Peter to pay Paul,” Idaho Republican state Rep. Jordan Redman said recently. Aligning Idaho’s state tax with Trump’s federal tax cuts is estimated to cost the state $155 million in 2026 and $175 million in 2027, according to the governor’s office. “It’s put us in a predicament where now we’re trying to figure out, ‘Ok, what programs do we keep? What programs do we cut?’”
Trump has already struggled to sell Americans on many provisions of his “big, beautiful bill,” from Medicaid and SNAP cuts to tax changes that provide the most benefit to the wealthiest 10 percent of Americans. Now Republicans, many of whom support the president’s tax policy, are now facing the prospect of unpopular state-level spending cuts or new taxes that might make selling Trump’s “big, beautiful bill” harder, especially as the president drifts from messaging on the law and affordability to other major issues, including the war in Iran.
Read more: https://www.politico.com/news/2026/03/25/trump-cuts-republican-state-budgets-00842704
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I'd think ALL states are going to have problems especially those that rely on sales taxes. Couple that with the possibility that states are going to be forced to consider cutting or suspending their fuel taxes and it just gets worse. And we've already seen cutting taxes, especially in response to economic slowdowns just worsens the shortfalls.
Thanks Trump. 