May 16, 2025

As the Budget Committee begins to run through the House reconciliation package this morning, an important reminder: every step forward on this budget has state leaders bracing for impact.

In order to fund all the new tax cuts for billionaires approved by Ways & Means, committees pushed trillions in cuts through markups and shifted massive costs onto states for the first time. Which means the “big, beautiful bill” is ready to blow some “big, beautiful” holes in state budgets.

ICYMI — State treasurers sounded the alarm this week on how the GOP budget will directly harm people, families, businesses, and the economies in their states.

Boston Herald - Trump’s ‘big beautiful bill’ will harm Bay State families, Treasurer warns

• A group of state treasurers are warning that the plan offered by Republicans in Congress to cover the cost of renewing President Donald Trump’s tax cuts for the wealthiest Americans will have dire consequences for the poorest U.S. families.

• “Its really hard to articulate the breadth of what this budget, specifically as it goes in hand with the other things that are going on through executive action and the like, has on a state like Massachusetts,” Treasurer Deb Goldberg said.

• “When Washington scales back its commitments it limits, not only our state’s potential, but the country’s,” she added. “Cutting all of this has direct implications on our state’s economy and our ability to invest in our communities and our people.”

• Goldberg, joined by Colorado Treasurer Dave Young, Illinois Treasurer Michael Frerichs, Controller for the City of Houston, Texas, Chris Hollins, Washington Treasurer Mike Pellicciotti, and Vermont Treasurer Mike Pieciak, said its simply not possible for states to make up the difference if those funds are cut.

• “I really feel strongly that we need Congress to reconsider this and to start to think proactively about what makes America tick and what the individual states have to add to a vibrant economy. They’re going to affect people from the very poorest families — working families — who are going to suffer the most,” she said.

• “Our state is going to see very negative impacts. These are not abstract. They are personal, and they are going to affect every single family in the state. And what happens here is going to affect the rest of the country,” she added.

Fortune - Democratic state treasurers rip GOP over budget bill — ‘taxing Barbies and G.I. Joes if you can even find them on store shelves’

• “Republicans are pushing this Reagan-era thinking that if we just free up capital for the wealthiest Americans, that it will be reinvested and somehow stimulate domestic economies, expand employment, and share the wealth for all,” said Washington State Treasurer Mike Pellicciotti. That view is “dated,” he said.

• Illinois Treasurer Michael Frerichs said House Republicans are executing the play President Trump called for by reducing health care spending to fund tax cuts for wealthy Americans. The impact, said Frerichs, will be that millions of Americans lose access to health care, including hundreds of thousands in Illinois.

• “States don’t have an extra $715 billion in revenue,” said Frerichs. “What Trump Republicans are proposing is a budget that takes the taxes you pay the federal government and drastically cuts the programs that keep hearts ticking and cancer at bay to afford tax cuts for the rich.”

The New York Times - Chasing Tax Cuts, Trump and Republicans Want to Make States Pay

• Under the banner of “revitalizing federalism,” the Trump administration recommended slashing $4.5 billion in education funds under a structure that White House officials have said “empowers states.” Mr. Trump also targeted more than $1 billion at the Environmental Protection Agency, and argued that its pollution-reducing grants had become a financial “crutch for states.”

• And the administration looked to strip $2.4 billion from a federal program to help local officials finance clean water improvements. The president’s budget posited that states “are responsible for funding local water infrastructure projects, not the federal government.”

• “It’s astounding, and what they said with it was, ‘You’ve had enough already. You should have rebuilt all your infrastructure,’” said Deborah B. Goldberg, the state treasurer of Massachusetts, on a call this week organized by an advocacy group for Democratic finance officials. “Well, every state has aging infrastructure, and you can’t rebuild it all at once.”

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