As state lawmakers from across the country gathered in Boston last week for the National Conference of State Legislatures summit—the largest in the group’s history with more than 1,600 attendees—one question loomed large: How will states cope with the sweeping changes brought by President Donald Trump’s recent domestic spending and tax law? The new legislation, signed into law on July 4, 2025, is reshaping the landscape for health care and food assistance, with states scrambling to understand and adapt to the deep funding cuts and strict new requirements it imposes.
For Oklahoma state Sen. John Haste, the challenge is immediate and personal. “Number one was tax cuts. Number two, what the hell is going on in Washington?” Haste told his peers, reflecting on Oklahoma’s latest budget cycle. According to Stateline, while Oklahoma lawmakers managed another round of income tax cuts, they are still “wrapping their heads around the fiscal impacts” of Trump’s massive spending and tax law. The measure slashes funding for health care and food assistance, including a $209 million reduction in Medicaid funds for Oklahoma alone, and requires the state to spend an estimated $30 million more on new eligibility checks each year.
This story is playing out in statehouses nationwide. The new law, which extends tax breaks and boosts spending on the military and border security, is funded in part by significant reductions to Medicaid and the Supplemental Nutrition Assistance Program (SNAP), commonly known as food stamps. But the law doesn’t just cut funding—it also imposes costly new administrative burdens on states, forcing them to overhaul how benefits are managed and delivered.
One of the most significant changes is the expansion of work requirements for SNAP recipients. As reported by the Chicago Tribune, the law now mandates that able-bodied adults ages 55 to 64—previously exempt—must meet work requirements to receive benefits. This has left many older adults anxious and confused. Joann Montes, a public benefits outreach coordinator with the Greater Chicago Food Depository, described the uncertainty among seniors: “Our folks who are 60 and older are asking questions about whether they’re going to be able to receive SNAP. Will they have to go back to work?”
Illinois, where about 1.9 million residents rely on SNAP, is bracing for a potential $700 million price tag if it fails to meet new federally mandated payment accuracy levels—levels that, according to state officials, most states currently do not meet. Governor JB Pritzker’s administration is racing to change operations and avoid this financial cliff. “Illinois’ goal is to mitigate to the greatest extent possible the impact of the Trump spending bill on the SNAP program, and try to mitigate the harm it’s going to wreak on poor families across the state,” said Grace Hou, the state’s deputy governor for health and human services, in an interview with the Chicago Tribune.
But the hurdles are steep. The law requires 40 states and Washington, D.C.—all those that expanded Medicaid—to check paperwork at least twice a year to ensure enrollees meet new work requirements. States have been given $200 million to implement these changes by the end of 2026, but experts question whether that will be enough. “Regardless of how you feel about these provisions—whether these are opportunities or challenges, fantastic or awful—regardless, it’s going to be a heavy lift for states,” said Lauren Kallins, the National Conference of State Legislatures’ senior legislative director for state-federal affairs.
Traditionally, the federal government has fully funded SNAP benefits and split administrative costs with states. The new law upends that balance, requiring states to fund 75% of administrative costs and, in some cases, a portion of the benefits themselves. For Illinois, that means an additional $80 million in administrative costs and the possibility of a $700 million annual bill if payment error rates aren’t improved. The state has already budgeted for 100 new caseworkers and operations staff to handle the increased paperwork, but as Danielle Perry of the Food Depository put it, “Here the state is with less money and more challenge, going to have to take lemons and turn it into lemonade.”
The uncertainty is compounded by the lack of detailed federal guidance. States are still awaiting instructions on how to implement the new work requirements, and the timeline for these changes remains unclear. This has left officials like Rachel Otwell, spokesperson for the Illinois Department of Human Services, warning of a “constant churn of applications as people fall on and off eligibility.” Many recipients, especially those who have long been exempt from work requirements due to high unemployment, now face the prospect of losing benefits as those waivers expire.
Other states are grappling with similar dilemmas. Nevada state Sen. Fabian Doñate, a Democrat, noted that his state may have to cut Medicaid eligibility or services, since Republican Gov. Joe Lombardo opposes raising taxes. “That becomes a challenge, right? Do you cut the pregnant mom or the person that makes above 180% of the federal poverty level who’s under 50, or do you cut diapers for seniors?” Doñate asked during a panel discussion.
While most states are currently in strong fiscal shape—with solid credit ratings and deep reserves, as noted by S&P Global Ratings’ Geoffrey Buswick—those cushions may not last. Maryland state Sen. Karen Lewis Young expressed skepticism about the optimism surrounding state finances. “You’ve got to cut from someplace else,” she told Stateline. “If you’re losing a pretty large share of your federal match, who do you cut?”
For some states, creative budgeting may offer temporary relief. Utah’s legislative fiscal analyst Jonathan Ball told conference attendees that the state could rely on reserves for one-time administrative costs. “It’s a little bit maybe scarier, but it’s not a new sort of problem,” he said. Still, he cautioned that the long-term uncertainty is “huge.”
Meanwhile, the political ramifications are already taking shape. Democratic lawmakers hope to highlight the cuts in Trump’s law to sway voters in upcoming state races. Hawaii Senate President Ronald Kouchi warned that if lawmakers don’t make clear where the spending cuts originated, “they will be at our doorstep as the place of last resort.” Even with over $1 billion in reserves, Kouchi said, “There is no current financial ability for the state to meet the needs of everyone who is currently being impacted.”
Republican leaders, too, are wary of the law’s complexity and impact. West Virginia House Speaker Roger Hanshaw likened the process to “Obamacare 2.0: We have to pass this bill so we can find out what’s in it.” He summed up the prevailing mood: “We have no idea yet how we’re going to respond.”
As states scramble to adapt, the human cost is already being felt. Joann Montes, reflecting on her years working with SNAP, said, “Now, even the work requirements by themselves are going to isolate many people from food, from accessing food, just that alone. Personally, it scares me.”
The coming months will test the resilience and ingenuity of state governments—and the lives of millions of Americans who depend on public assistance—like never before.
