New Mexico’s legislators must open a special session on Wednesday to promote the financing of food assistance and rural medical care: the actions that the Democratic governor maintains that they are needed to “minimize the damage of the disastrous bill of President Trump” reducing federal taxes and expenses.
The special session follows one in Colorado, where the Democratic governor said that Trump’s tax cuts havoc on the state budget. Oregon Democratic officials are also fighting if a special session is needed. And California Democrats recently approved new spending measures aimed at counteracting Trump’s great bill.
None of that is happening in states led by Republicans.
The divergent responses highlight the partisan schism about Trump’s characteristic legislative achievement of his second term and raise the question: Are the states led by the Republicans who ignore the financial consequences, or the states led by Democrat are exaggerating the urgency?
“Democrats are probably doing a little for the great,” said Steven Rogers, associate professor of Political Sciences at Saint Louis who focuses on state governments.
“On the Republican side, they can also be well with that, or they don’t want to push Trump bear,” Rogers said.
It is likely that the new radical law, called “a great law of Big Beautiful Law”, is likely to affect some states more than others. Federal tax cuts could reduce the income of states that link their own income taxes to the Federal Code, starting with 2025 tax statements.
Federal reductions in expenses in Medicaid and food benefits could also make states spend more than their own money on social security network programs. But Medicaid’s new work requirements, which are among the most prominent changes, do not begin until 2027. Changes of administrative costs to states for food coupons begin in October 2026, with additional changes in costs based on performance in subsequent years.
New Mexico’s officials are taking ‘proactive’ steps
Democratic governor Michelle Lujan Grisham has asked New Mexico legislators to assign more money this fiscal year for food assistance and rural medical care.
Legislators also seek to expand state subsidies for health insurance policies bought through the exchange of the health care law at a low price, which covers about 75,000 residents. They indicate the potential for improved federal subsidies to expire at the end of this year.
“We are not going to sit unstably and observe that the disaster happens,” said the leader of the majority of the Senate of the democratic state Peter Wirth.
Although New Mexico hopes to lose around $ 200 million annually due to the new federal tax cuts, starting this fiscal year, it still has a great surplus thanks to the production of booming oil.
“We are in a fiscal position to be proactive,” said Wirth, “and really tries to keep the new Mexicans as harmless as possible to these cuts that come.”
California increases food programs
The legislation recently signed by Democratic Governor Gavin Newsom provides $ 255 million for California’s response to the great Trump bill and other changes in federal policy. That includes $ 84 million to try to reduce errors in benefits payments in the supplementary nutritional assistance program. These food benefits are currently completely covered by the federal government, but states with error rates greater than 6% could have to pay part of the cost of October 2027.
The great Trump bill also expands the work requirements for adults participating in Snap, which is expected to force some people to the program in the coming months. California legislation provides $ 40 million for the counties to implement the new SNAP and pump $ 20 million requirements to emergency food banks, an increase in one third on previously approved state funds.
“We have been as diligent, as strategic as we can to fill as many dollars as we can,” said Assembly President Robert Rivas, Democrat, The Associated Press.
The new expense occurs when California’s budgetary officials warn about an imminent multimillionaire deficit.
Colorado and Oregon cite tax cuts as a reason for action
Because their fiscal codes are closely linked to the Federal, most of the new federal tax exemptions are automatically applied to state taxes on rent in Colorado and Oregon.
In August, the Democratic governor of Colorado, Jared Polis, became the first to call legislators to a special session while citing Trump’s bill. His administration said that federal tax cuts exploded an estimated hole of $ 783 million in the current state budget.
The Legislature led by Democrat held part of that gap by eliminating some corporate tax exemptions and authorizing the sale of state tax credits to increase income.
In Oregon, Democratic officials are weighing if some of Trump’s fiscal changes are decoupled to avoid losing hundreds of millions of dollars of state taxes. Such a measure could allow the State to continue taxing tips and salaries of extra hours.
“It is a very politically risky bill, much less to have a special session for another fiscal vote,” said Democratic State Representative Rob Nosse in a recent bulletin. “But at the same time, it will allow us to avoid some of the cuts that reach medical care and food coupons.”
Republicans do not see urgency due to income losses
Like Colorado and Oregon, the states led by the Republicans of Iowa, Montana and Dakota del Norte also use the “federal fiscal income” as a starting point for their state taxes and automatically incorporate federal fiscal changes. However, officials have not raised great concerns.
Montana can lose approximately $ 114 million annually as a result of the new tax cuts. But legislators can probably wait until their next regular session in 2027 to address any impact, said Republican representative of the State Larry Brewster, president of the Interim Income Committee of the Legislature.
“I think it’s a concern, but I don’t think it’s an urgent problem for us,” he said.
The leaders of the North Dakota Legislature, which is not scheduled to meet until 2027, are arguing to hold a session at the beginning of next year, but not for federal tax cuts. Rather, legislators would decide how to spend the state participation of $ 50 billion in rural medical care subsidies included in the great Trump bill.
Iowa’s compliance to the Federal Fiscal Code could cost $ 437 million in this fiscal year, according to the Department of State Revenue. State finance could also suffer Trump’s commercial war with China, a higher export market for farmers. The State still has billions of dollars in reservations.
“We are in a good position to resist part of the AG and some of the effects of the great bill,” said Republican governor Kim Reynolds, “but we also have to be aware as we move forward.”
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The writers of Associated Press Jack Dura in Bismarck, North Dakota; Hannah Fingerhut in Des Moines, Iowa; Morgan Lee in Santa Fe, New Mexico; Trân nguyễn in Sacramento, California; And Claire Rush in Portland, Oregon contributed.
(Tagstotranslate) President Trump (T) Tax cuts (T) Federal Tax Cuts (T) Rural Health Care (T) Colorado (T) States
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