Dem
47
GOP
53
The BBB that Congress passed last year is starting to be felt—by red states. And it is making their budget problems worse. The new requirements for Medicaid and SNAP are costing some states as much as $450 million this year, squeezing their already tight budgets. This is forcing them to make cuts in services, many of which will not be popular.
National Republicans were already facing blowback on the bill, which cut many programs for ordinary Americans in order to provide a big tax cut for millionaires and billionaires. Now state politicians are having to make unpopular decisions that they will have to defend in November. Idaho state Sen. Jim Guthrie (R) said: "The feedback I'm hearing from citizens is that extra few bucks on their [return] at the end of the year, because of the taxes they didn't have to pay, comes secondary to wanting us to take care of the things that government needs to be invested in. Which is your infrastructure and your roads and bridges and schools and also your Medicaid population." In other words, the BBB didn't bother Guthrie so much because he couldn't be blamed for it. Now that he will have to vote on state-level cuts forced by the BBB, he can be blamed for it. He doesn't like that.
States have some flexibility here. For example, workers who get tips or overtime pay don't have to pay federal income tax on them (subject to many restrictions). However, states don't have to give workers the same break on state income taxes, and some are not doing so. Nebraska, for example, is continuing to tax tips and overtime as it had been doing. Indiana is following the feds, but that is going to cost the state $251 million in revenue. And unlike the federal government, states have to balance their budgets, so Indiana will have to find $251 million in spending to cut. The people on the receiving end of that will probably not like it. Missouri, for its part, is working on cutting addiction services and aid to people with disabilities. The general principle is to find programs that mostly affect people who vote Democratic anyway and cut them.
Iowa is taking a somewhat different approach. The state House just passed a bill increasing taxes on HMOs (Health Maintenance Organizations). The problem is that HMOs are popular in Iowa and the result will probably be cuts in services, complete with an explanation why they are being cut and whose fault that is. (V)