On July 4, 2025, President Trump signed H.R. 1, the One Big Beautiful Bill Act (OBBBA), into law. The bill contains hundreds of provisions on healthcare, tax, and spending priorities. Many of these provisions will directly or indirectly affect the states, their spending decisions, and their budget health.
Importantly, the OBBBA extends and modifies many of the tax changes from the 2017 Tax Cuts and Jobs Act (TCJA), which were set to expire at the end of this year. To offset some of these lost revenues, the OBBBA makes significant changes and cuts to healthcare and other programs, many of which are run by the states. While the OBBBA’s provisions broadly affect state budgets and spending priorities, their impact will vary based on each state’s fiscal health and exposure to federal programs.
The bottom line for states is that the OBBBA, if implemented as enacted, will force the states to make very difficult decisions when it comes to Medicaid and SNAP benefits for low-income individuals, and will put pressure on state budgets. But many of these provisions of the OBBBA will not go into effect until 2026 or beyond, so states do have a little time to begin preparing for the changes. There was initially talk of states calling special legislative sessions to adjust current state budgets in response to the OBBBA, but we think most states will have time to make changes during their next scheduled budget cycle.
In this report, MultiState’s healthcare, tax, and budget experts dive into the individual provisions of the OBBBA that are most important to the states and their budgets over the next few years. Download the report here.