Trump cuts expected to cost Virginia hundreds of millions in next state budget

Legislative staff warned that the impacts of Trump’s spending cuts will be felt for years to come over multiple budget cycles.

The impacts of the Trump administration’s federal cuts are coming into focus for Virginia lawmakers. 

Trump’s cuts to federal funding for the Supplemental Nutrition Assistance Program (SNAP) alone will likely require lawmakers to find hundreds of millions of dollars in the state’s next budget to make up the difference, according to a legislative presentation to a committee of state lawmakers in Richmond on Thursday. 

It’s not clear yet that the $900 million that Republican Gov. Glenn Youngkin set aside earlier this year as a cushion for the impact of Trump’s cuts to the social safety net will be enough all the impacts of federal funding cuts. 

The goal of the presentation was to clarify what is known and unknown about the economic costs of Trump’s “One Big Beautiful Bill Act” and offer policy recommendations. Trump’s bill cuts trillions in federal funding for health care and food assistance for working people. 

According to the presentation, about 24% of Virginia’s economy relies on federal spending, and the state is home to more than 300,000 federal civilian workers. 

So it’s little surprise that Virginia’s unemployment rate has been on the rise for months amid Trump’s mass firings of federal workers. Local governments and businesses are worried about their finances, and Virginia is at a high risk of an economic downturn, according to a chief economist with Moody’s Analytics. 

Still, state officials say Virginia’s economy is currently fine, but at least some are cautioning that Virginia needs to act to address the impacts of Trump’s cuts. 

“We can tout how strong our economy is right now in the commonwealth, and it is in a good position,” state Del. Luke Torian (D-Dumfries) said at the conclusion of the meeting. “But I want to alert my colleagues that we have been forewarned this morning that there are going to be some changes and that there are going to be some challenges that we will have to face.”

According to the report, Trump’s changes to federal SNAP funding will cost Virginia $90 million in fiscal year 2027, and the state will likely be on the hook for millions more unless it can improve its SNAP error rate. The SNAP error rate is a measurement of whether states are sending SNAP benefits to eligible households and whether eligible households are getting the correct benefit amounts. It is not a measurement of fraud. 

Trump’s bill makes states with higher SNAP error rates pay more to fund the program. That would cost Virginia $270 million in fiscal year 2028 based on the state’s current SNAP error rate of 11.5%. 

Torian warned lawmakers that making use of rainy day money set aside to address revenue shortfalls was not an option for now. That money is intended as a one time bandaid and not as a long-term solution for spending pressures resulting from the realignment of federal policy. 

Legislative staff warned that the impacts of Trump’s spending cuts will be felt for years to come over multiple budget cycles. 

Policy recommendations in the report included legislation that would allow laid off federal workers to end leases early, providing additional support to the state’s eviction reduction program, and the creation of a rental and mortgage assistance program to support federal workers.

Legislative staff said they needed better information to estimate the costs of the Medicaid changes and what’s causing Virginia’s high SNAP error rate. 

State Del. Marcus Simon (D-Falls Church) likened Virginia’s financial situation, the warnings about the costs of Trump’s bill, and Republican optimism about the future, to a driver on the highway who’s just been warned there’s an accident ahead. 

“Feels to me like what we want to do here is maybe turn on our GPS and see if we can explore some alternative routes,” Simon said.