Some U.S. states accustomed to sitting on fattened reserve funds are seeing a reversal of trends as the effects of the One Big Beautiful Bill are expected to make things worse.
"After years of record highs, states' rainy day fund capacity—the number of days that reserve balances could cover state operations—fell in fiscal year 2025, the first decline since the 2007-09 Great Recession," writes Page Forrest and Justin Theal of the Pew Foundation.
Forrest, an associate manager for Pew, and Theal, a senior officer, teamed up on an
The
Pew postulates that pressure on state budgets are due to get worse before they get better.
"Demands on reserve balances are growing," said Pew. "New federal Medicaid and SNAP policies are expected to increase states' administrative costs and the share of program expenses that states must cover, and to constrain key revenue sources over the coming years."
Democratic Governors of Pennsylvania and New Jersey are already
Gov. Shapiro's plan would tap $4.5 billion of Pennsylvania's $7.5 billion rainy-day fund.
Governor Mikie Sherrill's proposal would use $2 billion of New Jersey's $7.2 billion general fund surplus.
Despite the crunches in some locales, "Rainy day fund capacity increased in 24 states in fiscal 2025, with all but one of those states raising their balances," said Pew.
"Of the 26 states where rainy day fund capacity decreased, 14 drew on their reserves, 10 grew their balances—but did so more slowly than they increased expenditures—and two maintained flat reserves as expenditures grew."
Wyoming is sitting in the best position with the ability to run over 320 days on reserves only.
Pennsylvania comes in at 57.1, New Jersey has 0. The state of Washington is at 12.8 days and Illinois is 15.6.
Idaho, North Dakota, Alaska, Arkansas, and Kentucky are all over 100 days.
The National Council of State Legislators is
"Historically, the federal government has covered 100% of benefit costs and 50% of administrative expenses," said NCSL.
"That will change once the administrative cost shift takes effect on Oct. 1 this year, followed by the benefit cost shift on Oct. 1, 2027."
To shoulder the burden many states have introduced or enacted legislation to provide funding to support SNAP administration.
Ohio has already appropriated funding to pick up the slack.
Eleven other states have pending legislation aimed at investing in SNAP-related administration upgrades.
NCSL is also lobbying Congress for a delay of the cost-sharing provisions until fiscal year 2030 via a
The National Governors Association, the National Association of Counties, the National League of Cities and the U.S. Conference of Mayors have also signed onto the letter.
