What States Need to Know About the
One Big Beautiful Bill

We have gone through the bill so you don’t have to. The Dispatch from DC breaks down what’s in OBBB and highlight how these changes could impact state leaders, program administrators, and budgets in the years ahead.

SPN Dispatch from DC Special Edition by Jennifer Butler
July 9, 2025

The dust is still settling in Washington after last week’s last-minute drama to get President Trump’s “One Big Beautiful Bill” (OBBB) through Congress. For anyone who missed the action, Alaska emerged as the clear state winner, thanks in no small part to a handful of “gimmies” thrown in to persuade Senator Murkowski’s decisive vote, including a niche deduction for Alaska Eskimo whaling captains. But while much of the recent analysis is focused on tax cut extensions and Trump campaign trail promises such as “no tax on tips,” the real story for states is buried in the 800 plus pages. This bill dramatically reshapes how two key federally funded programs, Supplemental Nutrition Assistance Program (SNAP) and Medicaid, will be managed, ratcheting up pressure on state budgets across the country.

We have gone through the bill so you don’t have to. In this issue, we break down what’s in OBBB and highlight how these changes could impact state leaders, program administrators, and budgets in the years ahead. Plus, we’re including a heads-up on a critical EPA Notice of Proposed Rulemaking (NPRM) that could redefine state authority over power plant emissions, an important deregulatory effort where your comments and engagement will matter.

Supplemental Nutrition Assistance Program (SNAP) Reforms
Electronic Vehicle and Energy Credits
Medicaid Reforms
Border State and Local Government Assistance
Tax Credit for Education Scholarships
State and Local Tax (SALT) Deduction

Supplemental Nutrition Assistance Program (SNAP) Reforms

Work Requirements (Section 10102)
Applies to able-bodied adults without dependents aged 18–64 (previously capped at age 54), adults with dependents 14 and over and removes the exemptions for veterans, homeless, and foster children that have "aged-out" of the system. States may no longer gerrymander waiver regions, instead must use standardized Labor Market Areas as defined by Bureau of Labor Statistics. Waivers are allowed only for Alaska and Hawaii if their unemployment is greater than 1.5 times the national average. All existing waivers expire Dec 31, 2028.

Increased Admin Cost Share for States (Section 10106)
Increases state share of SNAP administrative costs from 50% to 75% beginning FY2027.

Benefit Cost Share for States based on Error Rates (Section 10105)
Begins in FY2028. States with a SNAP payment error rate (PER) above 6% must share benefit costs:

Payment Error Rate (PER) Shared Benefit Costs
≥6% and <8% 5%
≥8% and <10% 10%
≥10% 15%

  • States may use FY2025 or FY2026 PER for FY2028; PER from three years prior used in later years.

Other Changes to SNAP:

  • Thrifty Food Plan (Section 10101) - Addresses Biden's 2021 benefit expansion by locking in 2021 Thrifty Food Plan as baseline; future updates only every five years if cost-neutral (starting Oct 1, 2027); annual inflation-based adjustments allowed starting FY2026. Allows regional adjustments for Alaska, Hawaii, Guam, and the Virgin Islands.

  • Internet Fees Disallowed (Section 10104) - Internet service fees no longer deductible under excess shelter cost formula.

  • Non-Citizen Household Income (Section 10108) - Income of household members ineligible for SNAP due to immigration status must be counted for eligibility determinations