President Donald Trump’s landmark legislation is creating a severe budget crisis for states as up to 20 governors face reelection in 2026. The cuts to health care and food assistance for low-income Americans are forcing states to confront billions in lost federal funds, threatening education, public safety, and disaster relief programs. This is happening as up to 20 state leaders face reelection in 2026, forcing them to figure out how to message the fallout as their parties battle for control over the House next year.
“We don’t put these budgets together that have a lot of fluff and rainy day funds that are easily accessible,” said Democratic Kansas Gov. Laura Kelly, who chairs the Democratic Governors Association. “All of us are trying to figure out how to mitigate the damage that will be done to our constituents.” Kelly, whose term ends next year, said governors across the country are now in “a world of hurt and concern.”
In deep blue New York, Democratic Gov. Kathy Hochul is contending with an $11 billion budget hole as she faces reelection next year, possibly against Trump acolyte Rep. Elise Stefanik. Some 2,500 miles away in Arizona, Democratic Gov. Katie Hobbs is warning the state can’t even begin to cover the losses from the federal legislation passed earlier this month. And in Nevada, Republican Gov. Joe Lombardo has to try to persuade his voters of the merits of his party’s tax cuts geared toward the working class as he runs for reelection, even though he too has warned against slashing Medicaid.
It all amounts to a serious financial problem that’s even more acute for governors up for reelection next year. Many will have to decide between politically unpopular tax hikes or further changes to Medicaid that could kick more people off the program. State leaders have begun crunching numbers as they try to account for the looming funding gap.
Kelly’s fellow Democratic governors are shackled with the same budget constrictions as Republicans — and similarly will face fallout. But despite the impending headache, the party sees political upside. Democrats intend to slam Republicans in the midterms over their cuts to Medicaid and food assistance in order to pay for tax cuts that largely benefit the wealthy. That message will be a centerpiece of the minority party’s midterm strategy, and they’re anticipating voters will blame the GOP when they lose Medicaid coverage or experience the closure of a local hospital.
In a twist that stands to advantage Democratic governors, many of the GOP-backed cuts won’t take effect until after next year’s elections — a provision Republicans instituted to armor itself.
“While the legislation is terrible, it is good ammo for governors in battleground states,” said Matt Grodsky, a Democratic consultant in Arizona. “In Arizona we know this will increase costs on families, utility rates will go up, for some families taxes will go up, and even if you’re not on Medicaid chances are your older relatives are.”
Illinois Gov. JB Pritzker, a frequent Trump critic, will focus his campaign messaging on the president. “It’s the federal government and MAGA Republicans that are at fault for your food assistance, your rural hospitals closing or you getting kicked off Medicaid,” said a person close to Pritzker’s reelection campaign, hinting at the Democratic governor’s strategy for maneuvering around state budget concerns.
Last week, Pritzker featured the owner of Billie’s coffee shop in Chicago talking about the local business affect of the president’s trade policies, as a way to localize Trump’s actions and influence swing voters. “Packaging bags, the costs have increased,” the owner Gina says in the video. “That’s just our way of life now.”
Democrats who control the Nevada state legislature, however, believe that the legislation will create more harm than good, and when people start to lose their health insurance they will blame Lombardo for not speaking out more against the law.