How would federal cuts impact the Wisconsin state budget?

by Emily Miota | May 12, 2025

Home 9 Tax and Budget 9 2025-27 State Budget 9 How would federal cuts impact the Wisconsin state budget?

From Boscobel to Burlington, Wisconsin families deserve a basic foundation that includes enough food to eat and health care. 

But Congressional Republicans and the Trump Administration are trying to take away food assistance, health care, and other vital public services, all to pay for more tax giveaways to the nation’s wealthiest 1%. The proposed cuts will lead directly to increased hunger and lack of care for millions, as well as significant harm to both local economies and state spending priorities over time. 

Here in Wisconsin, everyday families would feel these cuts almost immediately. Almost 1.2 million Wisconsinites rely on BadgerCare, a WI Medicaid program, for health care and more than 900,000 children, adults, and seniors count on FoodShare, also known as SNAP, to afford groceries.

 

Republicans’ budget would saddle Wisconsin with enormous costs.

Republicans’ budget plans pass the buck to state lawmakers, forcing states to shoulder a larger share of the costs for these vital services. A mix of harmful changes to Medicaid would add new costs for states, disproportionately impact rural providers, and undermine health coverage for millions of people as a result. And for the first time, states may be asked to pay for part of the cost of SNAP benefits through a match which could force states to cut critical SNAP benefits, reduce eligibility, or both.

From Richland Center to Racine, families will pay the price for cuts in Washington.

Deep cuts to these programs will have ripple effects on local economies and our ability to fund public education, roads and bridges, public safety, and essential services that Wisconsinites count on everyday. This in turn, would undermine your ability to deliver on your promises to constituents. 

Wisconsin received more than $17 million in federal funding in FY24, which is approximately one in four dollars of total state spending. 

Local governments will also be impacted by a combination of reduced federal funding and state cuts to local revenue sharing.

Wisconsinites are looking to state lawmakers for strong leadership.

As our communities confront an uncertain economy, constituents are looking to their state leaders to make good on their promise and put the needs and values of Wisconsinites first. 

You can’t cut billions of dollars from BadgerCare and FoodShare without harming people. 

State legislators must leverage their platform to push back on Congressional leaders’ damaging budget cuts.

6 Ways Federal Budget Cuts Would Hurt Wisconsin Children & Families

#1 Tying Wisconsin lawmakers hands in tight budget negotiations

Even if the Governor and state legislature tried to fill the gap from federal cuts, it would mean cutting spending on other priorities important to Wisconsinites.

Maintaining health coverage and food assistance with less federal funding would become all but impossible, especially during economic downturns when state revenues decline at the same time that residents’ needs jump up. The growing gap would leave economic downturns more harmful for longer.

#2  Forcing Wisconsin to cover the cost of cuts to food assistance

60% of Wisconsin households enrolled in SNAP are raising kids and 36% include seniors or adults with disabilities. 18,000 veterans participate in SNAP each year.

Congressional Republicans’ proposed cuts of $230 billion or more from SNAP would mean states struggle to maintain benefits. Covering the costs of just 10% of SNAP benefits would cost Wisconsin $136 million, which is equal to the salary costs of 2,175 teachers.

#3 Taking aim at local business owners and working people

Cuts to SNAP would mean families spend less on groceries and other local businesses to cover the gap, especially in rural communities.

SNAP participation rates are higher in rural than in metropolitan areas (14.3% compared to 11.9%). In a weaker economy, every additional public dollar spent on SNAP generates $1.54 in economic activity when households shop at local stores, keeping money flowing through communities.

 #4 Upending Wisconsin’s health care system

Wisconsin’s many Medicaid-funded programs currently provide services to:

  • 1 in 3 Wisconsin children across both rural and metro areas;
  • 1 in 3 Wisconsinites with disabilities;
  • 4 in 7 Wisconsin nursing home residents;
  • 1 in 6 Medicare beneficiaries in Wisconsin; and
  • 1 in 7 Wisconsin adults ages 19-64, more than half of whom are parents/caretakers

Cutting federal funding for Medicaid by hundreds of billions of dollars would force states to cut eligibility, benefits, or slash reimbursement rates for healthcare providers. Increases in uncompensated care or reductions in provider rates would likely lead to layoffs, the closure of rural hospitals, and a wide range of service cuts and higher charges that would affect all patients, far beyond those covered by Medicaid.

#5  Jeopardize access to medical care in rural communities

Medicaid cuts would make it harder for rural hospitals, clinics, and doctors to continue to provide care for anyone in their communities. 

Medicaid funding helps keep rural hospitals and health care providers afloat and provides a crucial source of care for:

  • 32 percent of children in Wisconsin small towns and rural areas rely on Medicaid/CHIP for their coverage.
  • Among Wisconsin adults younger than 65, about 15 percent of those in small towns and rural areas get their coverage through Medicaid/CHIP.
  • Among seniors, 12 percent of those living in Wisconsin’s small towns and rural areas get their coverage through Medicaid/CHIP.

Medicaid funding has helped them stay afloat in the face of declining rural populations, lower incomes among rural residents, and lower levels of private insurance.

#6   Worsening the impacts of a recession

Many families in our state are already struggling with the high cost of food, housing, and health care. Extreme tariffs are making things worse. 

When the economy hits a downturn, more families in Wisconsin need to turn to BadgerCare and FoodShare to make ends meet. The last thing families in Wisconsin need is groceries and health care taken away. And, the state would have to find even more dollars at a time when revenues are dropping – likely resulting in deeper SNAP and Medicaid cuts.

  • Emily Miota

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