Federal chaos snarls state budgets

By Adam Aton | 03/03/2025 06:24 AM EST

States are grappling with frozen federal funds and fired feds. “That is how a recession starts,” a Pennsylvania appropriator said.

Pennsylvania House Appropriations Chair Jordan Harris speaks with members of the media.

Pennsylvania House Appropriations Chair Jordan Harris speaks with members of the media on Feb. 4 at the state Capitol in Harrisburg, Pennsylvania. Matt Rourke/AP

States across the country are beginning to write budgets with enormous question marks around federal funding.

The Trump administration’s efforts to freeze funding — and slash the government workforce — are casting a long shadow over state capitals. Budgeting has become an exercise in guesswork, particularly for the state climate and energy programs that expanded almost everywhere due to the Biden administration’s historic climate investment.

“Any kind of draconian cut at the federal level could be devastating to states,” said Democratic state Rep. Jordan Harris, chair of the Pennsylvania House Appropriations Committee. “This could be devastating for Pennsylvania and our economy. But that means it could be insurmountable for some of the other states across the union.”

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The mass firing of federal workers undertaken by President Donald Trump and billionaire Elon Musk could ripple into the housing market and the broader economy, Harris said. Federal workers comprise a major slice of some states’ workforces.

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