By FOCUS, A Leonine Business
On July 4, Republican President Donald Trump signed HR 1, known as the One Big Beautiful Bill Act (OBBB). The law includes several wins for local governments—such as temporarily raising the SALT deduction cap from $10,000 to $40,000 and making permanent both the Opportunity Zone and New Markets Tax Credit programs. However, it also imposes deep cuts to social safety net programs like SNAP and Medicaid and rescinds substantial funding from the U.S. Department of Transportation’s Neighborhood Access and Equity Grants, affecting highway connectivity projects in many states. The Tax Foundation praised the permanence of R&D and equipment expensing and the individual tax cuts from the Tax Cuts and Jobs Act of 2017, but criticized the OBBB for falling short of comprehensive tax reform.
NBC News reported that lawmakers in several “blue” states are calling for special legislative sessions to address budget shortfalls and protect health care and food assistance programs. Colorado and Minnesota, which expanded Medicaid early under the Affordable Care Act, expressed concern over the law’s fiscal impact. Colorado Democratic Gov. Jared Polis announced a special session beginning August 21, citing an estimated $1.2 billion reduction in the state’s budget. Proposed measures include allowing the sale of tax credits and extending the decoupling of the qualified business income and FDII deductions. Connecticut legislators anticipate a special session in late September or October, with Medicaid cuts alone expected to cost the state hundreds of millions annually. Some lawmakers argue the state “over-corrected” from past poor savings habits, diverting too much from core programs. A more detailed report on the OBBB’s impact is expected in August.
New Mexico Democratic Gov. Michelle Lujan Grisham said she is prepared to call a special session if needed and is reviewing the budget “with a fine-toothed comb” to identify threats. According to the Albuquerque Journal, a session is being considered for late August or early September, though a final decision has not been made. Oregon’s preliminary analysis projects a $15 billion funding loss due to the OBBB, with tax cut provisions expected to reduce state revenues by nearly $1 billion during the current budget cycle. Democratic Gov. Tina Kotek’s office plans to convene lawmakers and stakeholders to support those most affected by the cuts. Virginia lawmakers also expect to be called into special session in mid-September, though revenue implications remain unclear due to the state’s reliance on federal tax returns.
As the full impacts of the OBBB continue to unfold, more states are likely to call special sessions or prioritize budget responses during their 2026 legislative cycles.
FOCUS will continue to monitor developments on the effects of the OBBB across the country.
by Alexis Sly 8/18/25
