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The that the U.S. House of Representatives passed could cost Virginia up to $540 million a year to administer food assistance for low-income residents and pay up to 25% of benefits, the state commissioner of social services told a on Monday.

That cost could come down to $270 million under changes proposed in the U.S. Senate to the pending budget reconciliation bill. But it doesn鈥檛 include the potential additional expense to local social services departments that administer the Supplemental Nutrition Assistance Program, or SNAP, and already pay a portion of the state鈥檚 administrative costs.

Nor does it include higher state costs for administering new, stricter work requirements both for SNAP and Medicaid, which provides health care to 1.9 million Virginians. It also does not include the expense of interviewing all Medicaid participants twice a year to determine if they鈥檙e still eligible for benefits under health safety net program that the state pays for with the federal government.

The budget reconciliation, as it passed the U.S. House, also would completely eliminate the Low-Income Home Energy-Assistance Program. Established during the second national oil crisis in 1980, the program helped more than 200,000 needy Virginia households heat or cool their homes last year.

鈥楢 sobering presentation鈥�

鈥淚t was a sobering presentation, to say the least,鈥� Del. David Bulova, D-Fairfax, told Virginia Social Services Commissioner James Williams after a review of potential costs to the state with the House Appropriations Committee.

The state budget committee already had heard from Secretary of Finance Steve Cummings that Virginia can expect to lose $350 million to $400 million in federal grants that the Trump administration has paused, primarily for health programs established during the COVID-19 pandemic and establishing an electric vehicle charging network that the new president does not support.

House Appropriations Chairman Luke Torian, D-Prince William, said later in an interview that while members of the committee expected challenges from proposed federal spending cuts, 鈥減erhaps we didn鈥檛 realize ... they would pass so many responsibilities to the states.鈥�

With Gov. Glenn Youngkin scheduled to present the final proposed two-year budget of his expiring term to assembly money committees in December, Torian said, 鈥淚t is going to be interesting to see what the governor puts into his outgoing budget to deal with some of the challenges that are going to be before us.鈥�

Youngkin is out of the country on a trade mission to Europe. Secretary of Finance Steve Cummings said the good news is that Virginia鈥檚 budget revenues are not yet showing the effects of new tariffs on imported goods or cuts to the federal workforce that will not become fully apparent until after employee buyout packages become effective in September.

The governor鈥檚 press secretary, Peter Finnochio said, 鈥淰irginia is in a strong financial position to dynamically adapt to shifts in federal policy.鈥�

鈥淭he governor and his team remain engaged with the Congress and the Trump Administration to offer advice and counsel on the impact of policy changes on the commonwealth,鈥� Finnochio said in a statement.

鈥淥ur strong and dynamic position has allowed Virginia to fully fund shared priorities like education and Medicaid, as well as make historic commitments to our 鈥榬ainy day鈥� funds and reserves, including setting aside $900 million of the projected surplus as a cushion, leaving the General Assembly and next governor in a good position to address any necessary changes in January.鈥�

鈥淭he administration will continue to monitor and review the budget spending bill as it progresses,鈥� he added.

In the meantime, Virginia is likely to meet or exceed the amount of tax revenue necessary to pay for budgeted spending in the fiscal year that will end on June 30.

With the rate of inflation slowing and consumer sentiment starting to rebound after plummeting this spring, Cummings said the administration even sees 鈥渁 potential pathway to meeting鈥� revenue requirements for the second year of the newly revised two-year budget, which will begin on July 1.

Job growth slowing

Even so, he acknowledged that 鈥渨e all see that job growth is slowing,鈥� as the state鈥檚 unemployment rate has increased slightly to 3.3% and the labor participation rate has decreased slightly.

Secretary of Labor Bryan Slater said on Monday that the state has identified about 1,100 unemployment claims from federal employees working in Virginia. About 3,000 employees of the top 500 federal contractors have filed claims in Virginia.

The Youngkin administration is preparing for potential federal job losses through its 鈥淰irginia Has Jobs鈥� initiative, using virtual job fairs to connect unemployed residents to private employers with openings for jobs that could match their skills.

鈥淲e鈥檙e trying to be there to address their needs, whatever their situation,鈥� Slater said.

Both chambers of the Democratic-controlled General Assembly have established emergency committees to assess the potential effects of proposed federal cuts on state revenues and services, but the legislature has not determined yet whether it will convene in special session this fall to consider changes to the current state budget.

When Del. Delores McQuinn, D-Henrico, asked the social services commissioner if the Youngkin administration would 鈥減ush back鈥� against the proposed cuts, Williams replied, 鈥淲e are providing the impact in Virginia to our federal partners.鈥�

For example, he said pending federal legislation currently would cut federal spending and shift costs to the state beginning in October, three months into the state fiscal year and before the assembly has met in its regular 60-day session to consider the governor鈥檚 proposed budget.

鈥淭he rules might be there, but we might not be able to meet some of them,鈥� Williams said.

Local governments

Reaction to the commissioner鈥檚 presentation was particularly strong among local governments, which administer SNAP, Medicaid and other safety net programs and determine eligibility for benefits.

鈥淲hat we heard (on Monday) is that the potential cost of these federal changes to one state agency alone, the Department of Social Services, is well in excess of $600 million annually,鈥� said Joe Flores, director of fiscal analysis at the Virginia Municipal League.

鈥淐ombined with proposed reductions to Medicaid, school nutrition programs, public health, and mental health services, the general fund impact could easily exceed $1.0 billion each year in the (Health and Human Resources) Secretariat.

鈥淏ut absent a comprehensive list of reductions, how will state and local officials evaluate which programs and services merit continuation?鈥� Flores asked. 鈥淏ecause we won鈥檛 have the resources to absorb cuts of this magnitude.鈥�

Rebecca Morgan, director of social services in Middlesex County, and president of the Virginia League of Social Services Executives, said local governments already pay 15.5% of the state鈥檚 share of the cost to administer the SNAP program. If the state鈥檚 costs go up under the federal legislation, Morgan said, 鈥淚t would be an additional burden for every locality across the commonwealth.鈥�