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Economist warns Utah officials to plan for reduced federal support, possible Medicaid and grant changes
Summary
In the same webinar, Robert Spendlove outlined how tariff and budget shifts at the federal level could reduce some COVID-era funding and alter Medicaid rules, and he advised local officials to treat federal grants as higher-risk revenue when crafting city and county budgets.
Robert Spendlove, senior economist with Cyence Bank and a former Utah state legislator, told a webinar audience that federal policy changes on tariffs, spending and program rules could push costs and responsibilities onto states and local governments.
Spendlove said the administration is pursuing a fiscal agenda that includes spending cuts and tax reductions and that several proposed options for changing Medicaid could reduce federal support and raise state and local liabilities. He advised local officials to treat certain federal revenues as "high risk" when planning budgets.
Detailing specific local impacts, Spendlove cited a Department of Health and Human Services slide showing Utah's Medicaid enrollment surge following expansion and pandemic policy: enrollment rose from roughly 70,000 to nearly 300,000 during the pandemic and has since returned to about 200,000. He said a CBO analysis prepared for the House Ways and Means Committee described multiple options for reducing Medicaid spending, including changes to the expansion population matching rate, caps on spending per enrollee, and stricter eligibility/enrollment rules. "If the federal government matching rate drops below 90%, Utah goes back and undoes the Medicaid expansion," Spendlove said, citing existing Utah law referenced in his slides.
Spendlove also pointed to examples of proposed federal grant reductions affecting Utah, including a referenced $84 million reduction in a COVID-related grant to the Utah Department of Health and Human Services, and a local example he said appeared on a slide about a downtown Moab lease that may be under review. He added that federal deregulatory pushes and a renewed emphasis on mining and critical minerals could change land- and resource-management practices that affect Utah counties.
For local budget planning, Spendlove urged officials to identify and segregate federal sources that are vulnerable to change, labeling them as "high risk revenue." He said officials should re-evaluate expectations for federal broadband and other infrastructure grants, and consider alternative scenarios for revenue and service levels. "If you're relying on federal government support, I think you need to be kind of setting that in, in a special category," he said.
Spendlove suggested officials track the evolving congressional debate and the summer congressional calendar: he expects negotiation windows to tighten by late summer and into the fall, which could leave local governments brief notice to adapt to changed federal funding.
Ending: The webinar host said attendees would receive the slide deck and recording; Spendlove offered to share materials and answer follow-up questions.
