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Experts: 'OB3' law and new grant rules increase state fiscal exposure; Utah better positioned but faces administrative costs
Summary
State-facing provisions in the recently passed federal bill (referred to at the hearing as 'OB3') and a new Executive Order on grants will shift more fiscal responsibility to states, experts told Utah’s commission. Utah avoids some immediate SNAP match costs but will see higher administrative expenses and faces possible Medicaid financing limits in coming years.
Federal changes enacted this year and new executive grant oversight were a principal focus for State Policy Network witnesses who told the Utah Federalism Commission on Nov. 20 that the changes reframe fiscal risk for states.
Jennifer Butler, senior policy advisor at the State Policy Network’s Center for Practical Federalism, highlighted an executive order (Improving Oversight of Federal Grantmaking) that allows federal agencies to pause or review new discretionary grants and to insert termination-for-convenience clauses that could cancel grants midstream. "That introduces an entirely new level of risk," Butler told the commission, noting states could hire staff and sign contracts assuming multi-year federal…
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