KEY POINTS
  • The White House budget office ordered federal agencies to pause all financial assistance on Tuesday.
  • Utah Senate leadership said the move could have a significant impact on the state budget.
  • Last year, more than a quarter of state spending was funded by federal dollars.

Utah Senate President Stuart Adams said on Tuesday that the Trump administration’s pause on federal assistance came as a total surprise but that the state is better situated than most if the funding freeze continues.

On Monday, the White House budget office sent a memo to government agencies ordering them to “temporarily pause all activities related to obligation or disbursement of all federal financial assistance.” The order requires agencies to answer questions about how their funds are used before Feb. 7.

The details of the pause were not immediately clear. There appeared to be a moratorium on federal grants and loans, but a federal judge temporarily blocked the move on Tuesday.

White House press secretary Karoline Leavitt told reporters on Tuesday that the “temporary” pause should not affect “individual assistance.”

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Adams was alerted of the news on Tuesday morning by the Wasatch Front Regional Council, he said.

“I’ve tried to wrap my head around this. It is a shock,” Adams, R-Layton, said. “We receive a lot of money from the federal government.”

In 2024, the state’s $29.4 billion budget for the upcoming fiscal year counted on over $8.2 billion in federal funds, making up 28% of the state’s revenue stream — more than any other source.

An annual report submitted last year by State Auditor John Dougall found that the state still has a “heavy dependence” on federal funds. The audit recommended that the Legislature decrease its reliance on the federal government in light of concerns of the national debt and congressional dysfunction.

Adams pointed to several state practices that would help Utah weather an $8 billion cut to the state budget.

Every December, lawmakers require state agencies to explain what they would do if there was no federal funding available, Adams said.

Whereas state transportation appropriations used to be entirely funded by the federal government, they are now mostly driven by state dollars.

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Executive Appropriations Chair Jerry Stevenson, R-Layton, said the legislative budget process constitutes a “realignment,” where each committee is asked to find savings.

They have already identified about $400 million in savings throughout the base budget process, Stevenson said.

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Executive Appropriations Vice Chair Scott Sandall, R-Tremonton, said it is too early for a decision to pivot the state’s budget plans based on the Trump administration’s actions.

“We’re going to continue to plan as if the federal funds are going to be here, as we’ve done in the past,” Sandall said. “If we get closer to it, and we understand certain funds will be released and others won’t, at that point we would make adjustments, but those would be hard decisions quite honestly.”

Just because Monday’s announcement was “a shock” doesn’t mean it will be detrimental longterm, according to Adams. Companies are sometimes required to undergo serious rightsizing, Adams said, adding that he doubts that all of the state’s more than $8 billion would be affected.

But Adams will wait until he sees “the outcomes” of President Donald Trump’s approach before he says definitively whether the short jolt of budget shock therapy was good policy.

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