Bracing for Change: How Federal Cuts Could Reshape State Budgets and Services
Federal policies will pressure states, with downstream impact on multiple sectors
Federal funding reductions will force difficult state decisions as they wrestle with cutting services or increasing spending, including in key areas like Medicaid, SNAP, disaster aid, and education. While states are financially well-positioned with strong reserves and low debt, downstream entities—such as hospitals and schools—may struggle as states may not backfill federal cuts. States are navigating these changes at the same time they are projecting softer revenue growth, coupled with rising labor and construction costs, exacerbated by uncertain trade and immigration policies.
- States revenue growth will slow amid global macroeconomic headwinds
- Changes to Medicaid will impose new administrative and financial burden on states
- States will bear a higher burden of disaster recovery costs and vulnerable populations will have less ability to rebuild
- Reduction in federal support for social services will force states to increase their own funding or risk service providers scaling back
- Downstream entities like hospitals, school districts, and higher education will be more challenged as states may not fully backfill the reduction of federal funding
Speakers
Hetty Chang
Associate Managing Director
Moody's Ratings
Daniel Steingart
Associate Managing Director
Moody’s Ratings
Chandra Ghosal
Vice President - Senior Credit Officer
Moody’s Ratings
Denise Rappmund
Vice President - Senior Analyst
Moody’s Ratings
Vanessa Chebli
Analyst
Moody’s Ratings
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Hetty is an Associate Managing Director for MIS Ratings and Research in the US Public Finance Group. She leads a team of analysts responsible for a portfolio comprising US States and Territories, Mass Transit and US Federal Leases.
Previously, Hetty led a team of Associate Analysts in Ratings and Research Support supporting lead analysts in the US Public Finance Group and the Financial Institutions Group in the Americas. Prior to that, she was a Team Leader of analysts in US PFG covering local governments in eight Midwest states and was based out of the Chicago, Illinois office. Hetty initially joined Moody’s as an analyst on the Midwest Local Government team in 2003.
Hetty has participated in various strategic initiatives, including kickstarting R&R Global Training Councils for the fundamental ratings teams and serving as an MCO Corporate Social Responsibility Impact Leader Chair. She has represented Moody’s as a member of the National Board of Directors of Women in Public Finance and as a board member of the Chicago Municipal Analyst Society, a local constituent of the National Federation of Municipal Analysts.
Prior to joining Moody’s, she was a senior consultant at KPMG LLP in the Dispute Advisory Services practice, providing accounting, valuation, and litigation arbitration services to corporate and public sector clients. Hetty has a BS in Human Development from Cornell University and an MS in Urban Policy from the New School University in New York City.
Dan joined Moody’s Healthcare Ratings team in 2007. He covers hospitals in Massachusetts, North Carolina, South Carolina, Alabama, California and Washington in addition to several other states. Dan is a 2018 recipient of the Bond Buyer’s Rising Stars award and is the author of multiple research publications including the Not-for Profit Healthcare Sector Outlook for 2020, the Not-for-Profit Healthcare Rating Methodology and research on the topics of: the Affordable Care Act, academic medical centers, payer-provider consolidation, and investment liquidity.
Prior to joining Moody’s, Dan worked as a researcher at a think tank in Washington, DC and in community development in Russia and Israel. He holds a B.A. in political science from Binghamton University, a Masters in International Affairs with a concentration in finance from Columbia University, and earned the Chartered Financial Analyst designation in 2011.
Chandra Ghosal is a Vice President - Senior Credit Officer on the States Ratings team, covering both US States and federal lease credits.
Chandra previously managed the Municipal Supported Products Group within US Public Finance Group which is responsible for assigning ratings to variable rate bonds supported by letters of credit or conditional liquidity facilities. Chandra also led Moody's research and analysis on the credit impact of state and local government infrastructure condition and investment trends.
Chandra joined Moody's in 2011 as a local government rating analyst in the Chicago office where he covered tax and revenue backed local government credits. He relocated to New York in 2013 where he began covering credits in the Southeastern region.
Prior to joining Moody's, Chandra worked for the New York City Office of Management and Budget. He is a graduate of Cornell University, from which he holds a BA in Government and an MPA in Public Administration.
Denise Rappmund is a Vice President/Senior Analyst on the States Rating Team, currently covering several state governments, mass transits and state-sponsored property insurance issuers, including Florida, Kentucky, Massachusetts, West Virginia, North Carolina, MBTA and DART. Prior to joining the States Team, Denise was a lead analyst on the Southwest Local Government team, and covered Texas, Colorado and Kansas, during which time she was the state lead for Kansas, lead for the City of Dallas, and headed up the team’s Colorado metropolitan district sector.
Prior to joining Moody’s in 2014, Denise was a public finance investment banker with Piper Jaffray in California. Over the course of her nearly two-decade career in public finance, she has developed expertise in a broad range of sectors and complex structures, spanning macro areas like international trade and the economies of the US-Mexico border, to concentrated economies in sectors like energy or tourism; as well as real estate and project-specific expertise in special district transactions covering hotels, convention centers, commercial and residential developments.
Denise holds a B.A. in economics and international affairs from the University of Colorado, Boulder.
Vanessa is an Analyst in the Healthcare Ratings Group. She is a lead analyst for ratings of not-for-profit hospitals and healthcare systems across the United States. Vanessa joined the Healthcare team and Moody’s in 2022.
Prior to joining Moody’s, Vanessa worked in fundraising and data management in the not-for-profit sector and more recently in state and local government roles in Austin, TX.
Vanessa earned her Master of Public Affairs from the University of Texas at Austin in 2022 and her B.A. from American University in 2015.