Alabama nonprofits and dozens of other state entities say that President Donald Trump’s recently released tax plan could jeopardize billions of dollars the state receives in federal assistance each year.

In addition to ending taxes on tips and Social Security benefits, Trump is also vouching for a plan to renew his 2017 tax cut bill, according to multiple reports from White House officials.

Some of the Tax Cuts and Jobs Act’s (TCJA) key changes included reducing the corporate tax rate from 35% to 21%, adjusting individual income tax brackets with a top rate decrease from 39.6% to 37%, nearly doubling the standard deduction, and capping state and local tax deductions at $10,000.

In a recent letter to the Alabama congressional delegation, public policy nonprofit Alabama Arise and 55 other partner organizations urged lawmakers to reject the renewal.

“The Tax Cuts and Jobs Act…increased federal deficits by nearly $2 trillion while lavishing tax cuts on the country’s wealthiest households,” the letter reads.

“Many TCJA provisions are set to expire this year, including numerous provisions that disproportionately benefit wealthy people.”

“If Congress decides to give new corporate tax cuts and extend other provisions of the TCJA, the Committee for a Responsible Federal Budget says it would increase deficits by about $7.5 trillion over 10 years,” the letter continues.

“We also know that the Administration’s tax plan favors the rich. The Institute on Taxation and Economic Policy found that it would lead ‘to a tax cut for the richest 5 percent of Americans and a tax increase for the other 95 percent of Americans.’”

As the nation’s seventh-highest beneficiary of federal funds, according to the Rockefeller Institute of Government, Alabama would see a greater impact from subsequential budget cuts than many other states.

“To offset the cost of these tax giveaways, Congress would have to slash funding in other areas,” Hyden wrote.

“And many of those proposed service cuts would make life worse for Alabamians who struggle to make ends meet.”

In 2024, Alabama received more than $14.5 billion in federal funds, according to the Federal Funds Information for States database.

A few examples, provided by Alabama Arise, include:

• $8.1 billion for health and human services, including Medicaid, the Children’s Health Insurance Program (known as ALL Kids in Alabama), Head Start, childcare subsidies, child welfare and child protective services, HIV/AIDS prevention, opioid and substance use disorder treatment programs, and supportive services for older adults and people with disabilities.
• $2.86 billion for nutrition and agriculture programs, including the Supplemental Nutrition Assistance Program (SNAP), the Special Supplemental Nutrition Program for Women, Infants and Children (WIC), school meal programs, emergency food assistance, cooperative extension services and agricultural research.
• $1.4 billion for transportation, including funds for highways, railways, airports and bridges.
• $1.35 billion for education, including Title I programs, Pell Grants, special education programs and 21st Century Community Learning Centers.
• $142.1 million for environmental protection, including grants to support clean water, clean air, pesticide management and enforcement of hazardous waste disposal.
• $92.4 million for the Tennessee Valley Authority.
• $82 million for workforce development programs, including jobs programs for veterans, unemployment insurance and Workforce Innovation and Opportunity Act (WIOA) programs.
• $23.8 million for Department of Justice programs, including sexual assault investigations, supports for crime victims and programs to prevent violence against women.

“As many as 1 in 5 Alabamians enrolled in Medicaid could lose their health coverage due to cuts and onerous work reporting requirements,” Hyden wrote.

“Many more people could see food assistance reduced or eliminated. Other potential targets for cuts include school meals, the Child Tax Credit and tax credits for Affordable Care Act coverage.”

Several members of the House say they are looking to kickstart budget votes within the next week or so, according to NBC News.