https://www.cityandstateny.com/policy/2025/10/state-lawmaker...
(it's a really interesting situation since I think I read somewhere that the reason federal income taxes are directly remitted to the federal government today, is specifically to disallow this kind of state retaliation)
Where did you get that idea? That's never been true. You may just have been hoodwinked by their "Two Santas" strategy.
Republicans have been explicitly playing that game as promoted by Jude Wanninski[1] since the late 1970s, and it's been loudly touted as quite successful by Republicans.
The idea is to cut taxes and spend like drunken sailors when Republicans are in power, then cry poverty and austerity when Democrats are in power, loudly calling for incredibly popular Democratic programs to be slashed.
I'm not making this up. See the links below. It's not like this has been a secret for the past fifty years or anything.
[0] https://www.milwaukeeindependent.com/featured/two-santas-str...
The federal government will begin funding what were formerly federal programs...?
They will begin because they have presently stopped, and because it places additional taxation burden on blue states if they first allow the states to try to pick up their own slack, because generally only the blue states (Texas being the major possible exception) will be able to do so.
This results in the federal government taking care of their base and their opposition subsidizing this support for their base.