A sign was posted at a grocery store in California advising that electronic food assistance benefit transfer cards were accepted. Upcoming changes to the federal food stamp program could cost states billions of dollars, raising concerns that more Americans will lose access to the nation’s largest food assistance program. (Photo: Justin Sullivan/Getty Images)
Upcoming changes to funding for the federal food stamp program could cost states billions of dollars, increasing concerns that more Americans will lose access to the nation’s largest food assistance program.
Last year’s One Big Beautiful Bill Act made major changes to the Supplemental Nutrition Assistance Program, or SNAP, including modern eligibility and work requirements. Already over 4 million Americans lost SNAP benefits, putting more pressure on food banks and food pantries across the country.
But starting in fall 2027, states must start funding some SNAP benefits themselves for the first time. Analyzes of newly released U.S. Department of Agriculture data show states could pay more than $9 billion. Some states, county officials and advocates fear it will remove more Americans from the safety net program and even force some states to consider withdrawing from SNAP altogether.
The modern law will penalize states based on their rate of payment errors – a technical federal calculation for SNAP overpayments and underpayments, not fraud. States with payment error rates above 6% will have to fund between 5% and 15% of their benefit payments. Previously, the feds provided assistance.
USDA’s latest analysis shows error rates improved slightly across states in fiscal year 2025, but officials said states still earned a total of $10.1 billion in incorrect payments.
“These payment error rates are further evidence that SNAP seriously lacks state accountability,” Agriculture Secretary Brooke Rollins said in a June news release.
In the fall of 2027, as many as 36 states will face modern cost-sharing requirements. According to the left-wing daily, almost half of them will pay at least $100 million a year. Center for Budget and Policy Priorities.
In Michigan, for example, the center estimates that current error rates could cost the state $300 million a year. Texas could pay an estimated $725 million, and New York would have to spend more than $1 billion.
“States are going to have to make some really painful decisions because they have to balance their budgets in terms of how to cover these costs, and if they can’t fully cover the required cost-sharing requirement, either through revenue increases or cuts elsewhere in the budget,” said Katie Bergh, senior policy analyst at the center.
The change increases concerns that states will sluggish down approval of benefits, restrict access or even abandon the program altogether, Bergh said. While advocates and some officials have unsuccessfully urged Congress to roll back the SNAP changes, many are now asking for at least a delay in implementation to give states time to reduce payment error rates.
After the USDA released modern data last month, New Jersey Human Services Commissioner Stephen Cha said the error rate measurement was “fundamentally flawed.” Although the state has significantly reduced its error rate from 14.33% to 6.86%, it still faces an estimated $100 million in liabilities.
Cha echoed previous calls for Congress and the Trump administration to eliminate or delay the changes.
“Punishing states will do nothing to improve payment accuracy or significantly address waste, fraud or abuse,” Cha said statement. “Instead, they impose significant financial and administrative burdens on state and county governments, threatening our ability to effectively administer SNAP and meet the critical needs of families across New Jersey.”
In a statement to Stateline, a USDA spokesperson noted that states have had decades to correct the situation regarding erroneous payments. “Perhaps now countries will stop spending other people’s money so recklessly,” the statement said.
Looming budgetary pressures
In 10 states – California, Colorado, Minnesota, New Jersey, New York, North Carolina, North Dakota, Ohio, Virginia and Wisconsin – counties administer SNAP.
The National Association of Counties said changing costs would not only threaten access to food, but could limit counties’ ability to fund public safety, emergency management and infrastructure needs.
“These cost changes threaten to destabilize county budgets, forcing staff reductions and delaying essential nutritional assistance for vulnerable residents,” association CEO Matthew Chase he said in the letter last year to Congress leaders.
The National Conference of State Legislatures, which represents lawmakers and legislative staff, said states are committed to administering SNAP benefits accurately and to being held accountable for their results. However, in a statement, the organization said the latest USDA data “makes clear that additional time is needed” to implement significant improvements.
State efforts to improve payment accuracy also come with significant tradeoffs.
This spring, the Urban Institute and the American Association of Human Services conducted a survey of all SNAP agencies across the country. Thirty-nine states responded to the survey, representing a 78% response rate.
The study showed that SNAP administrators are investing in staff, technology and automation to comply with federal law. However, many states are turning away from efforts to improve timeliness and may have to reduce staff and benefits to meet requirements.
In the survey, 29% of states saw narrowing eligibility policies as a potential risk, and 11% saw wholesale SNAP rollbacks as a potential risk.
Oklahoma Gov. Kevin Stitt, a Republican, said churches, food banks and other organizations would keep people fed.
Stitt, chairman of the nonpartisan National Governors Association, said he believes federal programs like SNAP are run on “a lot of fraud and abuse.” He also suggested that the program had become too fluid, with credit card-like cards allowing recipients to easily shop for groceries.
“Maybe it goes back to the days when it was a little bit stigmatized and you had to go to the food bank and buy cheese and other foods, and it was a little bit stigmatized, so it was a little bit embarrassing,” he told Stateline. “Maybe we should go back to that a little bit, instead of making it easier….”
“No one will go hungry in Oklahoma,” he said. “…I can assure you that people were eating, getting married, and graduating from high school before we even had something called SNAP benefits.”
Error level
The federal focus on error rates encourages states to sluggish or completely stop benefits in some cases, said Gina Plata-Nino, SNAP director at the Food Research & Action Center, a nonprofit that works to fight hunger.
That’s because states face no penalty for wrongfully denying benefits, she said, only for paying too much or too little in benefits. The indicator, calculated on a random sample of households, sums up the number of overpayments and underpayments. States could still be penalized for overpayments that they later recover from recipients.
Missouri Could Lose $150 Million in Food Benefits Due to Error Rate
“There is no oversight of people who qualify who have been cut off,” Plata-Nino said.
In Massachusetts, nearly 175,000 people lost their SNAP benefits between July of last year and May of this year. The reason is staff shortages in the Department of Transitional Assistance thousands of incoming phone calls for residents to go off the grid, according to the Massachusetts Law Reform Institute, a center that focuses on poverty law and policy.
The organization has pushed to hire more social workers, even though last week’s legislative budget proposal would have cut $26 million from existing operations, said Victoria Negus, a senior advocate for economic justice at the institute.
“What’s happening is a version of what I call ‘you can’t see the forest for the payment error rate trees,’” she said. “They have created a system that forces states to try to reach a number that is almost impossible for them to achieve without completely decimating access to SNAP, because it takes time to methodically and carefully reduce payment error rates.”
Officials in Alabama said the state continues to prioritize staff training, automation and other changes to reduce the state’s error rate. The current error rate of 9.52% could cost the state an estimated $170 million.
Tennessee taxpayers may have to pay some SNAP costs if the state’s error rate does not improve
The Alabama Legislature has allocated nearly $150 million for the SNAP program. But state Sen. Greg Albritton, the Republican who heads the budget committee, said Alabama reflector in April that the funds would not be released unless the state reduced the error rate to 6% or developed another plan to cover the costs of federal cuts.
Kathryn Shoupe, spokeswoman for the Alabama Department of Human Resources, noted that federal data may be more than a year aged. She also emphasized that this is not evidence of fraud, but usually unintentional reporting errors on the part of recipients.
LaTrell Clifford Wood, a hunger policy advocate at the anti-poverty nonprofit Alabama Arise, said the state needs hundreds of additional employees to fully meet demand. She noted that in Alabama, more than 52,000 people have already lost their SNAP benefits. She said focusing on the error rate amid rising grocery prices will force hard budget decisions that could impact other parts of the state budget, such as education.
“This is an indicator fraught with moral ambiguity,” she said. “We put pressure on people with paper.”
Stateline reporter Kevin Hardy can be reached at: khardy@stateline.org.
This story was originally produced by state linewhich is part of States Newsroom, a nonprofit news network that includes the Ohio Capital Journal and is supported by grants and a coalition of donors as a 501c(3) public charity.
