As SNAP Changes Shift Food Assistance Costs, States Face New Choices
State fiscal debates to watch in 2026
This is one in a series of five articles examining key debates that will unfold in the nation’s statehouses in the year ahead.
State legislators will grapple with familiar budget questions in 2026 about health care and tax policy, but they’ll also have to confront a relatively new challenge: how to pay for the nation’s largest anti-hunger program.
The Supplemental Nutrition Assistance Program (SNAP) provides monthly food stipends for nearly 42 million low-income Americans. For decades, SNAP has been basically the same: States run it and pay half the administrative costs, while the federal government covers the other half and provides 100% of the monthly benefits. But the 2025 federal reconciliation law sought a major rebalancing of fiscal responsibility among levels of government, including new SNAP provisions that will push billions of dollars in costs, previously incurred at the federal level, onto states.
Beginning in October 2026, states will pay an additional 25% of the administrative expenses, with more significant cost shifts scheduled for the following years. It’s the biggest structural change to SNAP since President Lyndon B. Johnson signed the program into law more than 60 years ago. One study estimates that states’ collective SNAP costs could rise to $15 billion annually once the provisions are fully phased in. Meanwhile, new eligibility rules are expected to decrease SNAP enrollment, which could increase demand at food pantries, but the federal law also eliminated a program that helped food banks.
As legislative sessions kick off this year, lawmakers are in for a crash course on their state’s SNAP programs and how benefits are determined. They can also expect to face a probable chorus of appeals from state human services agencies seeking additional funds to handle the increased workload, from food banks asking for replacement grants, and even from retailers hit by potentially lower food sales.
“Education is absolutely going to be needed—and quickly, given the time frame,” said Lauren Kallins, senior legislative director for state-federal affairs at the National Conference of State Legislatures, which has hosted several webinars for legislators. “Most of our members likely have some familiarity with SNAP, but the federal changes are going to require an in-depth understanding of payment error rates and the quality control process.”
At a time when revenue is flattening and pandemic-era surpluses are gone, the new SNAP funding requirements may spark one of the most consequential state fiscal debates in 2026: how much to invest now in technology and staffing—and what those choices could cost years later.
More work, less funding, and little time
State agencies and budget offices have quickly coalesced around a top priority: reducing SNAP payment error rates—the share of SNAP benefits paid that either exceeds or falls short of a recipient’s allotted aid. Beginning in October 2027 (federal fiscal year 2028), any states with rates of 6% or higher will have to pay a portion of SNAP benefits, with each state’s share determined on a sliding scale by error rate. States with rates of 10% or higher will pay the maximum 15%, but those exceeding a formula-based threshold will have the option to delay implementation for up to two years.
States conduct monthly reviews of select cases to track errors and make adjustments. The U.S. Department of Agriculture’s Food and Nutrition Service reviews a subset of those cases each October and typically publishes state and national error rates the following June. Because of the lag in this publishing schedule, states’ required payments will be based on rates from three years prior, though in the first year, states can opt to apply their rates from 2025 instead of 2026.
Most errors are the result of a misunderstanding or oversight, and states can only control so much, said Chloe Green, assistant director of policy at the American Public Human Services Association. A recipient might report the total monthly rent for her apartment rather than the share she pays after splitting with a roommate, which affects the take-home income calculation that determines her benefit amount. A college student might forget to report that he went home during the summer months, which affects his household composition—another benefit measurement.
“SNAP is calculated so precisely—unlike any other benefits I’m familiar with,” Green said. Most states have adopted at least one federally approved eligibility modification, such as a streamlined application process or a work requirement waiver. These changes increase access and decrease staff burden by requiring less frequent paperwork, but they also mean a change in any given month to a household’s configuration or income might go undetected for longer.
“States assume some level of risk when they take on a flexibility … knowing that it might increase payment error,” Green said. “And states are going to now be more risk-averse than ever.”
The stakes are high. For example, an analysis from Maryland estimates that the state will pay around $58 million more annually just to administer SNAP—but that’s only a fraction of the potential $240 million in yearly benefit payments the state will need to start making by the end of the decade unless it can reduce its error rate. Even in states with lower error rates, the bills will escalate significantly: Iowa’s projected benefits share is double its administrative cost increase. Only eight states—Idaho, Nebraska, Nevada, South Dakota, Utah, Vermont, Wisconsin, and Wyoming—had error rates below 6% in 2024, but lawmakers won’t get confirmation on their 2025 rate until most legislative sessions are well underway this year. Data from Utah’s legislative office, for example, indicates that an increase in its error rate of even 0.26% could cost the state an additional $20 million in annual benefits payments.
In addition to these challenges, states will need to contend with changes to benefits and eligibility requirements that will complicate payment accuracy going forward. The federal reconciliation law expanded work requirements to adults ages 55 to 64 and parents of children over 14, and removed exemptions for homeless individuals, veterans, and former foster care youth. It also limits who can use a standard deduction for utilities when calculating their income for SNAP benefits. In short, more recipients will need to provide more information more often. Washington’s Department of Social and Health Services cautioned that these policy changes “will increase the complexity of eligibility work, likely leading to more errors and a higher [payment error rate].”
Moreover, states were given just a few months to comply with the new rules and start requiring more documentation—such as pay stubs and utility bills—from the thousands of affected residents in each state. Policymakers say that’s not enough time. Eligibility systems are typically integrated with dozens of other public assistance programs, and the software development cycle alone can take months of coding and testing. In Ohio, one of 10 states where counties administer SNAP, Franklin County Health and Human Services Deputy Administrator Joy Bivens said complying with the new rules in the time allotted would probably mean that staff will be reviewing verification documentation by hand until their system could accommodate the new requirements.
“That additional administrative task,” Bivens said, “can create bottlenecks and longer wait times.”
Rhode Island Budget Director Brian Daniels said that while he does see the logic in more closely aligning state and federal responsibilities so that states “have more skin in the game … It’s the timeline that’s a challenge because being able to make all those changes in short order is incredibly hard.”
Tech and talent
In their race to increase accuracy, state human services agencies are planning initiatives that will require state funding beyond just replacing the lost federal funds. Arizona, New Mexico, Oregon, and Washington are among the states eyeing new teams devoted to quality control and identifying systemic issues. Rhode Island hired a consultant to analyze and recommend ways to reduce its error rate. Agencies are also stepping up staff training and prioritizing technology improvements.
The message to lawmakers is that money spent on technology, staffing, and data systems today could save tens or hundreds of millions of dollars later.
“Without funding this team, there are no dedicated resources explicitly focused on [reducing the error rate],” Washington’s Department of Social and Health Services warned in its $1.7 million request for additional staff. “The state will be less equipped to manage policy changes, prevent costly errors, or meet federal compliance standards, making this proposal a critical investment in program integrity and fiscal responsibility.”
Arizona’s Department of Economic Security estimates that hiring contactors and implementing system changes to comply with the new federal rules will cost more than $26 million in ongoing funding (in addition to the administrative cost increase) and that “program operations will be disrupted and potentially not be possible at all if these costs are not funded with state dollars.”
But as with most investments, the payoff will be years down the road. Hiring staff, training them on the new requirements and common documentation errors, and conducting outreach to recipients all take time.
“Even if you make process improvements now, you’re not necessarily going to see the benefits for a while—even though we’re all hands on deck trying to reduce our error rate,” said Rhode Island’s Daniels.
Substantial technology upgrades also operate on years-long timelines. Florida’s $205 million ACCESS modernization project, for instance, which began in 2022 with the replacement of the state’s 30-year-old eligibility mainframe, now includes mobile capabilities and automatic case processing. Early results suggest improved staff productivity and document management, and Florida officials argue that automation investments translate into fiscal savings. But others say automation adds barriers between caseworkers and recipients, especially in times of high demand.
Florida state Senator LaVon Bracy Davis (D) said that’s what happened in 2024 when Medicaid enrollees lost coverage after federal pandemic-era protections ended and then struggled to regain access to the program. “I had so many constituents call me and tell me that nobody’s answering the phone, that they’re on hold for four hours,” Davis said. She’s concerned about more upheaval, given that the state’s Department of Children and Families has previously indicated that changes in federal policy or administrative rules could pose risks to the project’s costs and timeline.
“Every delay,” she added, “has real consequences.”
Food insecurity expected to rise
Davis’ fears are echoed by others throughout the country who warn that eligible families may lose access to their food benefits.
“With automated processes,” said Derek Wu, a University of Virginia assistant professor who studies safety net programs, “you might reduce potential fraud, but you will also reduce the ability for people who really need SNAP to get benefits.”
In fact, the Congressional Budget Office estimated that the new requirements will reduce SNAP participation by roughly 2.4 million people in an average month. State administrators are aware of the trade-off. Maryland’s analysis, for instance, warned that the new rules could reduce benefits for nearly 119,000 households and increase food insecurity statewide. It further noted that 21% of the state’s SNAP households leave the program only to reapply within four months—often because of paperwork or recertification issues.
Food banks are ill-equipped to make up the gap. And unless states step in to help, they will have even fewer resources going forward because the federal law eliminated the SNAP-Ed program, which provided more than $520 million annually in state-administered grants to organizations that often partnered with food banks. The Pennsylvania Department of Human Services’ data dashboard estimates that more than 140,000 Pennsylvanians will lose access to SNAP, which provides nine meals for every one provided by the state’s food bank network.
“While our charitable food network is a vital part of ensuring that Pennsylvanians have access to healthy food, this network cannot replace the benefit to the state from SNAP,” the dashboard website notes.
The economic implications of rising food insecurity ripple outward. In places where significant numbers of residents rely on SNAP, even small reductions in participation can meaningfully affect local retail sales. For instance, New Mexico, where 1 in 5 residents relies on SNAP, estimates that the $1.2 billion in benefits residents receive generate $1.8 billion in economic activity and supports nearly 18,000 jobs.
Gina Plata-Nino, SNAP director for the Food Research & Action Center, pointed to potentially higher rates of eviction and homelessness if former program recipients are forced to choose between paying for food or rent. Her organization is working with partners across the states to bring this message to lawmakers.
“We’re really trying to provide a whole picture of the ecosystem that SNAP has, the fiscal implications of these cuts, and what the options are in terms of innovative revenue increases that can support this work,” Plata-Nino said.
Legislative balancing act
State lawmakers, however, will be weighing these spending decisions and their ramifications amid a bevy of budget complexities created by a more constrained fiscal picture and new federal policies. Last year’s budgeting season was one of the most difficult in recent memory because of slowing revenue growth, and several legislatures went into overtime before reaching budget deals.
In the short term, states can turn to rainy day funds and whatever remains of their pandemic era surpluses—but the long-term challenges remain. Daniels, for instance, estimated that Rhode Island’s new SNAP costs could ultimately add more than $60 million to the state’s $300 million structural deficit. Massachusetts Governor Maura Healey (D) vetoed $130 million in spending last year from the current fiscal year’s budget and has filed a supplemental bill that adds a flexible $100 million reserve to respond to federal actions.
And state human services agencies are contending not only with increased scrutiny but also with capacity constraints that have lingered since the pandemic, which exposed big gaps in their staffing capacity and system adaptability. One survey found that, despite receiving pandemic recovery funding, many of these agencies were unable to invest in long-term improvements because of the limited window to spend federal aid.
“Technology is a huge upfront cost and states have struggled with that before,” said Green. “So that is one opportunity here—that agencies may very well get some money to do things they've been wanting to do for a while.”
An opportunity, perhaps, because the price of waiting has become much more expensive.
Liz Farmer works on The Pew Charitable Trusts’ Fiscal 50 project.
People
