States Face SNAP Funding Shift
Dozens of States May Face SNAP Aid Costs by 2027 Due to High Error Rates
Dozens of U.S. states could soon face massive new costs for a food aid program that the federal government has fully funded for 60 years. USDA released data on June 24, 2026, showing the national payment error rate for SNAP — the Supplemental Nutrition Assistance Program — stands at 10.62%, representing about $10.1 billion in improper payments.
Under the One Big Beautiful Bill Act signed in July 2025, states with SNAP error rates of 6% or higher will have to pay a share of benefit costs starting October 2027. That threshold covers the vast majority of states. Only nine, including South Dakota, are currently safe.
Nine States Escape Penalties While Dozens Face the Bill
South Dakota leads the nation with a 2.47% error rate — the lowest in the country. Eight other states also fall below the 6% cutoff: Idaho (3.85%), Wyoming (3.96%), Kentucky (4.7%), Iowa (5.34%), Nevada, Utah, Vermont, and Wisconsin. These states pay nothing extra. Matt Althoff, South Dakota's Cabinet Secretary for Social Services, said, "It's vital that we ensure participants get the benefit amounts they are entitled to, while also prioritizing the efficient use of taxpayer dollars."
On the other end, Alaska's error rate is 23.15% — the worst in the nation. The District of Columbia sits at 18.66%, New Mexico at 16.81%, Delaware at 16.0%, and Georgia at 15.21%. States above the threshold could be required to cover between 5% and 15% of actual benefit costs. For California, that bill could reach $1.8 billion per year.
What the Error Rate Actually Measures — It Is Not Fraud
The SNAP error rate is not a fraud rate. It tracks how much money was paid above or below what families should have received. That includes underpayments — where families got less than they deserved — and overpayments caused by administrative mistakes. Cindy Long, the USDA's Food and Nutrition Service Administrator, noted that errors come from "administrative complexity or routine changes in household circumstances," not intentional cheating.
Before the COVID-19 pandemic, the national error rate hovered around 7.3%. Quality control reviews were suspended during the pandemic, and staffing shortages made things worse. Many states still run on 30-year-old computer systems that struggle to keep up with eligibility changes. Advocates argue that tying funding penalties to this metric punishes states for systemic failures they cannot easily fix.
States Cut Benefits Early to Dodge Future Penalties
States are already reacting — and low-income families are paying the price. A 2026 survey by the American Public Human Services Association found that more than 25% of state agencies are considering narrowing who qualifies for SNAP to avoid error penalties. Four states are reportedly weighing whether to leave the program entirely rather than absorb the new costs.
The Center on Budget and Policy Priorities estimates that 770,000 children have already lost benefits as states tighten their application rules. Nationwide, SNAP enrollment dropped by 4.3 million people between February 2025 and February 2026. Senior policy analyst Katie Bergh said children are becoming "collateral damage" as states scramble to lower their error numbers.
A 2027 Deadline That Could Reshape Food Aid Forever
The first major cost shift hits October 1, 2026, when states must begin covering 75% of SNAP administrative costs — up from 50%. That alone is a serious budget hit. But the bigger cliff comes October 1, 2027, when benefit cost-sharing kicks in. North Carolina, for example, faces a projected $440 million annual liability if it cannot get its error rate below 6%.
Agriculture Secretary Brooke Rollins defended the new rules. "These payment error rates are further proof that state accountability is severely lacking in SNAP," she said on June 24. "I hope states prioritize needy families and the American taxpayer over politics." States with the worst rates — above 13.34% — have until 2029 or 2030 to comply under a special provision. But for most, the clock is already running.
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