Money Watch•2 MIN READ

States Are About to Get the Bill for SNAP. Some Are Warning They Cannot Pay It Without Cutting Benefits.

Ryan Ellis

Updated Jun 29, 2026

For the first time in more than 60 years, states will be required to share in the cost of SNAP food benefits - not just administration. The phase-in begins in federal fiscal year 2028. State legislators are already running the numbers, and some don’t like what they see.

What You Should Know

The OBBBA restructured SNAP funding to require states to cover a portion of benefit costs beginning in FY2028, based on their payment error rates. States with error rates of 6 percent or higher must pay part of their SNAP benefits - up to 15 percent if their rate exceeds a formula threshold. The national average payment error rate in SNAP was 11 percent in fiscal year 2024, meaning most states currently exceed the threshold.

One study estimates states’ collective new SNAP costs could rise to $15 billion annually once provisions are fully phased in. The new cost-sharing requirement arrives as state budgets are already strained by $900 billion in Medicaid cuts from the same law.

The Money Trail

Beginning in October 2026, states also face an additional 25 percent increase in administrative cost responsibilities. States that opt to reduce SNAP eligibility or benefits to limit their financial exposure could push more households toward food banks - shifting federal costs to state and local governments rather than eliminating them.

Pew Charitable Trusts identified this as one of the most consequential state fiscal debates of 2026. States face a probable chorus of appeals from human services agencies seeking additional funds, from food banks asking for replacement grants, and from retailers hit by declining SNAP spending.

The Receipts

Pew Charitable Trusts confirmed the cost-sharing structure and timeline in January 2026. USDA confirmed the 11 percent national error rate. CRS/Congress.gov confirmed the CBO estimates on the provision.

What Happens Next

State legislative sessions will determine whether to invest in technology and staffing to reduce error rates, accept higher cost-sharing, or reduce SNAP enrollment and benefit levels. The decisions made over the next two years will determine how many residents lose access to food assistance as the deadlines arrive.

References: Pew | Numerator | Congress.gov