States to Assume Majority of SNAP Administrative Costs Under New Funding Rule
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A new federal rule will shift 75% of SNAP's operational expenses to states, cutting federal spending by $3.4 billion annually, while states face additional budget pressures.
Effective Thursday, the federal government will reduce its share of the Supplemental Nutrition Assistance Program’s (SNAP) administrative costs, requiring states to cover three-quarters of expenses such as staffing and training. The change is projected to lower federal outlays by $16.9 billion over five years, or about $3.4 billion each year.
The Food Research & Action Center estimates that states may need to allocate between $3 million and $670 million to replace the lost federal funding for administrative functions, with California, New York, Pennsylvania, Texas and Michigan likely to feel the greatest impact. Some states have already begun adjusting budgets, but further cuts may be necessary as additional funding reforms are expected.
Starting in October 2027, states whose SNAP error rates—measuring over- and under-payments—reach 6% or higher could be required to fund a portion of the food benefits themselves. The Center on Budget and Policy Priorities projects that nearly half of the states could each incur $100 million or more in new costs, and that California and New York could face liabilities exceeding $1 billion if error rates are not reduced.
"And we may see some states decide that they need to withdraw from the program entirely," said Katie Bergh, senior policy analyst at the Center on Budget and Policy Priorities.
Bergh added that the previous funding model helped ensure benefit access in poorer states or those with smaller tax bases. The changes stem from the One Big Beautiful Bill Act, enacted in July 2025, which also introduced stricter work requirements and limited eligibility for a small group of non-citizens. Since the law’s passage, SNAP enrollment has fallen from 42 million to 36 million as of June.
The U.S. Department of Agriculture, which oversees SNAP, has not responded to requests for comment.