States would struggle to administer food stamp benefits under Republican tax bill

Zawya

2 days ago

U.S. states will not be able to fully administer food stamp benefits for millions of the nation's poor if a proposal in the Republican tax bill forcing them to shoulder billions of dollars in new costs is signed into law, according to state officials, local government associations and policy experts.
More than 41 million people receive benefits from the Supplemental Nutrition Assistance Program, the nation's largest food aid program, which cost about $100 billion in 2024. The tax bill passed on May 22 by the U.S. House of Representatives and backed by President Donald Trump would shift some $22 billion in administrative and benefit costs to state and local governments, according to a Reuters analysis.
Supporters of the move say it will promote accountability and reduce waste in the program. But states fear it will backfire.
"No state is going to be able to simply absorb that," Kentucky Governor Andy Beshear, a Democrat, told Reuters.
Officials from North Carolina, Oregon and Michigan also said their states did not have the resources to easily take on the spending requirements in the proposal, which is now before the Senate.
Some states could be forced to shrink SNAP eligibility or to leave the program altogether, according to letters sent in May to Congressional and agriculture committee leadership from state and county legislatures and health officials.
"Shifting the financial burden of SNAP onto states is fiscally unsustainable and risks harming the very individuals and families the program is designed to support," said one letter from the National Conference of State Legislatures.
Other letters were sent by the National Association of Counties, National Association of County Human Services Administrators and the American Public Human Services Association.
A USDA spokesperson said that Agriculture Secretary Brooke Rollins supports Trump's agenda and that the agency will continue to provide technical assistance to states.
Republicans have long supported reduced spending on SNAP, arguing that the program creates a dependence on federal support and should be more narrowly targeted to the most vulnerable.
Reuters could not reach a representative from the Republican Governors Association or from Texas, Florida or Georgia, the Republican-led states facing the highest SNAP costs.
STATES WOULD STRUGGLE
The House bill would require states for the first time to pay for a portion of SNAP benefits beginning in 2028, with their payment share from 5% to 25% tied to the state's error rate, a USDA measure of how accurately states determine eligibility and benefit levels.
Nationwide, that would amount to more than $20 billion in spending, according to a Reuters analysis of data from the Center on Budget and Policy Priorities and the U.S. Department of Agriculture.
The bill would also require states to immediately pay 75% of the cost of administering the SNAP program, up from their existing 50% obligation, adding another $2 billion to the sum, according to USDA data.
The states facing the most new spending would be California ($3.7 billion), New York ($2.1 billion), Florida ($1.7 billion) and Texas ($1.2 billion).
The state spending requirements would push 1.3 million people off of SNAP in an average month, because some states would modify eligibility requirements or stop administering SNAP, according to a May 22 letter from the Congressional Budget Office to House and Senate agriculture committee leadership.
Michigan does not have the ability to support $850 million in new SNAP spending and may need to restrict eligibility or reduce benefits if the House bill passes, said Elizabeth Hertel, director of the state Department of Health and Human Services.
Oregon would struggle to absorb more than $477 million and the state is planning for what they would do if forced to take on the spending, said Claire Seguin, director of the division of the Oregon Department of Human Services that administers SNAP.
North Carolina is already budget constrained and "there isn't really a way to backfill" more than $650 million in new SNAP spending, said Department of Health and Human Services secretary Dev Sangvai, who did not provide details on what steps the state would take if the provision passes.
New York also cannot absorb its projected costs, Barbara Guinn, Commissioner of the New York State Office of Temporary and Disability Assistance, told Senators during a June 4 forum on the SNAP proposal.
Because most states must balance their budgets and cannot accrue debt to offset new spending like the federal government can, shifting SNAP spending to states risks drawing down resources from other public programs like Medicaid, said Eric Mitchell, president of the Alliance to End Hunger. The bill would also expand work requirements for some SNAP recipients and restrict states' ability to waive those requirements when unemployment ticks up, which together would push another 3.2 million people off of SNAP in an average month, according to the CBO.
(Reporting by Leah Douglas in Washington; Editing by Alistair Bell)