SC may have to come up with $100M or more for food assistance under federal GOP proposal

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2 days ago

SC could face costs upwards of $100 million annually under proposed changes to the country's largest federal food assistance program. (File photo by Getty Images)
Continuing to provide grocery assistance to more than half a million South Carolinians could cost the state upwards of $100 million annually under proposed changes to the federal program.
For the last half-century, the federal government has fully funded benefits provided through the Supplemental Nutrition Assistance Program, also known as food stamps. But Republicans' massive bill on taxes and spending, as passed by the U.S. House, would require states to pay a portion of those benefits starting in 2028, plus a greater share of what it costs to administer the program.
While the U.S. Senate is likely to make changes to what's dubbed the 'big, beautiful bill,' advocates worry about major cuts to the 61-year program and what that would mean to the families who rely on it.
U.S. House Republican plan would force states to pay for a portion of SNAP benefits
'I can't imagine the state is even closely prepared for all this,' said Sue Berkowitz, director of the Appleseed Legal Justice Center.
If the House plan holds, the Palmetto State's total cost could triple, or in the worst-case scenario, increase elevenfold to $370 million.
That's because it bases states' share of the cost on how well they distribute benefits correctly: States with an error rate of 6% or less would be responsible for paying 5%. Those with an error rate higher than 10% would have to pay one-quarter of the cost.
And the latest data puts South Carolina in the latter category. In 2023, the state's error rate was a whopping 22.6%, the fourth-worst in the nation, overwhelmingly due to overpayments.
State officials say that's an anomaly.
Prior to the coronavirus pandemic, South Carolina's error rate was historically in the lowest category. That changed in 2022, when the state's error rate went to 9% amid changes to the SNAP program during the global pandemic. Then it shot up in 2023.
After a re-training of staff, the state Department of Social Services expects a big drop in the 2024 error rate, which should be released next month.
The chief budget writer of the South Carolina House said the state has the money to continue the program, as long as the error rate returns to pre-pandemic levels. Ways and Means Chairman Bruce Bannister pointed to hefty surpluses in tax collections in recent years as an example of the state's fiscal health.
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The budget that takes effect July 1 includes $1.2 billion placed in reserves. About $500 million more is unspent and available following an update in revenue estimates last month.
The question is whether funding for the food program will stand up against other budget priorities in the years to come, said Bannister, R-Greenville.
Rep. Bill Herbkersman was less certain of South Carolina's ability to pay.
The Bluffton Republican chaired the subcommittee that oversees the budget for South Carolina's child welfare and social services agency for many years. He does not think the state can guarantee it will have the funding every year to keep the program going on a recurring basis.
In total, the federal government provides South Carolinians $1.3 billion in annual benefits for groceries, according to the latest figures.
The U.S. Department of Agriculture, which heads the SNAP program, and the state split the $66 million bill for administrative costs.
What frustrates Herbkersman the most are the overhead costs just to operate the program — three-quarters of which South Carolina will have to pay under the proposed changes.
'As a taxpayer, I'm incensed by that,' he said.
As for payment errors, those can occur from miscalculations in a household's expenses and families struggling to provide the necessary documents updating their income in the case of a job change or loss, according to the USDA.
According to state officials, the federal government calculates the error rate by checking a small sample of beneficiaries.
DSS also has struggled to process applications for benefits within the 30-day window allowed under federal regulations. The USDA put the state on notice last year, both for timeliness and for not properly informing people of denied benefits.
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To address that, DSS started making much-needed upgrades to its technology. The agency has set aside about half of the $74 million it needs to replace equipment that's as much as five decades old.
Those upgrades 'will significantly improve the state's ability to process applications in a timely manner,' according to an agency statement.
But the fundamental issue is a rise in the need, according to DSS.
South Carolina, like many other states, has seen the weekly application volume for SNAP benefits rise substantially — 7,000 applications for benefits each week on average, a nearly 50% increase over pre-COVID numbers.
As of last September, one in nine South Carolinians were receiving SNAP benefits. More than half went to families with children, while more than one-third went to families with an elderly or disabled adult, according to the left-leaning Center on Budget and Policy Priorities.
Lee Patterson has seen that firsthand as Richland County Library's social work director who helps people fill out applications. She's not sure why more people are applying for aid, but she suspects it's closely tied to the rising cost of housing.
'The first bill people usually pay is the rent,' she said. 'When the price of housing goes up, then the ability to pay for food goes down.'
Applicants who aren't elderly or disabled can deduct only $672 from their income when calculating whether they qualify for food benefits. Meanwhile, the median cost of rent and utilities in South Carolina is nearly double that, according to U.S. Census data.
Patterson and her team have the experience to help smooth the way for people seeking aid. But for those applying on their own, especially for the first time, it can be tricky.
For example, when it comes to proving income changes, applicants often have to go back to a former employer and ask for documentation that shows they no longer work for that company. Those employers don't always respond, and in some cases may have closed entirely, Patterson said.
A second pain point for applicants can be waiting for a phone interview with DSS staff, which the federal government requires for benefits. South Carolina was allowed to waive those interviews during the pandemic, likely contributing to the state's increased error rate, but they resumed in July 2023.
The call volume for these interviews is often high, and it's not uncommon for an applicant to wait on hold for an hour. The library has a phone available for applicants to use. If they don't get through, they may have to return multiple days in a row to complete their interview, Patterson said.
Advocates expect changes to the U.S. House proposal, as several key Republicans in the Senate have publicly opposed shifting food benefit costs to states. Negotiations are expected to continue into next week, Politico reported, with the goal of passing the bill by July 4.
The final plan remains to be seen.
The executive director of Foodshare South Carolina is concerned about what might ultimately happen to other SNAP-related programs.
Omme-Salma Rahemtullah said she relies heavily on the state-funded program known as Healthy Bucks, which provides additional money for SNAP recipients to purchase fruits and vegetables. They can use these benefits at farmers markets. Or they can get a box of produce worth $20 from Foodshare.
Rahemtullah worries that if the state has to spend more on general SNAP benefits, there may be less available to keep Healthy Bucks operating.
Healthy Bucks began as a pilot in six counties in 2014. It's since expanded to all 46 counties, according to the state Department of Social Services. In 2023, the Legislature provided an additional $5 million to the agency to further expand the program.
Beyond upping the cost to states, the federal proposal also expands requirements for SNAP recipients.
Under existing rules, people under 55 who can work — what the government calls 'able-bodied adults' — are limited to three months of food benefits over a three-year period unless they can prove they work, volunteer or attend job training at least 80 hours each month, according to the U.S. Department of Agriculture.
The proposal would expand those rules by a decade — to people under 65 and, for parents of school-age children, they would be exempt if their children are younger than 8, rather than 18.
'As less money comes into the state from the federal level, the state will have to find ways to make that up for a lot of things,' said Berkowitz, the Appleseed advocate. 'I just hope feeding people will be a priority.'