States’ First-Ever Bill for SNAP Benefits Could Cost Billions

The 2025 reconciliation law (H.R. 1) made the deepest-ever cuts to food assistance through SNAP, in part by slashing federal funding and imposing those costs onto states. Based on new Department of Agriculture data, our estimates show that states may soon face a collective bill of roughly $9 billion, threatening benefits for millions of SNAP households, 79 percent of which include a child, a senior, or a person with a disability, who count on SNAP to help them meet their basic needs. Without immediate congressional action to delay this cost shift for all states, the unfolding emergency will only worsen as more people lose the SNAP benefits they need to afford groceries.

Already, people in low-income families are losing SNAP despite being eligible, as states have scrambled to reduce the enormous new costs they’ll face. This is driving far deeper reductions in SNAP participation than many anticipated when the law was enacted last July. SNAP participation has already fallen by more than 4 million people between July 2025 and March 2026 — a drop of 10 percent in only eight months, even as unemployment remained flat and grocery costs rose.

Those 4 million people include well over 800,000 children, and also workers in low-paying jobs, seniors, and people with disabilities — people ostensibly not targeted by the reconciliation law’s cuts. Nevertheless, they’re losing food assistance as states increase bureaucratic obstacles, and understaffed state agencies can’t keep up with the additional red tape.

Starting October 1, 2027, most states will be required to pay a portion of benefit costs, between 5 and 15 percent, for the first time in the program’s history. The amount each state must pay in this first year of implementation will depend on the state’s error rate for fiscal year 2025 or 2026. The error rate is a measure of over- and underpayments in SNAP that largely reflect unintentional mistakes, often by program administrators.

Based on USDA’s error rate data for 2025 (and rounded SNAP benefit projections extrapolated from actual SNAP benefit issuance data for the first six months of fiscal year 2026), states would owe roughly $9 billion in total. Almost half of states may owe $100 million or more. (See table.)

This is on top of the increased costs states are facing to administer SNAP, as H.R. 1 cuts federal reimbursement for states’ costs to operate the program in half starting October 1, 2026.

While SNAP participation is expected to continue to fall over the next year as H.R. 1’s cuts continue to take effect, an economic downturn or higher-than-expected food price inflation could increase participation and benefit costs – and how much states will need to pay.

If states can’t fully cover these huge new costs by raising taxes or cutting other services, they’ll need to further restrict access to SNAP or potentially end the program entirely. In a recent survey by the American Public Human Services Association, 11 percent of responding states identified the potential risk that they will withdraw from SNAP as a result of the cost shift, and 5 percent said there’s a risk that they will pause SNAP operations. That would have dire consequences for struggling families — who would face even harder decisions about which essentials to pay for, whether it’s rent or putting food on the table — and the broader economy.

An emergency is unfolding across the country with millions of people losing the help they need to afford groceries, and the harm will only worsen unless Congress acts. With the stakes for low-income families and state budgets so high, Congress should grant all states the same two-year cost-shift delay that some states received under H.R. 1.