States Could Owe $9 Billion for SNAP as the Error-Rate Cost Shift Nears

New USDA data puts the national SNAP payment error rate at 10.62 percent, and one estimate says states could owe about $9 billion once the One Big Beautiful Bill's cost shift begins in 2027.

States Could Owe $9 Billion for SNAP as the Error-Rate Cost Shift Nears New USDA data puts the national SNAP payment error rate at 10.62 percent, and one estimate says states could owe about $9 billion once the One Big Beautiful Bill's cost shift begins in 2027. Aaron Rafferty July 02, 2026 Key Takeaways New USDA data released in late June puts the national SNAP payment error rate at 10.62 percent for fiscal 2025. Under the One Big Beautiful Bill Act, states with error rates at or above 6 percent will cover 5 to 15 percent of benefit costs, and one estimate puts the total near $9 billion. Only nine states sit below the 6 percent line, and SNAP enrollment has already fallen by 5.5 million people since January 2025. A new federal rule is about to turn feeding low-income families into a line item on state budgets for the first time. Under the One Big Beautiful Bill Act signed last July, states whose SNAP payment error rates sit at or above 6 percent will have to cover 5, 10, or 15 percent of the benefit costs Washington has always paid in full. Fresh USDA data released in late June shows most states are nowhere close to safe. The national payment error rate was 10.62 percent in fiscal 2025, and because the figure counts both overpayments and underpayments, it is not a measure of fraud. Only nine states, among them Iowa, Nebraska, and Wisconsin, came in under 6 percent. The Center on Budget and Policy Priorities estimates states could owe roughly $9 billion once the cost share begins, with nearly half of them facing $100 million or more. The timing leaves a short runway. The benefit cost shift starts in October 2027 for most states, and they can use the lower of their 2025 or 2026 error rate. On top of that, the law raises the share of SNAP administrative costs that sta