Legislative Finance Committee analysts and Human Services officials told a New Mexico legislative committee that the federal reconciliation bill adopted in Washington will change Supplemental Nutrition Assistance Program (SNAP) rules, expand work requirements and reduce certain federal administrative matches, leaving the state with potential new costs starting in the 2026–2029 period.

Austin Davidson, a fiscal analyst with the Legislative Finance Committee, described the bill's provisions that are most likely to affect New Mexico: expanded work requirements for certain age groups, expanded state cost-sharing tied to payment-error rates, and a shift of some federal administrative matching funds from a 50/50 to a 75/25 split in federal favor after October 2026.

Nikki Kozlowski, deputy cabinet secretary at the Human Services Department (HSD), said New Mexico currently serves about 848,000 residents in safety-net programs and roughly 457,000 SNAP participants; HSD's current federal audit error rate is about 14.5 percent, above the 6 percent threshold in the federal bill that determines the state's cost-share obligations. "If our error rate remains where it is now, we could face a significant fiscal obligation," Kozlowski said; LFC projections shown to the committee put the state's potential benefit cost-share in the low hundreds of millions depending on the error-rate band and timing.

Key changes lawmakers should expect: the bill expands mandatory work requirements (raising the age bands and tightening dependent exemptions), phases in state liability for a portion of benefits based on payment-error thresholds, and reduces the federal share of administrative costs (from 50 percent federal to 25 percent after October 2026) — meaning the state would assume a larger share of SNAP administration costs. Davidson and Kozlowski said the new state matching liability might be delayed for states with high error rates, but HSD officials urged immediate investments in staffing, training and IT to reduce error rates before the cost-sharing deadlines.

Why it matters: HSD officials said SNAP dollars circulate locally through grocery stores, farmers markets and convenience stores, and that reductions in federal funding or increases in state match obligations could reduce benefits and have measurable economic effects. Kozlowski told lawmakers that, in pilot counties where new work rules were tried this year, there was about a 40% drop in continued eligibility among those subject to the new requirements.

Next steps: LFC recommended treating any state requests to replace lost federal dollars the same as new expansion requests and suggested prioritizing requests that address core community needs. HSD is seeking state-level investments in staffing and IT modernization; officials said reducing the error rate is a multi-year effort that could require sustained funding.

Ending: Agency leaders urged lawmakers to consider follow-up appropriations and process changes to avoid sudden reductions in benefits or administrative capacity that could affect beneficiaries and the state's economy.