Michigan oversight panel hears that SNAP error rates and new federal penalties could cost state tens to hundreds of millions

Adam Stacy, a policy analyst at the Mackinac Center for Public Policy, told the Michigan House Oversight Subcommittee on State and Local Public Assistance Programs that the states current Supplemental Nutrition Assistance Program (SNAP) error rate of 9.53 percent could expose Michigan to hundreds of millions of dollars in added costs under recently enacted federal changes.

"Currently in the state of Michigan, we have a SNAP error rate of 9.53," Chair Wolford said at the start of the hearing. Stacy and several representatives described how provisions of what Stacy referred to throughout the hearing as the 1 Big Beautiful Bill Act (OBAA) change both the federal-state administrative cost share and the penalties states face if their improper-payment rates exceed federal thresholds.

Stacy told the committee that the federal changes disentangle long-standing arrangements that covered most benefit payments and administrative costs. He said states will be required to assume a larger share of administrative expenses and will face graduated matches if their SNAP improper-payment rates exceed the federal target. "If we're above 6% below 8, we're gonna have to make a match of 5%. If we're 8 to 10%, we're gonna have to do 10%, and 10% or greater is 15%," Stacy said.

Why it matters: SNAP serves roughly 1.5 million Michiganders, about…