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SNAP funding changes: state officials warn of $19M shortfall in FY27 and higher ongoing costs if federal rules shift
Summary
Nevada’s Division of Social Services warned the Interim Finance Committee that federal changes to SNAP will raise state administrative costs — roughly $19 million for the nine months after Oct. 1, 2026, and about $25 million per year thereafter if current costs persist — and may increase state liability tied to error rates.
Department of Social Services officials told the Interim Finance Committee that recent federal changes to SNAP funding and program rules will materially increase state administrative costs and may raise the SNAP error‑rate exposure for Nevada.
Robert Thompson, Division of Social Services administrator, and Deputy Administrator Kelly Cantrell explained two major impacts from federal legislation enacted this year: first, the federal cost share for SNAP administrative expenses will drop from 50% to 25% starting Oct. 1, 2026, which DSS estimated could mean approximately $19 million in additional state costs for the nine months in FY2027 and roughly $25 million per year thereafter if current cost levels persist. Second, changes tied to program error‑rates and work requirements (including changes to the ABAWD definition and new documentation rules) could increase state liability if error rates exceed federal thresholds.
Cantrell said Nevada closed FY2024 with a 5.94% error rate but currently sits near 7% for FY2025; under the new federal framework, a sustained 7% error rate could require the state to match about 5% of benefits (an estimate Thompson described historically as roughly a $55 million annual liability at higher error rates). DSS described steps already taken to lower errors and administrative risk: reinstating interviews at application/recertification, tightening verification of shelter and other expenses, reintroducing pre‑approval case reviews, and retraining staff. The division said more than 50% of current errors are customer‑reported or customer‑verification gaps.
Lawmakers asked about timeline and contingencies; Tiffany Greenmeier (GFO) and DSS staff said they are reconciling payroll and accounting systems and do not expect FY2025 closeout delays. DSS said they are exploring program and staffing adjustments but also warned that state budgets may need supplemental appropriations or structural changes to absorb the increased federal cost‑share if offsets are not found.
Why it matters: SNAP is a primary safety net for low‑income Nevadans; changes that shift administrative costs to the state and reintroduce able‑bodied adult without dependent (ABAWD) work requirements could reduce benefits for some households and increase demands on state eligibility staff and community partners. DSS agreed to continue updates and to coordinate with legislative fiscal staff on budget implications.
