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Human services warns HR 1'driven SNAP changes could shift large administrative costs to counties and require state match tied to payment‑error rate
Summary
DHS officials said HR 1 will reduce federal SNAP administrative match, expand work requirements and tie the state's future grocery share to an audit payment‑error rate; at Colorado's current PER (~9.97%) the law could require a substantial state contribution beginning Oct. 2027.
Department of Human Services staff told the Executive Committee that HR 1 alters SNAP on multiple fronts and creates both operational and fiscal risks for counties and the state.
DHS Director Michelle Barnes summarized the baseline: Colorado currently serves roughly 614,000 SNAP recipients (about 10% of the population) and issues about $1.5 billion in monthly grocery benefits annually, a sum that is now 100% federally funded. Under HR 1, multiple changes will phase in between October 2025 and October 2027: narrowed noncitizen eligibility, an expanded set of beneficiaries subject to work requirements starting Oct. 1 (and larger changes by Jan. 1, 2027), reduced retroactive coverage, and a cut in the federal administrative match from 50% to 25%.
Deputy Director Mina Castillo explained the new and particularly consequential provision tying the state's future share of grocery issuance to the federal PER (payment error rate). Colorado's official PER for FY 2024 is 9.97 percent; under HR 1 a PER above 6 percent triggers state match obligations on issuance, creating potential multi‑hundred‑million‑dollar state exposure. "If your PER rate is below 6% you do not need to give a state match," Castillo said; "at our current rate we'd face a substantial state share." DHS estimated the additional state exposure for issuance and lost federal admin funding could be on the order of hundreds of millions of dollars annually beginning in FY 2027 unless the PER is reduced or other policy changes are made.
Barnes and Castillo emphasized timing and operational impacts. HR 1 expands the population subject to work requirements (DHS estimates roughly 156,000 people will be in the newly covered cohorts and that about 80,000 could lose benefits if they fail to meet requirements), increases county workload and phone/in‑person visits, and eliminates certain SNAP education funding streams. County officials already report increased client inquiries; DHS said counties will carry much of the administrative burden and asked the legislature for attention to county budget impacts.
DHS urged the committee that lowering the PER and addressing vacancies/training among county eligibility workers are essential to limiting state exposure; the agencies said these are large operational reforms and not solvable by working harder under existing staffing and technology constraints. The committee received the briefing without a vote and requested continued coordination with counties and more granular fiscal modeling.
