Legislative Finance staff warns SNAP policy changes, payment-error exposure could impose large state costs

Legislative Finance Committee staff gave the committee a detailed briefing on food security in New Mexico, emphasizing how proposed federal changes to SNAP could shift costs and eligibility in ways that would affect hundreds of thousands of residents.

Alma Kasim and Ruby Ann Esquivel presented census and state data showing about 14% of residents sometimes or often lacked enough food, and roughly 23% of children experienced food insecurity in 2023. LFC staff said about 459,500 people were receiving SNAP benefits in August, representing roughly 21.5% of the states population.

Kasim and Esquivel outlined how a pending federal reconciliation bill could alter SNAP administration and benefits: the bill would shift some benefit costs to states tied to payment-error rates, reduce the federal administrative match for SNAP from 50% toward 25% (raising state administrative costs), reset the benefit formula and tighten work and documentation requirements. LFC noted New Mexicos SNAP payment-error rate has risen to approximately 14.6% in recent reporting and said that, under some scenarios, state fiscal exposure could be substantial (LFC cited scenarios that include roughly $18.9 million in additional annual administrative costs beginning FY27 and projected additional costs that could approach $200 million by FY29 depending on timing and implementation).

"Census data showed that 14% of residents...that translates to about 1 in 7 New Mexicans and nearly 1 in 4 children living in households without consistent or adequate food," Kasim said, framing the brief as context for the committees fiscal and policy deliberations.

Esquivel described the states larger food program array (SNAP, WIC, school meals, TFAP, farm-to-food-bank programs) and highlighted a $30 million GROW appropriation (FY26FY28: $10 million per year) for food banks, noting initial contract language allowed up to 50% of the first tranche to be used for infrastructure (trucks, refrigeration) and that some food-bank leaders are concerned about the balance between infrastructure spending and direct food aid.

Committee members pressed staff on what drives the high payment-error rate. LFC staff said the driver is largely documentation and household-size reporting (not widespread fraud): errors commonly arise from incomplete or inconsistent documentation provided by applicants, and states that relaxed redeterminations during the public-health emergency saw different error baselines. Esquivel noted the state has added income-support staff and IT upgrades in recent years but emphasized timing and rule details from federal agencies will determine near-term impacts.

Lawmakers raised questions about who will be most affected (noncitizen households, those newly subject to stricter work rules) and about multiplier effects on grocery stores and rural food access. Esquivel said earlier state investments total over $111 million in general fund spending on food programs (FY26 figure presented) and that the $30 million GROW funds were not included in that dashboard total; she also read HCA estimates that tens of thousands of people could be newly subject to work requirements and that 16,220 New Mexicans could lose SNAP because of immigration-related eligibility changes in one LFC/HCA scenario.

During public comment, Dawn Hummer, CEO of the Community Action Agency of Southern New Mexico, urged the committee to include community action agencies in the Health Care Authority budget and requested $4.5 million to sustain and expand family-support services and targeted outreach to help eligible households navigate changes in Medicaid and SNAP.

LFC staff told the committee they will continue detailed modeling and that the committees priorities should be considered ahead of the special session and any federal rule rollouts. The committee recessed for lunch and scheduled further discussion and the LFC program-evaluation presentation on school meals after the break.