DHS details childcare subsidy changes and SNAP error-rate plan as federal HR1 shifts costs
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Summary
Department of Human Services explained phases of childcare-subsidy eligibility rollbacks, savings from quality-reimbursement changes, and a strategy to cut SNAP error rates below 6% after HR1 shifted administrative costs to states.
Department of Human Services Director Jeffrey Cartman told the Senate Health and Human Services Subcommittee for Appropriations that DHS revised its childcare subsidy and other FY27 requests after program changes and utilization updates.
Cartman described two separate childcare funding requests: $11.5 million for teacher recruitment and retention and a revised subsidy request of about $7.59 million for FY27. He outlined program changes: retaining protections for the most vulnerable non-school-age children (0–5) initially, phasing off certain COVID-era add-ons, and returning eligibility from 85% to 55% of state median income on July 1 with gradual roll-offs at families’ renewal dates. Cartman said reimbursement will again tie to national accreditation and star ratings, which reduced 5-star facilities from about 1,305 (2024) to roughly 605 (Dec. 2025), shifting many to 4-star rates and producing about $5.3 million in savings next year.
On SNAP, Cartman explained that HR1 changes administrative cost sharing (moving some cost to the state) and highlighted the state’s vulnerability to a high error rate. DHS reported the FY25 closeout error rate at about 10.3–10.4% and said a 10% error rate would expose the state to roughly $250 million in additional match obligations; the agency’s target is below 6% to avoid large fiscal penalties. DHS described interventions already in place: expanded staff training, pre-reading high-risk cases (for new staff and cases over $800/month), and engagement of an experienced vendor (Epiphany & Associates) to drive verification and reduce errors.
Committee members asked for SNAP caseload breakdowns by age; DHS reported total SNAP recipients as 684,601 and agreed to provide a child-specific breakdown after the hearing. Members also pressed DHS about TANF reserves, DDSD (developmental disabilities) funding and case-manager shortages, and Advantage Waiver meal funding; Cartman said a $24 million supplemental for this year is included in a $38 million FY27 Advantage request and confirmed the second-meal appropriation of $2.5 million remains available though utilization has fallen.
Committee members recommended using the Child Care Advisory Council for provider-sourced regulatory relief; DHS encouraged providers to take recommendations through that body.