Finance panel reviews SNAP administrative shortfall after federal match change; DHHS projects several million dollar impact
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Summary
Committee heard that HR1 will change the administrative‑cost match for SNAP, shifting costs so the state bears roughly 75% of administrative costs (25% federal) from Oct. 1, 2026. DHHS estimates a partial FY27 state impact of about $4.4 million and a full‑year impact of roughly $5.9–6.0 million; department officials said benefits themselves would not be cut but administrative shortfalls will require budget adjustments.
House Bill 17‑50, a supplemental appropriation for SNAP administrative costs, was discussed at the Feb. 9 work session after lawmakers reviewed a federal change that alters the federal/state split for SNAP administrative costs.
Department witnesses confirmed that an HR1 provision will take effect on Oct. 1, 2026 that changes the administrative match. Nathan White and DHHS staff said the working assumption is that the federal/state administrative split will move to roughly 25% federal / 75% state for the administration line beginning that date. "That was an HR 1 starting 10/01/2026," Nathan White said when asked for the primary source.
DHHS provided an initial estimate of the budgetary impact: a partial FY27 state administrative increase of an estimated $4.4 million (three‑quarters of the year) and a potential full‑year effect in subsequent fiscal years closer to $5.9–6.0 million. The department noted that the SNAP benefit dollars themselves do not appear in the state budget (those are federal benefit payments), but administrative costs—staffing, contracts and integrated eligibility operations—do. The department said it would bring a detailed dashboard to the fiscal committee with line‑by‑line allocations and proposed ratios to help the legislature understand per‑recipient administrative costs.
Members were particularly focused on error rates and program integrity. DHHS reported a federal FY24 error rate of 7.57% (below the national average at the time of reporting) and warned that HR1 creates a new 5% threshold for purposes of increased state financial obligations starting Oct. 1, 2027: states with error rates above that threshold could face higher costs. DHHS distinguished administrative error rates from fraud investigations, noting that referrals for possible fraud are a small fraction of total cases and that error rates largely reflect eligibility documentation or reporting problems rather than intentional wrongdoing.
Legislators asked what would happen if the state does not appropriate the administrative shortfall. DHHS said benefits to recipients themselves would not be directly cut by the department’s administrative shortfall, but a lack of appropriation would require the department to identify alternate in‑budget reductions or transfers to cover administrative obligations.
The committee asked DHHS to return with a detailed fiscal dashboard, an accounting of the administrative positions and vacancies in integrated eligibility units, and a review of how prior temporary funds were applied so members could understand whether any existing surpluses could be repurposed.
