DHS warns HR 1 would shift SNAP costs to states, unveils Healthy SNAP pilot and summer nutrition asks
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Summary
DHS Commissioner Clarence H. Carter asked the committee to fund a $58.3 million nine‑month SNAP administrative cost request tied to federal HR 1, outlined an $8 million data governance request to lower the state's SNAP error rate (currently 9.47%), and said USDA approved Tennessee's Healthy SNAP waiver to ban certain sugary products beginning July 31.
Clarence H. Carter, commissioner of the Tennessee Department of Human Services, told the House Finance, Ways and Means Committee that the federal package discussed in the hearing (referred to in testimony as HR 1) would change how SNAP administration is funded and could impose new costs on the state if Tennessee's SNAP error rate does not fall below a 6% threshold.
"HR 1... proposes a cost shift that would have the state pay 75% of the administrative cost and the federal government 25%. The cost of that to the state is $58,334,700 for 9 months," Carter said, asking legislators to consider a nine‑month funding allocation to cover the shift. He added that the new law would also shift benefit costs to states based on error‑rate tiers, and that Tennessee's most recent measured error rate was 9.47%.
Carter said DHS is seeking $8,000,000 for a data governance contract to reduce the error rate and avoid a future state obligation to pay a share of SNAP benefits. He framed the effort as part of a broad, multi‑pronged approach to improve data quality and administrative processes.
The department also described several budget requests for child nutrition and other programs: a $3,000,000 continuation of a summer nutrition payment program, $5,000,000 for summer food assistance to bolster sponsors, a $15,000,000 nonrecurring grant to the statewide YMCA alliance for out‑of‑school care and childcare initiatives, and a $250,000 recurring grant for YMCA Community Action Project programming.
On implementation of the Healthy SNAP waiver pilot, DHS staffer Callan Baggett said USDA has approved Tennessee's plan, which is scheduled to go live on July 31 and will ban specified high‑sugar or processed foods in SNAP purchases. Baggett said DHS is developing the evaluation plan required by the waiver and will conduct surveys; at the time of the hearing DHS did not plan to provide incentives for survey participation.
Committee members asked for clarifications about loan repayments tied to shared‑savings allocations for disaster loans, outcomes from the Child Care Improvement Fund, and summer feeding reach. DHS said the Child Care Improvement Fund (a three‑year pilot totaling $45,000,000) has been deployed across multiple projects and that last year's summer nutrition payments served about 18,200 children; DHS promised follow‑up detail on grant counts and slot creation.
Carter emphasized that the department is working to reduce SNAP error rates and to adapt to new federal rules, and warned that without the requested administrative funding "we would be required to reduce our footprint" and the state's ability to deliver SNAP benefits on schedule.
