A state’s fiscal office projected that its SNAP benefits budget could increase by $190 million if payment error rates aren’t addressed. The majority of the nation remains in the same boat while legislatures allocate resources to cut rates.
Pennsylvania’s Independent Fiscal Office based the Wednesday estimate on the state’s 9.2% error rate in Supplemental Nutrition Assistance Program benefits. It would be the first time the state, and any SNAP administrator, would have to pay after Congress overhauled the food stamp program as part of President Donald Trump’s budget reconciliation law.
“The latest payment error rate published for 2025 declined to 9.2%, and the state must reduce it below 6% for 2026 to avoid cost-sharing payments,” according to the report. “If the error rate falls between 6% and 8%, then the state must absorb roughly $190 million of benefit costs. If the rate remains above 8% but below 10%, then the amount is $380 million.”
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The penalty would affect the state’s 2027-28 budget.
The state’s Department of Human Services, which manages Pennsylvania’s food stamp program, hasn’t yet responded to Straight Arrow’s request for comment.
It’s one of many changes made to the nation’s SNAP benefits that scholars previously described to Straight Arrow as an overhaul.
The U.S. Department of Agriculture calculates error rates based on benefits issued to ineligible households, overpayments to eligible households and underpayments to eligible households, according to the Food Research and Action Center. FRAC added that the calculation doesn’t include barriers to entry, timeliness of case processing and program abuse.
“As a result, relying on payment error rates as a comprehensive performance metric can obscure other critical aspects of program administration and lead to misleading conclusions about program effectiveness,” the organization wrote.
The Keystone State isn’t alone. Multiple states could see higher budgets because the bill created a sliding-scale penalty for rates that exceed 6%. The national average is at 10.62%, according to the USDA. Only 10 states have rates below 6%. They are Idaho, Iowa, Kentucky, Nebraska, South Dakota, Utah, Wisconsin, Wyoming, Vermont and the U.S. Virgin Islands.
“These payment error rates are further proof that state accountability is severely lacking in SNAP,” USDA Secretary Brooke Rollins said in a June release announcing the 2025 fiscal year’s error rates.
Rollins added on X that the national average meant that, on average, $10.1 billion in benefits were paid to households in error.
States won’t see benefit share penalties until Oct. 1, 2027. The USDA added that the 2025 fiscal year is the first that could be used to calculate error rates. Beyond the high error rates, the USDA requires states to submit corrective action plans that detail how they’ll address errors.
“We’re not backing down in the fight to make SNAP more accountable to the American taxpayer,” Rollins wrote.
Benefit costs according to error rates
The bill implemented a penalty that applies based on how high a state’s error rate is, the fiscal office said in the release. If rates are below 6%, states do not have to fund a percentage of benefit costs:
- Rates between 6% and 8% would be a 5% penalty
- Between 8% and 10%, the penalty is 10%
- Rates above 10% require a 15% penalty.
No such structure existed before the One Big Beautiful Bill.
Ten-digit increases
Left-leaning think tank Center on Budget and Policy Priorities estimated in June that states across the nation could pay a collective $9 billion increase on SNAP benefits due to high error rates.
Exact numbers have not been set since the next fiscal year doesn’t start until Oct. 1. Penalties do not go into effect until Oct. 1, 2027. The think tank estimated California to take the biggest hit with a $1.9 billion budget increase. Besides states that won’t have penalties due to low rates, the lowest penalty is $15 million for Montana, New Hampshire and North Dakota.
“If states can’t fully cover these huge new costs by raising taxes or cutting other services, they’ll need to further restrict access to SNAP or potentially end the program entirely,” according to the think tank.
The Urban Institute and the American Public Human Services Association surveyed all 50 state SNAP agencies in the spring to assess how they would modify their programs to eliminate payment errors. Only 39 states responded.
States are adopting a host of procedures and practices to tackle error rates, including data-driven quality control, increased staffing and modernizing administrative portals. All responding states said their respective legislatures passed or are considering bills to address payment accuracy.
“With finite staffing, funding, and systems capacity, states are often required to prioritize among competing program responsibilities,” according to the survey report. “In some cases, this has meant shifting resources away from other important priorities, including timeliness, modernization efforts and technology investments, in order to focus on payment accuracy initiatives.”
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