The “big, beautiful bill” passed by Congress three weeks ago will increase Alabama’s costs for the SNAP food assistance program, possibly adding more than $200 million within a couple of years.
The bill, spearheaded by President Trump and Republican lawmakers, shifts costs from the federal government to states for the Supplemental Nutrition Assistance Plan, which served a monthly average of 376,000 households, or 752,000 people, in Alabama last year.
Brandon Hardin, food assistance director for the Alabama Department of Human Resources, which runs SNAP, explained the huge implications for the state budget at a meeting of the DHR State Board on Thursday.
Until the “big, beautiful bill,” federal dollars paid the full cost of SNAP benefits and 50% of administrative costs.
Now, starting in 2027, states will have to pay 75% of administrative costs.
That will mean a $39 million increase for Alabama based on current operations.
But the biggest change is that starting in 2028, states will have to pay a portion of the benefits for the first time.
States will not have to bear that new cost if they keep their SNAP payment error rates below 6%.
The payment error rate is an estimate of the percentage of benefits incorrectly paid based on a review of a sample of about 1,000 SNAP cases.
States with an error rate of 6-7.99% will have to pay 5% of SNAP benefits.
Total SNAP benefits paid in Alabama last year were $1.77 billion. So 5% of that would be a new state cost of $88.5 million.
States with an error rate of 8-9.99% will have to pay 10%, which would mean $177 million for Alabama.
States with error rates of 10% or more will pay 15%, or $265.5 million for Alabama.
Alabama’s error rate has been the lowest among eight other states in its region the last three years, but still not low enough to avoid the huge new costs.
Alabama’s error rate was 4.68% in 2022, 7.07% in 2023, and 8.32% last year.
“We’ve hit that (below 6%) mark six out of the last 10 years,” Hardin said. “But we want to make sure we hit it 10 out of the 10. But to do that, we’ll have to make some investments.”
Hardin, who has directed the SNAP program for 12 years, said DHR will need more staff and resources to more closely monitor SNAP cases and eligibility requirements for clients.
For example, he said most clients are reviewed for eligibility every 12 months. He said that may need to be more frequent.
Most payment errors are not the result of fraud or waste, Hardin said.
Instead, they are generally the result of a change in a client’s status, such as moving to a new residence that affects factors like housing and utility allowances that are used to determine eligibility.
“Payment error means that there was something in the client’s case that was awarded in the initial case that got different during the 12-month certification period,” Hardin said.
A key to keeping the error rate down, Hardin said, is catching those changes more quickly, which means more interaction with the clients.
“You’ve got to touch the client more often,” Hardin said.
“If you catch it at month one or month two instead of at month eight, statistically you’ve got a better chance of reducing the error rate.”
Alabama’s error rate last year was based on a review of 1,109 cases.
There were $36,000 in incorrect payments out of $441,000 issued in the reviewed cases.
Alabama’s error rate of 8.32% ranked the 16th lowest nationally.
Hardin said there are already ongoing discussions with the Legislature, which will begin its next regular session in January.
The agency does not yet have a specific proposal for how to adjust to the new landscape, although it has increased training to focus on areas where most of the payment errors occur, which include wages and the costs of housing and utilities.
About 900 people work in the food assistance program for DHR.
“We’re going to continue to work hard on this area,” Hardin said. “We don’t have anything that’s currently ready to be rolled out immediately.
“We are increasing our training initiatives in the state to try to focus on our top error elements.
“There will be some really hard questions and decisions that’s got to be made by the Legislature and the budget chairs on whether or not they’re going to invest in this program to help us try to hit that mark 10 out of 10 times.”
See more: Massive SNAP cuts could kill hundreds of Alabama grocery stores, ‘send hunger soaring’
Trump’s ‘Big, Beautiful Bill’ threatens the lives of Alabama’s poorest people, advocates warn
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