Texas lawmakers are grappling with a costly new reality as federal changes to the nation’s food assistance program are set to shift hundreds of millions of dollars in expenses onto the state.
Under new rules enacted under the Trump administration, Texas is expected to pay significantly more each year to continue participating in the Supplemental Nutrition Assistance Program, commonly known as SNAP. State officials told legislators Wednesday that the combined impact of new penalties and increased administrative obligations could cost Texas taxpayers an additional $826 million annually by 2027.
The financial outlook was presented by the Texas Health and Human Services Commission ahead of a meeting of the Texas Senate Health and Human Services Committee. The hearing focused on how effectively Texas prevents fraud in public assistance programs, but much of the attention centered on how the new federal requirements will affect the state budget.
At the core of the issue is the SNAP error rate, a federal metric used to measure how often benefits are either overpaid or underpaid. Texas currently reports an error rate of nearly 9%, which is better than the national average of 11% but still far above the new federal threshold. States will be required to reduce their error rates below 6% by 2027 or face steep financial penalties.
If Texas fails to meet that benchmark, officials estimate the state could owe approximately $709 million in penalties alone. Importantly, an error rate does not necessarily indicate fraud. Many discrepancies arise from routine changes in a recipient’s financial situation, such as fluctuations in income or household size, which can affect benefit calculations.
Beyond penalties, the new rules also increase the state’s share of SNAP administrative costs. While the federal government has historically covered the full cost of benefits and half of administrative expenses, Texas will now be responsible for 75% of those administrative costs. According to state projections, that change will add another $117 million annually beginning next year.
Together, these financial shifts represent a dramatic departure from the traditional structure of SNAP, which has long been fully federally funded in terms of direct benefits. The program currently serves approximately 3.5 million Texans, including about 1.7 million children. On average, households receive close to $400 per month through electronic benefit cards that can be used to purchase groceries.
The policy changes come as state leaders intensify their focus on fraud prevention in public assistance programs. Lt. Gov. Dan Patrick identified welfare fraud as a key legislative priority, prompting the committee hearing. The renewed scrutiny follows high-profile fraud cases in other states, including issues with child care assistance programs in Minnesota.
In Texas, officials maintain that fraud levels remain relatively low, particularly in comparison to other states. Nevertheless, Gov. Greg Abbott has directed agencies to strengthen oversight and detection efforts. The state’s approach includes collaboration between health officials and investigative units tasked with identifying improper payments and abuse.
Adding another layer of change, recent policy updates have also altered what SNAP recipients can purchase. As of this month, benefits can no longer be used to buy candy or sugary drinks, reflecting a broader push to align the program with nutritional goals. Eligibility rules remain unchanged in other respects, including the longstanding prohibition on benefits for undocumented immigrants.
State health officials, including Executive Commissioner Stephanie Muth, are expected to outline current anti-fraud strategies and propose additional measures during the legislative hearing. Lawmakers face the challenge of balancing stricter federal requirements with the need to maintain access to food assistance for millions of residents.
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