Trump-era SNAP changes could cost Texas taxpayers $826 million as stricter federal rules demand lower error rates

Texas – Texas is facing a sharp financial shift as new federal rules tied to the nation’s food stamp program begin to take shape, placing hundreds of millions of dollars in additional costs on the state. What was introduced as an effort to reduce waste is now turning into a major budget concern, with lawmakers being told that taxpayers could soon be responsible for a steep increase in spending.

State officials revealed the scale of the impact during a legislative briefing ahead of a Senate Health and Human Services Committee meeting. According to that presentation, Texas may have to send roughly $700 million more each year to the federal government just to remain in the Supplemental Nutrition Assistance Program, commonly known as SNAP.

The rule changes, introduced during the passage of the One Big Beautiful Bill Act, set a stricter standard for how accurately states must manage benefit payments. At the center of the issue is something called the “error rate,” which tracks how often recipients are paid too much or too little.

Rising Costs Tied to Stricter Requirements

Texas is not the worst performer when it comes to payment accuracy. About 9% of its SNAP payments contain errors, which is actually better than the national average of 11%. Still, under the new rules, that is not good enough.

States are now required to push their error rates below 6% by 2027. If they fail to meet that mark, financial penalties will follow—and for Texas, those penalties could be massive. Current projections suggest the state could face about $709 million in penalties alone if improvements are not made in time.

It is important to note that these errors do not automatically mean fraud. Many of them happen because a household’s financial situation changes from month to month. A person might earn slightly more one month or lose income the next, which can lead to overpayments or underpayments. Even so, the federal government is now demanding tighter control, regardless of the cause.

At the same time, another cost layer is being added. SNAP benefits themselves are fully funded by federal dollars, but administrative costs are shared between states and Washington. Until now, Texas has covered about 50% of those administrative expenses. Under the new rules, that share jumps to 75%.

That increase alone is expected to cost Texas an additional $117 million starting next year. When combined with the projected penalties, the total financial burden could climb to $826 million by 2027.

A Program Millions Depend On

The stakes are high because SNAP is not a small program. In Texas, it supports around 3.1 million low-income residents, including roughly 1.5 million children. For many families, it is a key source of stability.

Households typically receive close to $400 per month, delivered through a Lone Star card that works like a debit card for groceries. If some of that money is not used, it can roll over into the next month, giving families a bit of flexibility when managing tight budgets.

Recent changes have also reshaped how benefits can be used. As of this month, SNAP recipients are no longer allowed to buy candy or sugary drinks with their benefits. At the same time, undocumented immigrants remain ineligible for the program.

Fraud Concerns Drive Political Focus

The timing of these federal changes aligns with growing political attention on welfare fraud. In Texas, Lt. Gov. Dan Patrick has made fraud prevention a priority topic, prompting lawmakers to examine how programs like SNAP are monitored.

The issue gained momentum after reports earlier this year highlighted cases of child care fraud in Minnesota. While Texas officials say their own systems show relatively low levels of fraud, the concern has still pushed leaders to take a closer look.

Governor Greg Abbott has already directed state agencies to strengthen fraud detection efforts, signaling that oversight will only become stricter moving forward.

During the committee hearing, which was expected to last for hours, Texas Health and Human Services Executive Commissioner Stephanie Muth and members of the agency’s Office of Inspector General were set to explain how fraud is currently identified and what additional steps might be needed.

A Costly Balancing Act Ahead

For Texas, the challenge now is twofold. On one side, there is pressure to improve accuracy and meet federal standards. On the other, there is the reality of managing a massive program that serves millions of people whose financial situations often shift unpredictably.

Reducing the error rate to below 6% will not be easy, especially given how complex and fluid many households’ incomes can be. Yet failing to meet that goal could come at a very high price.

As the 2027 deadline approaches, the state must decide how to adjust its systems without disrupting support for those who rely on it. What began as a federal effort to tighten oversight is now forcing Texas into a difficult position—one where every percentage point could carry a cost measured in hundreds of millions.