High SNAP error rate could cost Minnesota taxpayers over $100M a year

New federal rules could cause Minnesota to pay $130 million per year for SNAP benefits to balance a high distribution error rate.

Since its creation in 1964, the federal government has covered the full cost of SNAP (Supplemental Nutrition Assistance Program) benefits, also known as Food Stamps. States cover a share of administrative costs, which are usually a small fraction of total costs. However, this changes next year.

Signed into law in July 2025, the One Big Beautiful Bill Act (OBBBA) requires states to pay for a share of SNAP benefits starting in October 2027. States’ contributions toward benefits will depend on their respective error rates. Error rates include payments above and below what recipients are entitled to.

Penalties are tiered. For error rates under 6 percent, the federal government will continue to cover 100 percent of benefits. But for error rates above 10 percent, states would pay for 15 percent of benefit costs.

How much could Minnesota pay?

According to data from the U.S. Department of Agriculture, Minnesota’s SNAP error rate in 2025 was 12.6 percent. This is up from 9 percent in 2024. The national average rate in 2025 was 10.2 percent. Among the 50 states, Minnesota’s error rate was the 11th-highest.

With Minnesota’s SNAP benefits averaging $72 million a month in early 2026, the state’s share under the new rules would hit $10.8 million per month. That drags out to a staggering $130 million a year, leaving fewer resources available for other state priorities.

Certainly, high error rates are not evidence of fraud. Nor are they entirely a reflection of administrative error, since even unintentional misrepresentation by recipients drives up these numbers.

Regardless of the cause, the scale of the issue varies wildly by state. Minnesota’s error rate in 2025, for instance, was more than twice that of Wisconsin and Iowa, and over five times that of South Dakota. Clearly, more can be done to protect taxpayers’ money — and OBBBA is designed to accomplish just that. By forcing states to share the cost of lax administration, the legislation ensures that states finally implement stronger checks and balances.

Fortunately, for Minnesota taxpayers, the outcome is not set in stone. OBBBA lets states use either 2025 or 2026 error rates to determine cost-sharing. This gives Minnesota a vital — albeit small — window of time to act and slash improper payments.