New Trump administration rules designed to cut waste in the nation’s food stamp program means Texas taxpayers will have to pay the federal government $700 million more each year to participate, state officials told lawmakers on Wednesday.
Texas Health and Human Services officials disclosed the cost in a presentation published Wednesday morning in preparation for the Senate Health and Human Services Committee, which met today to discuss how Texas curbs fraud in welfare programs.
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Federal officials announced the new rules last year during the passage of the One Big Beautiful Bill Act. The rules force each state to improve the number of times officials overpay or underpay recipients in the Supplemental Nutrition Assistance or SNAP program. States, including Texas, have until 2027 to improve their SNAP error rate or face financial penalties.
Almost 9% of Texas’ SNAP payments had an error, better than the national rate of 11%, putting it in the middle of the pack compared to other states. But under the new rules the state would be penalized more, unless it can bring down that error rate to below 6%. In 2027, Texas is expected to face $709 million in penalties. An error rate does not necessarily mean fraud. Monthly changes in a SNAP recipient’s financial situation can result in an overpayment or underpayment.
Currently, SNAP assistance is 100% funded by federal tax dollars but each state agrees to pick up a percentage of the administrative costs. Under the new federal rules, Texas will also have to pay 75% of SNAP’s administrative cost — about $117 million more starting next year, according to HHS’ numbers — instead of the 50% share the state pays now. Add in the penalties from the error rate, taxpayers will have to pay a total of $826 million more in 2027.
SNAP, also known as food stamps, feeds about 3.5 million low-income residents, including about 1.7 million children in Texas. Texas households receive an average payment of nearly $400 per month that is loaded onto a debit-like Lone Star card that they can use to purchase groceries. Unused benefits from one month can be rolled over to the next month . Starting this month, SNAP recipients can no longer purchase candy or sugary drinks. Also, undocumented immigrants are not eligible for SNAP assistance.
Today’s committee hearing, expected to last most of the day, was scheduled after Lt. Gov. Dan Patrick listed fraud as an interim charge or priority. Welfare fraud has resurfaced as a conservative priority following reports from Minnesota of child care fraud in that state earlier this year. By comparison, Texas sees little fraud in its own child care assistance programs. Still, Gov. Greg Abbott earlier this year has directed agencies to make fraud detection a top priority.
Texas HHS Executive Commissioner Stephanie Muth and officials from the separate HHS Office of Inspector General are expected to testify on how they detect fraud currently and what more could be done.
This is a developing story. Check back for updates.