Why It Matters
A federal law signed by President Donald Trump is forcing Minnesota to shoulder hundreds of millions of dollars in food assistance costs previously covered entirely by Washington, threatening the state budget and potentially reducing benefits for more than 400,000 residents who depend on the program each month.
What Happened
The One Big Beautiful Bill Act, signed into law on Independence Day last year, fundamentally altered how SNAP (food assistance) costs are split between states and the federal government. Rather than the federal government covering all benefit expenses, states must now pay a share based on their payment error rates—the percentage of benefits distributed incorrectly.
Minnesota’s error rate climbed sharply, from nearly 9 percent in 2024 to more than 12 percent in 2025, according to USDA data released on June 24. That threshold places the state in a category requiring it to cover 15 percent of all SNAP benefit costs. The state narrowly missed a two-year grace period available to states with error rates above 13.3 percent.
The law also increased Minnesota’s share of administrative costs from 50 percent to 75 percent, a shift that compounds the financial strain. State Auditor Julie Blaha noted that “these changes to requirements requiring all kinds of new reporting are causing further disruptions and they’re struggling to keep up.”
The consequences are already visible. At least 18,000 Minnesotans have lost SNAP benefits since the law took effect, while the state legislature scrambled to appropriate $75 million for computer system upgrades and additional training for county and tribal workers trying to comply with new federal requirements.
By the Numbers
$250 million — projected new SNAP costs Minnesota will owe over two years under the law
400,000+ — Minnesotans receiving SNAP benefits each month
12%+ — Minnesota’s SNAP payment error rate in 2025, up from 9% in 2024
15% — share of SNAP benefit costs Minnesota must now cover
75% — percentage of administrative costs Minnesota now covers (previously 50%)
18,000+ — Minnesotans who have lost SNAP benefits since the law took effect
$6 — average daily SNAP benefit per recipient
Zoom Out
The shift reflects a broader federal effort to reduce improper payments in means-tested programs by shifting accountability and financial risk to states. Nine states, including Iowa, escaped the requirement entirely because their error rates fell below the 8 percent threshold that triggers state cost-sharing.
The policy creates a perverse incentive structure: states with lower administrative capacity or higher poverty rates face steeper financial penalties, potentially forcing them to reduce benefits or tighten eligibility. Minnesota’s situation is particularly acute because the state has a relatively large SNAP caseload, with most recipients being children, seniors, and people with disabilities.
The law also creates uncertainty for state planning. Minnesota has the option to base its payment obligation on either the 2025 error rate or the 2026 error rate, whichever is lower—but the USDA will not release the 2026 figures until after the 2027 legislative session, leaving policymakers unable to finalize budget decisions based on complete information.
What’s Next
Minnesota lawmakers will need to find additional revenue or cut other programs to absorb the new SNAP costs, or risk further benefit reductions for low-income residents. The state will monitor its 2026 error rate in hopes of qualifying for a lower cost-sharing tier when the USDA releases those figures, though the timing mismatch with the legislative calendar complicates planning.