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News Story
Michigan’s SNAP administration costs to jump $94 million as feds shift burden to states
State’s error rate could cost $321 million or more
By Michigan Capitol Confidential Staff
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September 22, 2026
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Michigan’s cost to administer the Supplemental Nutrition Assistance Program will rise by about $94 million in the coming fiscal year as the federal government shifts a larger share of food stamp expenses to the states.
Michigan spent approximately $382.7 million administering SNAP in fiscal year 2024, according to the Michigan Dept. of Health and Human Services. The administrative costs included staffing, technology, employee training, fraud control, employment and training programs.
Historically, state and federal governments have split most SNAP administrative expenses equally. Beginning in fiscal year 2027, which starts Oct. 1, the federal contribution will fall from 50% to 25%, leaving states responsible for 75%.
At Michigan’s 2024 spending level, the state’s administrative share would increase from approximately $191.4 million to $287 million, or $95.7 million. Michigan’s recently approved fiscal year 2027 budget includes $94.3 million to cover the increased state share, according to the state health department.
The federal government said the change will shift an estimated $16.9 billion in administrative costs to states between fiscal years 2027 and 2031. The U.S. Dept. of Agriculture said the law changes the funding percentages but does not reduce states’ administrative responsibilities,
Michigan also faces the prospect of paying hundreds of millions of dollars toward the food benefits themselves beginning in fiscal year 2028. The size of that payment will depend on the state’s SNAP payment error rate.
Michigan’s error rate was 9.89% in fiscal year 2025, up from 9.53% in 2024, according to the Dept. of Agriculture. The latest rate consisted of an 8.66% overpayment rate and a 1.23% underpayment rate.
Payment errors do not necessarily come from fraud. They can result from mistakes by state employees or recipients, including reporting inaccurate or outdated information about household income or composition.
To avoid paying the additional SNAP benefits — not just the administrative expenses — Michigan must reduce its error rate to below 6%. States with error rates of 6% to 8% will pay 5% of benefit costs, states with error rates of 8% to less than 10% will pay 10%, and states with a rate above 10% will pay 15% of the benefits’ costs.
Michigan distributed approximately $3.21 billion in SNAP benefits during fiscal year 2024. At that spending level, a 9.89% error rate would place Michigan in the 10% cost-sharing category and result in an annual state expense of roughly $321 million. An error rate of 10% or more would increase the cost to approximately $481 million.
