Colorado says new SNAP law will add $50 million to $60 million a year in administrative costs
State officials told lawmakers Colorado’s share of SNAP administrative costs will rise from 50% to 75% on Oct. 1, with potentially far larger food-benefit costs starting in 2027 if payment error rates stay high.
Colorado expects to take on about $50 million to $60 million in additional annual costs to run the Supplemental Nutrition Assistance Program when a new federal law cuts the federal administrative match this fall, state officials told lawmakers at a June 25 hearing.
Staff said the law shifts Colorado’s share of SNAP administrative costs from 50% to 75% beginning in federal fiscal year 2027, which starts Oct. 1, 2026. Earlier estimates had put the state’s new annual administrative burden at at least $43.9 million.
The change comes from Public Law 119-21, the One Big Beautiful Bill Act of 2025, which reduces the federal share of SNAP administrative costs from 50% to 25% starting in federal fiscal year 2027.
Lawmakers also heard that Colorado could face another $140 million to $210 million a year in SNAP benefit cost sharing, depending on the state’s payment error rate.
Colorado’s most recent reported SNAP payment error rate is 10.09%, according to USDA’s FY 2025 payment error table. Under USDA guidance, states with error rates of 6% or higher must cover 5%, 10% or 15% of SNAP food-benefit costs beginning Oct. 1, 2027.
At Colorado’s current rate, the state would fall into the highest tier under the law. Using about $1.3 billion in Colorado SNAP food benefits in fiscal year 2024, a Feeding America Action analysis estimated a 15% state share at about $194 million a year. If Colorado drops below 10% but remains at 8% or higher, the state share would be 10%, or about $130 million by the same estimate.
A Joint Budget Committee staff narrative for the 2026-27 budget says the state budget includes additional cash funds from the Healthy School Meals for All Program Fund to offset lost federal SNAP administration money. But the public record reviewed for this story does not show a final dedicated appropriation covering the full new cost before Oct. 1.
Congressional Research Service says states may use either their fiscal 2025 or fiscal 2026 payment error rate to calculate the first year of required benefit matching, giving Colorado a chance to reduce its exposure.
For now, Colorado is preparing for higher administrative costs starting Oct. 1, with a much larger potential benefit-cost obligation a year later if its error rate does not improve.