'We are a critical safety net': Alabama food banks warn SNAP penalties could cost taxpayers $174 million

On the morning of August 19, a group of food bank leaders in Alabama gathered for a press conference urging Alabama’s senators Katie Britt and Tommy Tuberville to advocate for a payment delay.

“We are a critical safety net, but we were never built to replace the federal nutrition support that lets families buy groceries consistently and with dignity,” Nicole Williams, CEO of the Community Food Bank of Central Alabama, said in the press conference.

SNAP payment error fees could cost states $9 billion

Trump’s One Big Beautiful Bill Act penalizes states with SNAP payment error rates greater than 6%, ranging from 5% to 15% of SNAP costs depending on how far a state’s error rate exceeds this threshold.

States with error rates between 6% and 7.99% must pay 5% of SNAP costs. States with an error rate between 8% and 9.99% would pay 10%. States with error rates greater than 10% have to pay 15%.

Currently, most states have error rates greater than 6%, adding up to roughly $9 billion in overall costs. Alabama, with an error rate of 9.52% in the fiscal year 2025, would be responsible for 10% of SNAP costs in the state, or about $174 million.

State cost-sharing starts on October 1, 2027, the beginning of FY2028. However, states with an error rate of 13.3% or higher get a two-year buffer period, so the states that exceed that threshold — Alaska, Delaware, Georgia, Illinois, New Mexico, and Oregon, as well as the District of Columbia — won’t have to pay any fees until FY2029.

Alabama food bank leaders are asking for the same two-year buffer given to the states with high error rates.

“If we had a two year delay like they gave many other states, it would give us the ability to get under that 6% and save our communities in our state from paying into those funds and keep people on the rolls,” Williams said in the conference

Leaders want more time before new federal fees take effect

Alabama is far from the only state requesting this buffer. A bipartisan group of 210 mayors sent a letter to Senate Agriculture Committee Chairman Sen. John Boozman and Ranking Member Sen. Amy Klobuchar. The letter urges that they reject cuts to SNAP and delay the cost shift to allow states more time to improve error rates.

SNAP payment errors are inaccurately distributed payments to recipients, whether they received too much assistance or not enough. According to Kyle Waide, CEO of the Atlanta Community Food Bank, these issues are often a result of clerical errors — mistakes in data entry or keystroke errors.

“Some are trying to characterize these error rates as examples of fraud or abuse, and I think that is a mischaracterization,” Waide told Moneywise. “Nobody’s arguing for the idea that accuracy doesn’t matter, but the mistakes that we’re talking about in the case of payment error rates are exactly that — they’re errors.”

More importantly, implementing changes that systemically lower the error rate takes time, which the current fee deadline doesn’t allow for.