By Ashley Fredde
North Carolina could face hundreds of millions of dollars in new costs — or risk losing the Supplemental Nutrition Assistance Program entirely — if counties fail to meet new federal requirements, state lawmakers were warned Tuesday during a Joint Legislative Oversight Committee hearing in Raleigh.
The new requirements were included in the federal budget One Big Beautiful Bill Act signed into law by President Donald Trump in July. The law restructured SNAP — once commonly known as food stamps — by cutting federal funding and expanding work requirements. Some of those changes include:
- The upper age limit for those who need to meet work requirements was raised from age 54 to 64 for the first time for able-bodied adults without dependents. This means older adults — who often struggle to find jobs — will need to find employment or volunteer to qualify.
- Exemption for parents or other family members with a dependent younger than 18 will be changed to apply to families with a child younger than 14 years.
- Exemptions were also removed for homeless people, veterans and young adults who were in foster care when they turned age 18.
The new law also shifts more administrative and financial responsibility to states and, in a place like North Carolina, where social services are delivered by the state’s 100 counties, shifts the burden to already strapped county governments.
In all, the law reduces national SNAP funding by an estimated $186 billion over 10 years while requiring states to cover a larger share of program costs. The bill also penalizes states financially if they exceed federal payment error thresholds.
The changes place North Carolina on a tight timeline, with the first major deadline arriving Oct. 1, when the state’s share of SNAP administrative costs rises from 50 percent to 75 percent.
That 25 percent loss in federal administration dollars will mean county governments will have to come up with about $67 million, and the state will need to find $16 million, Robby Hall, director of the Brunswick County Department of Social Services, told lawmakers.
In Brunswick County, with a population of 175,000, Hall approximates the changes will cost about $429,000 in the upcoming fiscal year and $629,000 in the following year.
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While those numbers may sound modest in isolation, Hall said they come alongside the expanded work requirements that will significantly increase administrative workload for county social services workers, who will have to monitor beneficiaries’ work effort.
“Many of our counties are having difficulty in recruiting staff, retaining staff. We have to do constant trainings due to policy changes,” Hall said. “We need more quality control in what we do, but that is not a primary position that we see in a lot of our departments because we have timeliness requirements where we have to get the benefits out.”
“You’ve got small counties who can’t hire anybody because their budget’s not big enough, they’re too far for people to want to drive,” said committee co-chair Rep. Larry Potts (R-Lexington). “These deadlines that are coming down … will starve you out if you keep missing the deadline.”
New error rate requirements
Beginning in fiscal year 2028, states will also be required to pay a share of SNAP benefit costs tied to its payment error rate. States that erroneously pay out benefits totalling more than 10 percent of total cost or higher could be responsible for 15 percent of benefit payouts.
Hall warned that counties are already caught between meeting timeliness requirements and ensuring accuracy.
Hall added that Brunswick County’s error rate over the past few years generally has been under 6 percent but that in that time 17 positions had been added, with the county looking to add more.
“Some of these levers, like increased staffing to drive down a workload, are very hard to do in a bill that did not add new resources,” Mike Leighs, deputy secretary for the state Department of Health and Human Services, told lawmakers. “Some of those tools you might use to get the error rate down won’t be available, or will be harder for counties, because they would have to come up with such additional amounts of money.”
Despite concerns over rising administrative costs, some lawmakers said in the long run, the new restrictions could be beneficial and have the effect of eventually reducing county workloads.
Rep. Hugh Blackwell (R-Valdese) asked whether eliminating some recipients from the rolls would “consequentially reduce the number of people that we’ve got to have working with them.”
Leighs said the assumption overlooks the complexity the new screening rules add to the process.
“We think about 107,000 folks will be newly subject to the work requirements,” Leighs said. “That doesn’t necessarily mean they would not be eligible, but they would be newly subject and potentially could lose benefits.”
“The eligibility workers are still screening, and they’re actually screening with new rules,” he added. “And so their work is quite complex.”
Rather than assuming more requirements always create burden, Rep. Tim Reeder (R-Ayden) asked whether counties could require applicants to provide more information to social service workers beyond the required basics of name, address, signature. He said asking for more could result in reducing the need for staff follow-up while still meeting accuracy and timeliness standards.
But, currently, federal statute only requires an application to be processed based on those three pieces of information. Attempts to change that simplicity requirement have been unsuccessful, with several states’ applications for waivers to the USDA for the requirement being denied.
Potential for setbacks
Leighs told lawmakers that the state has made progress in achieving the new federal benchmarks. North Carolina’s payment error through August was 7.05 percent, “reflecting the great work of our counties,” he said.
But he warned that the new federal requirements could reverse that trend.
“One thing we have seen historically is that payment error rates have increased when there have been changes in policy,” he said.
The potential for counties to face financial penalties — or even lose the program entirely — adds urgency to the discussion. The program supports more than 1.4 million North Carolinians, including 600,000 children and 46,000 veterans, according to Leighs.
The loss or reduction of the program could be especially devastating for rural communities where SNAP is a crucial part of sustaining local grocery stores and families. Andy Ellen, president and general counsel of the N.C. Retail Merchants Association, told lawmakers that in some rural counties, up to a third of residents rely on SNAP to buy food.
“SNAP is not supplemental in many counties. It is what stabilizes your local food economy,” he said. “It’s what makes sure that grocery stores have the ability to stay open. About 84 percent of SNAP benefits are spent in grocery stores.”
Ellen cited statistics from the Piggly Wiggly grocery chain, which reports that for most stores, SNAP comprises between 20 percent and 35 percent of revenue.
“It drives predictable grocery and weekly traffic,” Ellen continued. “It is a key backbone of food access to rural North Carolina. It equals stable communities, stable jobs, stable local economies.”While no final decisions have been made on what strategies the state and the counties will use to approach the new federal requirements, the NC Association of County Directors of Social Services has established a committee to discuss implementation. The committee will look for ways to reduce administrative complexities, streamline implementation of the work requirements and compliance rules, and support counties in administration.
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