‘We have to juggle other things’: NC counties will have to absorb new SNAP costs without state funding

By Ashley Fredde

Scotland County Manager April Snead spent this year’s budget season outlining the kinds of tradeoffs that local governments face every spring: which capital projects can move forward, which can wait and how to stretch taxpayer dollars. 

This year, another unexpected expense landed on the ledger.

Beginning Oct. 1, North Carolina counties will start to shoulder millions of dollars in additional administrative costs to operate the Supplemental Nutrition Assistance Program, or SNAP. Congress shifted more responsibility for administering the program to states through the One Big Beautiful Bill Act (H.R. 1) passed in 2025.

In North Carolina — one of 10 states where counties administer SNAP — that shift from paying 50 percent of the costs to paying 75 percent will fall to local governments.

County leaders started searching the proverbial couch cushions for extra dollars, hoping the General Assembly would absorb an estimated $52 million in new administrative costs for at least the first year. That funding, however, did not appear in the final state budget that was signed into law by Gov. Josh Stein on July 7.

“We always think it’s unfortunate when a mandated program gets funding cut,” Snead said. “The county also always has to make up for that funding, and we do that the best way we can. We juggle other things in the budget.

“It’s not easy. It can become a burden on our taxpayers. We have to have the revenue to run mandated programs.”

The funding shift arrives just as counties prepare for new work requirements, more frequent eligibility reviews and increased pressure to reduce payment errors in the federal program — changes local officials say require more staff, not fewer.

Counties expected help that never came

For months, county leaders urged lawmakers to appropriate the funds to cover the additional administrative costs, arguing that the changes represented a state responsibility for a federally funded program. 

Andrew Blackburn, governmental affairs director for the North Carolina Association of County Commissioners, said the organization met repeatedly with legislative leaders, budget writers and health committee chairs before the budget was released on June 30. 

“We had a lot of positive conversations, a lot of understanding that the counties were not financially positioned to take on the debt,” Blackburn said.  “But I would also say that every person we talked to pointed out to us that this state budget was going to look a lot different from previous state budgets, that there was not as much revenue available to the state as in previous budgets.”

He said county leaders understood this year’s budget would be tighter than recent years and were never guaranteed funding, but they remained hopeful after what Blackburn described as productive conversations. 

“Quite frankly, we’re a little disappointed that the counties were not offered any help in defraying those expenses,” added Joy Hicks, North Carolina Association of County Commissioners director of advocacy and policy. “I almost had an optimism, because we had such strong support from the health chairs themselves.” 

Sen. Jim Burgin (R-Angier), a Senate Health Committee chairman, confirmed that lawmakers had “a good healthy discussion” on helping counties shoulder the costs. He said that some of those discussions included targeting assistance toward smaller rural counties if the state could not afford to help every county. 

“Since we weren’t going to help everybody. We weren’t going to help Wake and Mecklenburg. What about Bertie? Some of the small counties where a penny of their tax rate is only a few thousand dollars and it’s real hard,” Burgin told NC Health News. 

With the state spending plan being released on June 30 and county spending plans due on July 1, some counties may have been left scrambling and wondering who would be left holding the bag. 

New federal rules mean more work — and higher stakes

The additional costs come as county social services departments prepare for one of the biggest overhauls to SNAP in years. H.R.1 expands work requirements, increases the requirements for eligibility verification, requires more frequent recertifications and places greater emphasis on reducing payment errors. 

The state budget included several investments intended to improve SNAP administration, including:

• $70,943 ongoing — Update the NC FAST benefits eligibility system to implement SNAP eligibility changes and reduce payment errors.
• $2.5 million one-time funding — Modernize NC FAST, including AI-assisted eligibility tools and error screening; up to $1.5 million may be used for a contract with the Government Data Analytics Center.
• $2,176,198 recurring — Hire 25 positions in the Division of Child and Family Well-Being (part of the Department of Health and Human Services) to reduce SNAP payment errors, including county quality leads, quality control analysts, policy staff, trainers and data analysts.
• $611,170 annually — Hire seven regional Continuous Quality Improvement training specialists to support county social services departments administering SNAP.
• Vendor funding (one-time only) — Produce reports on SNAP and welfare expenditures, including out-of-state benefit use and spending by retailer type.

The investments are targeted toward improving insights around errors and payments, but they do not replace the local administrative funding the counties had hoped for. Blackburn noted that North Carolina has already reduced its SNAP payment error rate from above 10 percent to just above 7 percent.

Error rates in fiscal year 2026 will be used to calculate new federal penalties states will pay tied to their payment error rate, beginning in fiscal year 2028. 

States that erroneously pay out benefits totalling more than 10 percent of total cost or more could be responsible for 15 percent of benefit payouts. Since North Carolina’s annual SNAP benefit total is about $2.8 billion, a 15 percent cost share could cost the state as much as $420 million — so state lawmakers are determined to drive down errors in the program.

While the state hasn’t reached its goal, Blackburn noted that the decrease was the country’s third largest decrease in error rates in a year. 

“That is thanks to the herculean efforts of these individual counties working together with the State Department of Health and Human Services to make that happen,” Blackburn said. 

But that herculean effort will become a bigger lift as staff continue to work to decrease the payment errors on top of increased applications and new eligibility rules — with the hefty $420 million price tag hanging over county officials’ heads.

“We’ve been making the argument to the General Assembly leadership and budget chairs that if the state could have taken that $52 million burden off of the counties, they would have been just that much better prepared to do that, and now we have to try and do that with less resources at our disposal,” Blackburn said. 

Rep. Maria Cervania (D-Cary) said during last week’s budget floor debate that lawmakers are asking state and county agencies to do more while reducing administrative capacity. She pointed to the elimination of more than 360 vacant central management and support positions from the Department of Health and Human Services. It’s the budget’s largest elimination of vacancies in one department while reducing the division’s net appropriations by more than $35 million.

“This is not efficiency. This is setting up our state and county services to fail,” Cervania said. “And when they fail, it’s not politicians who suffer the consequences, it is our seniors waiting for Medicaid approval. It is the child whose family depends on SNAP to feed that child, and not go starving. It is the person with disabilities waiting for services. It is the county social worker that’s trying to do the work of three people.”

Rural counties feel the squeeze

The financial impact of the new SNAP costs varies widely across North Carolina. In Halifax County, which has a $64.8 million general fund budget, SNAP administrative costs could total about $2 million, according to the NC Budget & Tax Center. 

In Bladen County, where one fifth of residents rely on SNAP, county commissioners in January had been considering delaying infrastructure upgrades or cutting services, but state lawmakers who represent the county secured a budget provision covering the county’s SNAP administrative costs for this year. County Manager Sam Croom said he was thankful that the local delegation secured the funding, but the uncertainty returns next year. 

“If they don’t fund it next year, then we would have to absorb that cost going forward,” Croom said.

“Altogether it’s not quite 1 percent of the budget, but with inflation, that’s our number one driver, with inflation roughly running 4 percent year after year after year,” he said. “It affects everything from contracted services that we have, to new purchases, to purchases for new ambulances, new sheriff’s cars. Health insurance going up. Anytime that you keep tacking on almost $400,000 along with the 4 percent inflation, it gets really tight, especially on the local level.”

Wealthier counties such as Union have started retraining staff, educating participants about the looming eligibility changes and requesting more personnel to prepare for the increased workload. 

Hicks said that many rural counties are already facing rising health insurance costs in the State Health Plan, which many counties use to cover their employees. There are also increased costs due to inflation, workforce shortages and debates over limiting property tax growth. 

“We were really thinking about double and triple whammies, if you will, of unfunded mandates coming down to the county,” Hicks said.  

“If they are a small rural county that doesn’t have a lot of occupancy tax or sales tax base, the biggest and almost only place for them to turn is to property tax,” she said. “No county commissioner ever wants to raise property tax rates, but — particularly if they’re a growing county — they need to meet growing population demands of things like water, sewer, additional public safety, build new schools.” 

Croom noted that Bladen County was among those who rely heavily on property taxes and that county officials were waiting to see what happens with a referendum on the November ballot that would allow the state legislature to cap increases on county property tax levies. 

“Even with increased property values, our tax base is still small, and so we have to really manage every dollar to make sure we’re good stewards of taxpayer money, because there’s only so much that our systems can afford,” Croom said. “The state government cannot cover costs, and they need us to help cover the costs for these programs, then naturally we always have to look at what programs we will provide.”

Administrative decisions affect families

Advocates say the story is not only about county budgets, but about the 1.4 million North Carolinians who receive SNAP benefits — many of whom (66%) are families with children or (34%) families with a disabled adult or senior, and how quickly they can get benefits. 

Andrew Harrell of the Carolina Hunger Initiative said more frequent recertifications and additional paperwork create more ways for eligible families to lose benefits or fall through administrative cracks.

“On the family side, we’ve seen historically that these forms can be complicated or intimidating for families, and that alone can lead some to fall through the cracks by just not getting them completed or not being sure how,” Harrell said. “It’s more paperwork for nutrition teams, and it’s CEP (Community Eligibility Provision) schools being threatened from their universal meal programs because their eligibility might change with fewer automatically qualified students.”

The CEP program allows high-poverty schools and districts to provide breakfast and lunch at no charge to all students. North Carolina schools participating in the program have already seen about 60,000 fewer students automatically qualify for free school meals because fewer families are enrolled in SNAP, according to Harrell. 

Since H.R. 1 was enacted, about 105,000 fewer North Carolinians are getting SNAP benefits, according to the NC Budget & Tax Center. But that hunger doesn’t go away, it just looks to other sources such as food banks who report seeing increased need and longer lines. 

While lawmakers included approximately $9 million in the final budget to six regional food banks, the cost is not enough to make up for the total need. 

“If SNAP went away completely in North Carolina, the food banks would have to serve nine times as many meals to meet that need, which they say is just not feasible for the money and the logistics of finding the food,” Harrell said. “When we say something like one in five children in North Carolina is at risk of food insecurity, that kind of includes the programs that are already working. 

“When they go away, it’s not about finding new ways to feed that one in five. That number is going to grow.” 

That number can be seen in real examples shared by Sen. Val Applewhite (D-Fayetteville), a military veteran, who shared stories of active-duty spouses posting anonymously on Fort Bragg Facebook pages inquiring about food pantries to feed their children. 

Another risk is that as counties look to drive down their error rates, potential beneficiaries may end up waiting. While delayed applications are not counted in the federal payment error rate, advocates warn that the delay caused by administrative workloads has real impacts for those waiting. 

Looking ahead

The North Carolina Association of County Commissioners said it is still talking with federal partners about possible waivers and legislative changes ahead of the payment error rates going into effect in fiscal year 2028 (which begins in July 2027). Blackburn pointed to some states with an error rate at 13 percent or above getting waivers to extend the deadline.

“We have been making the case to them that North Carolina, who is doing such a good job bringing down our error rate despite all the disadvantages that we have, should not be left holding the bag,” Blackburn said. “We are doing everything we can and are successfully dropping our error rate, and there are other states who are not.”

Burgin said he also expects lawmakers to revisit the issue when they return to Raleigh later this year.

“The counties pretty much were already locked in because they had to have their budgets done,” Burgin told NC Health News. “So a lot of them had already made their decisions before. It’s just one of those things. I hope we revisit it. We’re going to go back into session in August and into September, and I plan on continuing to discuss it.”

He also said the debate has renewed conversations about whether North Carolina should centralize more SNAP administration rather than relying on counties — a change Burgin believes could improve efficiency while lowering costs, though some responsibilities would stay local.

For now, however, county governments are preparing to absorb a larger share of the cost of administering one of North Carolina’s largest anti-hunger programs, even as the demands placed on that system continue to grow.

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