Kentucky budget could take hit paying for SNAP under ‘Big, Beautiful Bill’

FRANKFORT, Ky. (FOX 56) — State lawmakers are preparing Kentucky’s next budget; it will be the big item of the 2026 session. However, next year, there is more to plan for to pay for SNAP after the recent changes brought by the One Big Beautiful Bill Act.

“Obviously, second year, as it stands currently, has the potential to have a significant impact to the budget,” Sen. Chris McDaniel (R-Ryland Heights) said Wednesday while chairing the Interim Joint Committee on Appropriations and Revenue.

Under the new law, the state’s share of SNAP’s administrative costs is going up from 50% to 75%; that’s about $50 million more the state has to come up with for the 2027 fiscal year and about $66 million more in the 2028 fiscal year. State Budget Director John Hicks explained to the committee that there are additional benefit costs that could fall on the state, too, which could be much more significant.

“We can’t think of another analogy where the federal government, which is providing 100% of a federally funded program, started to shift the cost to a state. And that’s what’s happened in the reconciliation act,” Hicks said.

$1.2 billion in SNAP benefits were paid to Kentuckians in 2024, all of that paid for by the federal government. Now, Kentucky could be liable for a share based on SNAP payment errors.

“There has been a SNAP payment error rate since there’s been SNAP,” Hicks explained. Department of Community-Based Services Commissioner Lesa Dennis explained that generally, payment errors are when the state over or underpays a recipient due to some kind of clerical error, either by the agency or household. She said household income and shelter deductions are the areas where payment errors occur most often and explained the correction process.

6% is the magic number. Depending on the percentage of errors reported by the state anywhere from $0 to $187 million could fall on Kentucky taxpayers, based on 2024’s numbers.

While Kentucky has remained below the national average in SNAP payment errors since 2019, for the past two years, Kentucky has reported a high enough error rate (7.27% in 2023 and 9.11% in 2024) that the state would have had to chip in under this bill. 2025’s error rate is currently averaged to 3.7%, but the final number won’t be known until next summer, after the budget is passed.

“Will you be in a place of comfort when we go to draft a budget to say, ‘hey, we’re pretty confident our error rate will be below this.’ And so, the impact might not be as severe in that second year,” McDaniel asked.

“I think that’s hard for us to say,” Dennis said.