State may be on the hook for partial SNAP funding

By Laura Robertson

The federal budget bill before Congress, known as the “One Big Beautiful Bill Act” passed the House of Representatives on May 22, including cuts to the Supplemental Nutrition Assistance Program, that about 3,530 people in the Nome Census Area rely on.
If the budget bill is passed by the Senate without addressing SNAP cuts, some of the costs of the program will be passed on to states. If it becomes law, Alaska could be on the hook for tens of millions of dollars.
“I think a majority of legislators would want to backfill some or all of the lost SNAP federal revenues,” said Representative Neal Foster. “The hard question is where would we get the money to backfill the hole when we are already struggling with deficits?”
The federal budget bill would require states to pay between 5 and 25 percent of SNAP benefits, with the percentage rising along with the state’s SNAP “payment error rate,” which measures overpayments and underpayments of benefits compared to federally determined eligibility.
Alaska’s error rate is the highest in the country, at over 60 percent in 2023. Almost all of that was overpayments. For several years, the state has been dealing with a backlog of SNAP applications, and to get through them, allowed people to retain their benefits for an extra period of time beyond federal regulations while they processed applications. That decision means the state has an error rate around five times the national average.
That high error rate means the state could be paying the highest possible percentage to fund the program in Alaska. States with error rates of 10 percent or more would be responsible for the full 25 percent benefit cost share, according to a document provided from the Federal Funds Information from States.
Alaska received $250.8 million in SNAP benefits in 2024. At a 25 percent rate, the state would need to pay $62.7 million. There would be an additional $6 million in administrative costs, bringing the total cost up to $68 million, according to FFIS.
The state is already in a deficit due to declining oil revenue. Foster estimated that between the current year and next year, the state would have a $440 million deficit.
Money for SNAP could come from three places: savings, new revenue, or the PFD, explained Foster. Each of these options comes with challenges.
“Further complicating things is the fact that SNAP may not be the only thing the federal government cuts,” said Foster. “They could also cut Medicaid, and that could require hundreds of millions of dollars to backfill.”
Foster said while the desire to backfill SNAP will be there, funding it will be extremely difficult and will require “raiding funds.” He said he could see a partial backfill of SNAP occurring.
Next, the bill will move to the U.S. Senate.
The Nome Nugget reached out to Alaska senators Lisa Murkowski and Dan Sullivan for comment.
“Senator Sullivan believes SNAP is a critical lifeline for low-income families in Alaska, especially in rural communities where the high cost of living far outpaces the rest of the country,” said a spokesperson for Senator Dan Sullivan. “Alaska’s vast size and many remote communities create unique challenges in administering the program here, resulting in higher error rates. Senator Sullivan and his team have been working with the state to address this error rate. We are also working to ensure any changes to SNAP in the reconciliation bill take Alaskan’s unique needs into account and continue to deliver benefits to eligible Alaskans.”
“My team and I are still analyzing the text of the bill, but the House included provisions Alaskans should be excited about, including those that maintain lower taxes, bolster our Coast Guard, facilitate responsible resource development in the state, and extend the Secure Rural Schools program,” said Murkowski.
“There’s still a long way to go in the process, and I’m focused on ensuring that Alaskans don’t lose access to healthcare coverage or SNAP benefits, that we do better by clean energy developments, and that we do as much as we can to restore resource development in Alaska as we carry out our work in the Senate,” said Murkowski.
According to the latest Census data from 2022, a third of Nome Census Area residents receive SNAP benefits.
Kyle Ross, a policy analyst at the nonpartisan Center for American Progress, created a map of counties in the U.S. where potential cuts to SNAP would harm grocery and food businesses most, with the Nome area falling into the “higher risk” category. He explained that if a grocery store were to close after losing SNAP customers, that would hurt all of the customers.
“This would represent a fundamental shift in how SNAP would work and would operate,” said Ross. “For over around 50 years in its existence, nothing like this has happened.”