Federal food assistance changes taking $95M bite out of Michigan budget

February 3, 2026

Michigan faces nearly $100 million in additional costs for administering the Supplemental Nutrition Assistance Program (SNAP) due to federal policy changes that shift financial responsibility from Washington to states. Beginning in October 2026, states must cover 75% of administrative costs instead of the current 50-50 split, affecting a program that serves 1. 4 million Michigan residents.

Who is affected

1.4 million Michigan residents receiving SNAP benefits
Michigan Department of Health and Human Services
Governor Gretchen Whitmer's administration
Michigan state lawmakers (Republican-led House and Democratic-led Senate)
All 50 state governments (only nine currently meet federal error thresholds)
State and local governments nationwide represented by the National Governors Association and National Conference of State Legislatures

What action is being taken

Gov. Gretchen Whitmer's administration is preparing budget recommendations (to be delivered Feb. 11)
Michigan lawmakers are preparing to enter budget negotiations for the next fiscal year
The Michigan Department of Health and Human Services is implementing initiatives to reduce error rates, including improvements to information technology and the MI Bridges benefits platform
Bipartisan groups including the National Governors Association and National Conference of State Legislatures are petitioning the federal government for delays
States are exploring making additional investments in SNAP administrative costs centered on reducing error rates

Why it matters

This represents a significant shift in federal-state fiscal responsibility that threatens the viability of food assistance programs nationwide. With Michigan's error rate at 9.53%—above the 6% federal threshold—the state faces potential penalties ranging from $160-481 million starting in fiscal year 2028, on top of the $95 million increase in administrative costs beginning October 2026. These changes arrive during an already challenging budget environment with $1 billion less revenue than anticipated, forcing difficult tradeoffs between covering increased costs, investing in system improvements to avoid future penalties, and funding other state priorities. The cumulative impact could jeopardize SNAP availability across the country if states cannot absorb these additional financial burdens.

What's next

Feb. 11: Whitmer administration scheduled to deliver budget recommendations to lawmakers at the state Capitol
Lawmakers will begin considering the governor's budget plan and craft their own proposals
October 2026: New 75%-25% cost-sharing arrangement takes effect for SNAP administrative costs
Fiscal year 2028: Federal penalties begin for states with SNAP error rates above 6%
Michigan Department of Health and Human Services aims to continue reducing error rates through ongoing IT and MI Bridges platform improvements
Potential fiscal year 2030: Delayed implementation timeline requested by state and local government groups

Read full article from source: bridgedetroit.com