Federal Spending Bill Revisions to Impact North Carolina's SNAP Program

North Carolina --  A comprehensive federal spending bill, termed the "Big Beautiful Bill" by some, is set to introduce significant modifications to the Supplemental Nutrition Assistance Program (SNAP), with phased implementation affecting North Carolina's residents and state finances.

The legislation, signed into law on July 4, 2025, mandates structural changes to SNAP funding and eligibility criteria, departing from previous program structures.

Key Implementation Dates and Impacts:

Immediate Upon Enactment (July 2025): The SNAP-Ed program, which provided federal funding for nutrition education and obesity prevention initiatives, has been eliminated. This cessation directly impacts programs that support healthy food choices and community gardens in North Carolina.

November 1, 2025: Expanded work requirements for SNAP recipients will begin to apply. Individuals categorized as able-bodied adults aged 55 through 64 without dependent children, and parents of children aged 14 and older, will be required to work at least 20 hours per week or engage in approved training programs to maintain eligibility. Previous age limits for these requirements were lower. Exemptions for veterans, individuals experiencing homelessness, and former foster youth are also being curtailed. The full effect of these new work requirements on benefit receipt for some households is anticipated after February 2026.

October 1, 2026 (Beginning of Fiscal Year 2027): The federal-state cost-sharing model for SNAP administrative expenses will shift. The federal share of these costs will decrease, moving from a 50/50 split to a 25% federal and 75% state responsibility. This change significantly increases North Carolina's financial obligations for program administration.

October 1, 2027 (Beginning of Fiscal Year 2028): States will be required, for the first time in five decades, to contribute a portion of the actual SNAP food benefit costs. North Carolina's specific contribution will range from 5% to 25% of total benefits, determined by its payment error rate. North Carolina's 2024 payment error rate of 10.21% suggests a higher state contribution, with estimates ranging from $420 million (Senate version) to $700 million (House version) annually to maintain current SNAP benefit levels.

2028: States will begin to incur Payment Error Rate (PER) penalties, linked to the accuracy of eligibility determinations and benefit calculations within their SNAP programs.

Projected Consequences for North Carolina:

The implementation of these changes is anticipated to generate a range of effects across North Carolina:

Benefit Reductions and Eligibility Changes: Projections indicate that approximately 1.4 million North Carolinians, including an estimated 600,000 children, utilize SNAP benefits. The expanded work requirements alone could result in 255,000 individuals losing benefits. Overall, national estimates suggest 22.3 million US families could experience a reduction or loss of SNAP benefits.

Increased State Financial Burden: The shift in cost-sharing will place substantial new financial demands on North Carolina's state budget. Beyond the direct benefit cost share, the increased administrative costs for the state are estimated at an additional $14 million annually, with a further $65 million for counties. If the state does not allocate sufficient funds to cover these new costs, potential outcomes include reduced benefit amounts, restricted program enrollment, or, as a final measure, the cessation of the SNAP program within North Carolina.

Economic Impact: The reduction in federal funds, estimated at $2.8 billion annually, could translate to a $4.2 billion negative economic impact statewide. Economic projections forecast a loss of approximately 4,700 jobs in North Carolina, a decrease of $558 million in the state's Gross Domestic Product (GDP), and a reduction of almost $49 million in local tax revenue by 2026. Industries such as grocery, agriculture, manufacturing, and transportation may experience adverse effects.

Impact on Support Systems: Food banks, which currently provide a fraction of the meals supplied by SNAP, are not projected to be able to compensate for the anticipated reduction in food assistance. Rural grocery stores, often reliant on SNAP revenue, face potential closures, which could impact food access in underserved areas.

Child Nutrition and Vulnerable Populations: Over 500,000 children in North Carolina may no longer automatically qualify for school meal programs due to their household's altered SNAP eligibility. Additionally, changes to immigration-related eligibility may exclude certain groups who previously qualified for SNAP benefits.

North Carolina state agencies are currently assessing the full scope of the federal legislation's impact, as the state legislature will need to determine how to address the newly mandated financial responsibilities.

WNCTimes

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