This story has been updated to include additional comments from the USDA and the Maryland Department of Human Services.
In recent years, Maryland has reduced the administrative errors it makes when sending food assistance dollars to low-income families — but that success might cost the state in a year.
New federal data shows that Maryland slightly reduced what’s called the “payment error rate” from 13.64 in federal fiscal year 2024 to 13.08 in federal fiscal year 2025, according to an update this week.
While small, that .56 reduction is the line between Maryland paying more than $240 million under new cost-sharing requirements for the Supplemental Nutrition Assistance Program and qualifying for a yearlong grace period granted to states with higher error rates.
If the state had not improved, which is the goal for federal and state officials, based on last year’s figure of 13.64, the state would have qualified for the year delay.
It’s a “really perverse incentive,” according to Carolyn Vega, associate director of policy analysis for No Kid Hungry. “There’s almost an incentive to do worse,” she said. “If you don’t lower it below 13.33, then you can be off the hook for millions of dollars.”
The Trump administration and the Republican-controlled Congress plan to implement fiscal penalties for states that have high error rates starting in October 2027, to “ensure state waste comes with consequences,” according to a Wednesday statement from the U.S. Department of Agriculture.
ayment error rates are not measures of fraud, according to Maryland officials, but a measure of administrative errors on the state’s side, where SNAP recipients are either underpaid or overpaid in benefits they’re entitled to.
For states with error rates below 6.00, the federal government will cover the full costs to fund SNAP benefits, as it currently does for all states. But starting next year, states with error rates at 6.00 or higher will have to contribute to the costs, between 5%, 10% or 15% depending on how high the error rate is — to a certain point.
The year-extension language was a result of tense negotiations for H.R. 1 last year to get enough support from members of Congress to pass the budget reconciliation bill.
That provision allowed a carve out for states with payment error rates that — when multiplied by 1.5 — equal or are higher than 20. That formula gives states with very high payment error rates, such as Alaska with a 23.15 error rate, more time to improve. Some states could even see extensions of that delay until fiscal year 2030.
Because Maryland dropped its error rate from 13.64 to 13.08, the state no longer qualifies for the one year exemption that six other states and Washington, D.C., which all have higher error rates, will receive. Instead, the state is expected to pay for 15% of SNAP benefits.
“In FY 2025, Maryland issued roughly $209,000,000 in erroneous payments, equating to nearly $574,000 per day,” a USDA spokesperson said in a written comment Friday. “The residents of the state would be better served by leaders working with USDA to solve this issue rather than actively fighting to withhold data that would reduce this waste.”
The Maryland Department of Human Services disagrees with the characterization from the USDA, saying that amount of payment errors would be closer to $11 million based on estimates for fiscal year 2024. The department is working a 2025 update to that estimate.
State analysts project Maryland could be on the hook for at least $240 million just for the new cost-sharing requirements in 2027, with more on the way due to other provisions in H.R. 1.
That’s a big price tag for Maryland, which has had to make steep cuts to state programs over the last few years to offset anticipated budget shortfalls.
While some might be tempted to raise the error rate just enough to avoid the penalty next year, Maryland’s Acting Secretary for Human Services Stacy L. Rodgers, says the agency is “laser-focused” on bringing the error rate down.
“This notion of qualifying because the error rate is so high — that has not been the agenda,” said Rogers, who has led the department since April. “The agenda is to continue to bring the error rate down as quickly as we can by doing the work correctly, ensuring that people who are eligible for SNAP receive the benefit they are eligible for.”
The Moore administration has been working to bring down the error rate since 2023, when Maryland had the second highest in the nation at 35.56%, based off of 2022 data.
Maryland’s error rate has decreased annually since then, due to improvement in staffing levels, increased training for new personnel and streamlined administrative procedures to reduce how often the state pays families more than they’re entitled to, or under pays families that need food assistance most.
“We’ve cut our payment error rate by almost two thirds — that’s way ahead of a lot of other states,” said Webster Ye, chief of staff for Maryland’s Department of Human Services.
Maryland is one of more than 30 states subjected to the cost-share provision, which is why the National Governors Association is calling for Congress to delay the cost-sharing requirement for all states until 2030. That way, states can have more time to apply the changes outlined in HR 1, which was made more difficult by a federal shutdown and delayed guidance from federal officials, according to the association.
Advocates like Vega with No Kid Hungry agree.
“I think it’s really hard for Maryland that, based on their FY24 error rate, they would have been in that category of qualifying for a one-year exemption,” she said. “But they dropped it just enough that they don’t … All states should have the buffer time to do that well before they’re subject to these really harsh financial penalties.”
She said that states that don’t pay their share of the cost-sharing requirement could risk access to the remaining federal dollars that support SNAP benefits.
“That means losing out on … federal money that could flow into the state and support families, put food on the table for kids, support workers in grocery stores and throughout the food supply chain,” she said.
“It’s going to lead to some really challenging trade-offs for states to have to make, like Maryland,” she said. “We know it’s a big number and a lot of money to commit, but not doing it leads to even more dire consequences and trade-offs.”
