Alabama appears to be successfully reducing the error rate for its Supplemental Nutrition Assistance Program (SNAP), a development that could substantially decrease a looming financial penalty for the state. Officials announced this promising trend Thursday morning, based on preliminary data.
According to SNAP Director Brandon Hardin, who spoke at a quarterly meeting of the Alabama Department of Human Resources (DHR) — the agency overseeing the program in the state — the Fiscal Year 2026 error rate has begun to fall. This improvement follows a challenging start to the fiscal year, which Hardin attributed to a 2025 government shutdown that negatively impacted initial numbers.
The One Big Beautiful Bill Act (OBBBA), passed last year, introduced a system of financial penalties for states with high error rates in their SNAP programs. Alabama’s error rate for Fiscal Year 2025 stood at 9.52%, a figure that could have cost the state up to $174.3 million, representing approximately 10% of the state’s total SNAP benefits.
However, new state data released Thursday morning indicates that the unofficial error rate through June for the current fiscal year has dropped to 7.89%. If this rate is maintained below 8%, the state’s penalty would be reduced to $87.1 million, or about 5% of SNAP benefits. Hardin highlighted the significant financial relief this reduction would provide, stating, "practically a $90 million savings if we can keep it underneath 8% going forward." The Food and Nutrition Service (FNS), an agency within the U.S. Department of Agriculture (USDA), is expected to finalize these numbers by next summer.
Hardin emphasized the critical nature of the SNAP program for residents and the broader economy. He noted that it is "a vital program for the nutritional needs of Alabamians," and that its economic impact extends to advocates and grocery stores. Hardin affirmed DHR's commitment to correcting error rates to minimize the state’s financial liability. It is important to clarify that these errors are not a measure of fraud; they can occur on the part of the client or the agency and may involve either under-issuance or overpayment of benefits. Penalties are determined by a tiered system based on the specific error rate.
The OBBBA also brought significant changes to the SNAP program, which was previously fully funded by the federal government. These changes have resulted in over 90,000 Alabamians being removed from SNAP, primarily due to new work requirements implemented by the Act. While Hardin stated that some individuals may be able to re-enroll if their circumstances change, he confirmed that the policies enacted by the OBBBA, including an increase in the age range for able-bodied adult dependents and the removal of certain exemptions, have contributed to a significant decrease in program participation. As of September, more than 638,000 Alabamians were enrolled in the $1.7 billion program.
DHR has actively sought waivers from the federal government in an attempt to further reduce the error rate penalty. One such waiver aimed to exempt the first three months of FY26 from the error rate calculation, as Hardin explained that this period, impacted by a government shutdown, was detrimental to the year’s average. The average error rate from October to November was 10.95%, significantly higher than the 6.48% average recorded from January to June. Hardin expressed optimism regarding these efforts, stating, "We’re continuing to work through that piece of it, and I think it looks great."
The penalty structure for future years involves additional complexities. The state’s penalty in 2027 will be based on the lower of the error rates between FY25 and FY26. However, the 2028 penalty will be determined solely by the FY26 error rate. States with error rates below 6% or above 20% are not subject to penalties, and penalties for states with high error rates will see a two-year delayed implementation. A potential solution, a two-year delayed implementation for all states, was proposed through the Farm Bill, which passed the House but has not yet received a vote in the Senate. Hardin expressed hope for action on this matter at the federal level, possibly in December, to gain more time.
Commissioner Nancy Buckner indicated that DHR plans to request sufficient funding from the Legislature in the spring to account for the larger potential penalty. This proactive measure is necessary because the final, federally approved error rate will not be determined until after lawmakers have adjourned. Buckner noted that while the unofficial rate is encouraging, its final confirmation is delayed by federal processing.
Budgeting for Fiscal Year 2028 is anticipated to be particularly challenging. Former Finance Director Bill Poole and Legislative Fiscal Officer Kirk Fulford have repeatedly cautioned state agencies, including DHR, to adopt conservative budgeting strategies.