Kavanagh, Kupper Raise Alarms on SNAP Error Rate Penalties

Arizona SNAP Error Rate Could Cost State $208 Million As GOP Lawmakers Renew Accountability Push

PHOENIX — Arizona’s food stamp error rate has risen above the national average, creating the possibility of a $208 million federal penalty and giving Republican lawmakers new ammunition in their push for tighter oversight of public assistance programs. Just released figures from the U.S. Department of Agriculture (USDA) show Arizona posted a 10.8% payment error rate in the Supplemental Nutrition Assistance Program (SNAP) for the last federal fiscal year, higher than the national average of 10.6%. Arizona’s figure includes more than 8.6% in overpayments and nearly 2.2% in underpayments.

Arizona’s error rate is meaningful due to a provision in the 2025 federal budget bill, House Resolution HR1 (a.k.a. the “Big, Beautiful Bill”). Under the law, states with SNAP error rates of 6% or higher are required to pay a share of SNAP program costs. States, such as Arizona, with error rates above 10% could be required to pay 15% of benefit costs from state revenues. That program’s cost-sharing, which is being classified as a fine or penalty, would amount to $208M, payable in the 2027-2028 budget year.

For Republican lawmakers who spent the session pressing SNAP reform bills, the new number is likely to be cited as proof that Arizona needs stricter eligibility checks, better data matching, and more aggressive error reduction.

Sen. John Kavanagh (R-3) warned months ago that failing to reduce the error rate could become costly for taxpayers. Kavanagh sponsored legislation aimed at tightening SNAP eligibility verification by requiring enhanced data matching, closer monitoring of out-of-state Electronic Benefit Transfer card spending, and public reporting of fraud investigations and recovered funds.

“It attempts to get rid of errors and cheating on SNAP,” Kavanagh said earlier this year. “And, as we found out just recently, if we don’t do this, it’s gonna cost the state a lot more administrative money.”

Senate Republicans also advanced Kavanagh’s “Oh SNAP Act,” which would have required the state to reduce its SNAP payment error rate to 3% and submit quarterly progress reports to the Legislature. If the Department of Economic Security (DES) failed to meet interim or final targets, the bill would have triggered corrective action plans and an audit by the Auditor General.

“Arizonans work hard for every dollar they earn,” Kavanagh said when the Senate Republican anti-fraud package advanced. “They expect their government to do the same. When error rates climb, when fraud goes unchecked, and when work requirements are ignored, taxpayers foot the bill.”

Rep. Nick Kupper (R-25) pushed a similar House measure requiring DES to lower the SNAP payment error rate to 3% or lower by 2030. Hobbs vetoed the bill in February, saying DES had already taken steps to improve accuracy and that the legislation would duplicate those efforts while adding unfunded mandates to an already strained agency.

Kupper argued the target was realistic.

“For anyone who says, ‘Oh, 3%’s impossible,’ there are dozens of states that have been below 3% over the past two decades,” Kupper said during the debate over his bill. “So, this is not impossible.”

The Hobbs administration says the state is already working to address the problem. Capitol Media Services reported that the governor allocated $6.4 million in remaining COVID relief funds to hire more eligibility staff, and the new state budget includes $10.8 million in one-time funding for 146 DES positions. DES Director Michael Wisehart doesn’t agree with Hobbs. He claims that Arizona invests less than other states in eligibility determination.

The agency also reported that the number of employees reviewing food stamp eligibility dropped from 1,370 in July 2024 to 880 in July 2025, a decrease of over 35% in one year.

At the same time, DES has increased documentation requirements to prove eligibility, not only increasing the risk of errors, but also resulting in a dramatic drop in SNAP rolls, with more than 450,000 people losing benefits in the past year, including nearly 200,000 children. The loss of federal dollars through program attrition makes hiring more screeners that much more difficult.

Kavanagh, Kupper, and other Republican lawmakers see the 10.8% error rate as a problem of taxpayer accountability. But for Hobbs and social service advocates, the error rate is more a capacity problem inside an overburdened agency trying to comply with new federal rules.

Either way, the state has limited time to improve. Arizona could reduce or eliminate the projected penalty if it lowers its error rate for the current federal fiscal year, which ends Sept. 30, 2026. The official figure will not be released until 2027.