The headlines coming out of the Omnibus Budget Reconciliation Act - or the One Big Beautiful Bill Act - or whatever you want to call it – have been centered squarely on cuts to SNAP and Medicaid. For New Mexico, this causes worries at many levels.
On the Medicaid front, in a state where more than 7 out of 10 babies are delivered under Medicaid, and an already stressed rural healthcare infrastructure copes with sparse resources to support high-risk populations, this legislation weighs heavily on elected officials, healthcare providers and patients.
But an article out this week in The Economist places New Mexico at ground zero for the brunt of the SNAP fallout. One in five New Mexicans is enrolled in SNAP, the highest rate in the nation. The Economist's feature opens at a Santa Fe food bank, pointing out that monthly SNAP benefits last for five days in our beautiful but expensive capital.
Under this legislation, states will pick up 75% of the administrative costs for SNAP, as opposed to the 50% they cover today. This could lead to staff cuts and service delays.
A detail that The Economist piece explains well is that the SNAP benefit costs will revert to the states on a sliding scale based on the states' error rates: States with error rates below 6% will have no cost share; states with error rates between 6%-8% will be assessed 5% of the benefit costs; error rates between 8%-10% will result in a levy of 10% of SNAP benefit costs; and error rates greater than 10% will be charged 15% of SNAP benefit costs.
These rates are calculated by the USDA, which administers SNAP at the Federal level. According to USDA records, for fiscal year 2024, New Mexico had the fifth highest error rate in the nation. Only eight states are diligent enough to have no cost share.
The Economist cites losses in Federal SNAP funding to New Mexico between $224 million and $352 million in the first year alone, along with 60,000 residents losing SNAP eligibility.
This is not the first time New Mexico has faced a challenge with SNAP administration. It's just that our administrative challenges have generally been homegrown.
New Mexico's Human Services Department (HSD), which was responsible for administering SNAP and Medicaid benefits in the state until recently, has been the subject of lawsuits over its timely and competent delivery of these benefits dating back to 1988. In 2016, a special master was assigned to ensure HSD personnel complied with program rules after a Federal judge found, among other violations, that state employees were changing information on applications at the direction of supervisors to avoid expedited processing of SNAP applications.
New Mexico's SNAP program has continued to struggle. Now administered by the New Mexico Health Care Authority (HCA), application backlog numbers reached 17,000 at the time of the 2016 Federal court hearing, surged during the pandemic, and spiked again as pandemic assistance programs wound down. The application backlog was as high as 18,000 as recently as Spring 2024 but dropped six months later to negligible numbers and a 15-day window for processing.
The message Congress is sending the states is clear: Clean up your SNAP administration or start paying for it. New Mexico's dilemma is clear: With a 50% administrative cost share increase, reduce the error rate, or get stuck with 15% of benefit costs.
This math brings pain on both sides of the equation. If the state attempts to remain cost neutral on the administrative side, the nearly four decades of previous performance does not portend a good outcome with regard to error rate reduction on the benefits cost share side. Simply put, we're not good at managing SNAP for a population clearly in need of food assistance.
The law prevents states from reducing benefits or eliminating categories of beneficiaries through their own orders or legislation. So, if errors cannot be reduced, New Mexico will have no choice but to find the money to fund 15% of benefit costs on top of the increased administrative burden.
This requirement will begin in 2028, giving the state a little bit of runway to figure out how to find the cash. Will it result in a new tax burden at the state level? It's unlikely the state will grow much richer in the next two and a half years.
It's a shame that the shock this legislation is dropping on states is hitting New Mexico with a double punch. Endemic poverty is a great sadness of our state. A greater sadness is the poor treatment of our most vulnerable residents.
Merritt Hamilton Allen is a PR executive and former Navy officer. She appeared regularly as a panelist on NM PBS and is a frequent guest on News Radio KKOB. A Republican for 36 years, she became an independent upon reading the 2024 Republican platform. She lives amicably with her Democratic husband north of I-40 where they run one head of dog, and one of cat. She can be reached at
