Citing expected SNAP shortfall, Cannizzaro says any special session can’t ignore federal fallout

By April Corbin Girnus

Nevada Current

State administrators anticipate a $19 million budget shortfall next year for Nevada’s Supplemental Nutrition Assistance Program, better known as SNAP or food stamps.

The shortfall is being created by the One Big Beautiful Bill and should be addressed by state lawmakers if a special session is held later this year, Senate Majority Leader Nicole Cannizzaro said during an Interim Finance Committee meeting Wednesday.

Every month SNAP provides food assistance to around 505,000 Nevadans — 15.5 percent of the total population.

Nevada’s Division of Social Services (formerly known as Division of Welfare and Social Services) appeared before the legislative committee on Wednesday to request approximately $244,000 to address a current budget shortfall created by a new federal requirement that states pay the federal government to use an income verification system. Previously, the state did not have to pay for access to that system.

That immediate budget shortfall is minor in the scope of the overall state budget and was quickly covered Wednesday with reserve funding. But Cannizzaro emphasized the potential financial issues for Nevada SNAP are just beginning.

Starting Oct. 1 of next year, states will be required to pay 75 percent of the administrative costs for SNAP, up from the 50 percent they have been historically required to pay.

That means Nevada will need to come up with an additional $19 million to cover the cost of administering the program between Oct. 1, 2026 and June 30, 2027, Division of Social Services Administrator Robert Thompson told legislators.

Looking beyond the current fiscal biennium, the state can expect $25 million in additional administrative costs annually. At the same time, an estimated 130,000 Nevadans are at risk of losing benefits due to new requirements established in the One Big Beautiful Bill.

And Nevada could be on the hook for millions more in future years depending on its SNAP payment error rate.

The One Big Beautiful Bill requires states with error rates higher than 6 percent to pay for a percentage of the benefits people receive. Previously, the federal government covered all benefit costs.

Nevada’s Fiscal Year 2024 logged a 5.94 percent error rate, but the rate has fluctuated over previous years. Nevada was one of only eight states with a rate below 6 percent.

The state’s error rate is currently at 7 percent, according to Kelly Cantrelle, the deputy administrator who oversees SNAP. For that error rate, Nevada would be penalized by having to pay 5 percent of benefit costs.

Past data suggests that would be equivalent to $55 million annually, said Cantrelle. If the error rate were to rise, the state could wind up paying up to 15 percent of benefit costs.

All of that would be on top of the administrative costs already set to rise.

“We are working to get that error rate below 6 percent, of course,” Cantrelle added.

The Division of Social Services has already begun changing certain practices to try to avoid errors, including requiring case reviews twice a year instead of annually and adding additional verification requirements related to proof of shelter and utility expenses.

More than half of errors are “customer related,” according to Cantrelle. “Something they forgot to tell us. A piece of info they gave to us wasn’t accurate.”

The federal government “just moved the goal line on us,” she added.

Thompson told lawmakers that the agency intends to “stretch its resources” in anticipation of budget shortfalls but said there isn’t a lot of flexibility in their budget.

“We may have to let (employee) vacancy increase,” he said. “My office is scrutinizing every vacancy that comes forward, except for case managers.”

Salaries make up the bulk of the division’s budget, Thompson said, so “there is not another place in an agency like ours to be able to come up with that kind of money.”

Cannizzaro, who led lawmakers’ questioning about the impact of the One Big Beautiful Bill on SNAP, said the situation created by the federal legislation championed by President Donald Trump is “unfortunate and very disappointing.”

“Despite this legislature’s efforts over the last two legislative sessions, the last four years, to reduce (employee) vacancy rates, to increase salaries, to make sure we are taking care of state workers, to make sure they can do their job, we are not only going to ask them to do more, but we are going to leave these vacancies open in order to manage part of this shortfall,” she said.

Cannizzaro also briefly referenced reports about a possible special session this fall. Gov. Joe Lombardo last week told KTNV “the special session conversation is happening as we speak.” In that interview, Lombardo suggested a crime bill he proposed but that failed to pass earlier this year, as well as a revived film tax credit proposal, could be issues taken up in the session. But addressing the impact of federal funding cuts and changes could be put off until the next regular legislative session in 2027, Lombardo said.

“In whatever potential conversations about upcoming potential special sessions, there’s going to have to be action by this body for this biennium,” Cannizzaro said Wednesday.

Cannizzaro said federal policy changes have forced the state to bear an “untenable” burden despite having a history of “doing its job and doing it well.”

“At the end of the day we are going to be taking away services from the most needy Nevadans. We, as a legislature, are now going to have to go find $19 million in order to make sure these programs stay afloat. … And in future biennia, we are going to have to find $50 million each session to continue these programs.”

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April Corbin Girnus is an award-winning journalist and deputy editor of Nevada Current. A stickler about municipal boundary lines, April enjoys teaching people about unincorporated Clark County. She grew up in Sunrise Manor and currently resides in Paradise with her husband, three children and one mutt.