THE STAKES ARE HIGH FOR MICHIGAN

The Cost of the Federal Republican Megabill:
FOOD ASSISTANCE

National Impact

The OBBBA cuts the Supplemental Nutrition Assistance Program (SNAP) by $186 billion (20%) through 2034 — the largest cut in SNAP history.

  • OBBBA forces massive costs onto states and blocks access to benefits with more red tape.
  • Cuts primarily affect seniors and families with children.
  • Cuts are achieved by:
    • Increasing states’ share of administrative costs from 50% to 75%, effective Oct. 1, 2026.
    • Establishing a state cost share for SNAP benefits, effective Oct. 1, 2027 — requires each state to pay 5%-15% of benefits based on state’s payment error rate.
    • Expands harsh and ineffective work requirement/time limit to nondisabled people ages 55-64 and nondisabled parents/caregivers of children 14 years old and older.*
    • Eliminates work requirement/time limit exemptions for veterans, unhoused people and youth aging out of foster care.*
    • Makes it more difficult for states to waive the work requirement/time limit in areas of high unemployment.*
    • Takes food assistance away from most lawfully present immigrants unless they are U.S. citizens or green card holders.*
    • Prohibits future SNAP benefit increases outside of inflation adjustments, regardless of changes to nutrition standards and purchasing patterns.
    • Eliminates all funding for SNAP-Ed, a program that connects SNAP families and schools to nutrition education, resources, and services, effective Oct. 1, 2025.

*Under the bill, these provisions take effect immediately, but the U.S. Department of Agriculture has not yet issued guidance on implementation to states. Thus, these provisions have not actually been put into practice yet.

Repercussions for Michigan

  • According to the Michigan Department of Health & Human Services, the state will face new annual costs of around $410 million, depending on caseloads: $90 million for the increased administrative cost share and $320 million for the new benefit cost share. 
    • That’s more than the state spends on psychiatric hospitals (see p. 126, sec. 112, Gross Appropriation), child support enforcement (see p. 122, sec. 103, Gross Appropriation), or the entire Department of Military and Veterans Affairs (see p. 298, Gross Appropriation).
    • Most states, including Michigan, will not be able to absorb such massive costs and will be faced with difficult choices:
      • Finding new revenue by raising taxes or cutting other services.
      • Narrowing eligibility criteria and creating new red tape to make benefits harder to access.
      • Opting out of SNAP altogether, if they cannot make their full required cost share.
  • An estimated 74,000 Michigan adults will be at risk of losing SNAP benefits because of the expanded work requirement: 39,000 ages 55-64, and 35,000 with children 14 years old and older. (See Table 1)
  • The SNAP cuts will shrink Michigan’s economy, impacting thousands of businesses and jobs across the state.
    • SNAP benefits pump about $3 billion a year into Michigan’s economy, with many of those dollars staying local.
    • SNAP benefits provide revenue for more than 9,200 Michigan retailers, including grocery stores, farmers markets and convenience stores.
    • Annually, SNAP supports:
      • More than 13,000 jobs in grocery and supporting industries like agriculture and transportation.
      • $1 billion in wages for workers in grocery and supporting industries.
      • $148 million in annual local, state and federal tax revenue.
      • Nearly $2 billion in total economic output.
  • Taking SNAP benefits away from families will harm their health and increase health care costs.
    • Michigan already faces $1.8 billion a year in additional, unnecessary health care costs due to hunger (see p. 13).
    • The SNAP cuts will exacerbate the health toll from OBBBA’s Medicaid cuts.
  • The SNAP cuts could have an outsized impact on food security, health and the economy in rural communities.
    • Of the 30 Michigan counties with the highest rates of SNAP participation, 26 are rural (see map).
    • In many small towns, SNAP dollars are key to the survival of independent grocery stores that keep their communities from becoming food deserts. The loss of this revenue could decrease food access for everyone.
  • Michigan will lose $33 million in federal dollars due to the elimination of SNAP-Ed funding (see p. 10). Currently, this money goes to Michigan State University Extension and the Michigan Fitness Foundation to work with community partners, Tribal Land Grant Colleges, and county governments to promote healthy eating and physical activity among families who use SNAP.
    • Michigan SNAP-Ed reaches nearly 414,000 people (see p. 42).
    • Michigan SNAP-Ed is linked to improved fruit and vegetable consumption, greater food security and increased physical activity for people of all ages. (see p. 42).
  • About 15,000 lawfully present immigrants in Michigan (see Table 2) will lose their SNAP eligibility. These include refugees, asylees and other people authorized to live in the U.S. based on humanitarian concerns.

 

 

Analysis provided by
Julie Cassidy, Senior Policy Analyst