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The costs to Illinois’ government because of the new
Republican congressional budget reconciliation law will be steep.

However, the state has some time to prepare itself, and
possible Democratic gains in the U.S. House and Senate next year might be able
to reverse or mitigate some of the steepest cuts to food security and health care
programs before the vast majority of them take effect after the 2026
elections.

In the interim, Gov. JB Pritzker could also lower some of
the state’s direct fiscal impact with a big administrative effort – a fact that
has been glossed over in pretty much all news coverage so far.

Without substantial changes to the state’s administration,
Illinois’ share of increased mandated costs for the Supplemental Nutrition
Assistance Program might total $788 million a year – money the state clearly
does not have.

Pritzker claimed last month that the SNAP proposal would
cost Illinois $1.2 billion a year, but his projection was based on the U.S.
House’s proposal. The Senate version, which passed the House, scaled back
that number.

The reductions don’t begin until the 2028 federal fiscal
year (which starts Oct. 1, 2027), so the state has a chance in the meantime to
improve matters on its end, and that effective date is almost a year after the
2026 midterm elections.

If current trends continue, Illinois will have to pay 15% of
the total SNAP benefit costs, which, according to the governor’s office, would
be $705 million a year.

The reason the state is on the hook for 15% of benefit costs
is because of its high SNAP payment error rate, which stood at 11.56% in fiscal
year 2024, according to the U.S. Department of Agriculture. The state’s
error rates for underpayments to SNAP beneficiaries was less than 1%, but its
overpayment error rate was 10.6%.

The new federal law requires that states with SNAP payment
error rates of 10% or higher must pay 15% of SNAP benefit costs. The state
will struggle mightily to afford that, so lots of people may lose their food
aid if things don’t change.

Eleven states, including New York and New Jersey plus the
District of Columbia, had higher error rates than Illinois, but 38 had lower
error rates.

If Illinois could reduce its error rate to above 8% but
below 10% – on par with states like Michigan, Ohio and Texas – then it would
pay 10% of benefit costs, or $470 million a year.

Reducing Illinois’ error rate to a recent 15-year average of
what the Food Resource and Action Center says was 7.1%, would make its annual
penalty 5% of benefit costs – or $235 million a year.

And if Pritzker’s administration could decrease the error
rate below 6%, then the state would face no additional state penalties at
all.

Illinois achieved those lower error rates five times between
2011 and 2017. Eight smaller states, including Wisconsin, had error rates
below 6% in FY24.

Unless the law is changed, reducing the error rate has to be
done or it’s going to eventually cost the state a fortune and/or result in huge
numbers of people missing out on aid.

Pritzker frequently touts his administrative prowess, so
this gives him a measurable opportunity to prove it. But he doesn’t have
much time because the first increased SNAP payment will be based on the state’s
performance during federal fiscal year 2026, which begins this
October. The state needs an all-hands-on deck approach to this problem.

The new law also requires states to pick up the tab for 75%
of SNAP administration expenses, which will cost the state an extra $83 million
a year, according to the Greater Chicago Food Depository. States currently
pay half the expenses.

However, regardless of Illinois’ error rate, the state’s
SNAP outlay could very well be lower than $708 million because the new federal
law will likely result in significantly fewer SNAP recipients, mainly due to
work requirements. If history is any guide, up to a quarter of recipients
could lose some or all of their benefits without any actual corresponding
increase in employment.

Illinois will have to work hard to make sure people don’t
fall through the paperwork cracks, but that will also mean it’ll cost the state
more money to pay a portion of their benefits unless it manages to get its
error rate under control.