The failure to accurately administer food stamps will bizarrely spare Oregon millions while other states must pony up next year.

By Penny Rosenberg/Oregon Journalism Project

For a good part of the past decade, Oregon’s food stamp program has had one of the highest error rates in the nation; that is, it distributed too many (or too few) benefits to low-income Oregonians.

Starting next year, President Trump’s One Big Beautiful Bill Act requires that states with a high error rate in the federal Supplemental Nutrition Assistance Program will soon have to shoulder some of that program’s costs.

But thanks to a bizarre loophole, Oregon, which last year had the seventh-worst error rate in the country, will not be burdened with this penalty, at least not for one year. Meanwhile, states with slightly lower error rates, like California, will be on the hook for hundreds of millions of dollars.

The spending bill, passed by Congress and signed into law by President Trump on July 4, 2025, will start charging states that are sloppy in the way they distribute SNAP benefits—but paradoxically, not if they have an error rate higher than 13.32%.

Oregon’s rate is 14.1%, which means it will avoid paying an estimated $185 million. (As of July, about 15% of Oregonians, or 636,427 people, got SNAP benefits.)

Why is Oregon getting rewarded despite its high error rate? The short answer is, Alaska.

To get One Big Beautiful Bill passed, Trump needed the support of Republican Alaska Sen. Lisa Murkowski. And Alaska has consistently had the highest error rate in the SNAP program; in the most recent year, its error rate was more than 20%.

So the senior senator tied her support for the bill to whether Republicans agreed to give states with the worst error rates (anything more than 13.32% in the most recent year) a one-year pass.

In other words, the consequences match the financial offense, unless the offense was really bad, in which case the worst offenders—Oregon, Alaska, four other states, and the District of Columbia—get to skate for one year.

Libertarian think tank the Cato Institute believes the “carve-out” has incentivized states to keep their error rates high.

“These loopholes have broader consequences,” a March Cato blog says. The new requirements “also risk penalizing states with transparent quality control processes while rewarding those who game the system by underreporting improper payments.”

Oregon state Rep. Anna Scharf (R-Amity) agrees that states should be on the hook when they have a higher error rate: “State agencies need to do better and quit asking for more people and more money as the only solution to problems,” she said in an email.

Asked why Oregon’s error rate has exceeded the national average for eight straight years, the Oregon Department of Human Services said the blame lies, for the most part, with applicants. The agency did its own analysis of the reasons for the most current error rate, and it concluded two-thirds of errors were the fault of end users, while state employees were responsible for the rest.

DHS spokeswoman Sara Campos told OJP that SNAP applicants erred most when reporting their earned income.

But Oregonians don’t apply for benefits in a vacuum. The process includes a 45-minute interview with a state employee to review the forms and determine if the applicant qualifies, along with help centers and call lines for follow-ups.

Campos says the agency is developing better training that specifically addresses common errors, pairing it with analytics to identify higher-risk cases for additional review.

Scharf has her doubts. She’s frustrated that state officials opted to build their own diagnostic tool instead of relying on an AI program other states are using. It’s offered by data software giant SAS, and states like Nevada, West Virginia and Florida have signed up, according to published reports.

“We all know how great Oregon’s track record is on IT projects, so I am skeptical,” she says.

If Oregon’s error rate remains above 13.32%, it will get a pass for a second year, again exploiting the odd loophole. But starting Oct. 1, 2029, the state won’t be allowed to evade the penalty. For the feds to continue fully funding SNAP, Oregon must bring its error rate down more than 8 percentage points, a prospect Scharf finds daunting.

“While I agree that more time could help, I wonder if Oregon would even be able to meet that,” she says.

In anticipation of the higher financial stakes, the Oregon Legislature in the 2026 short session approved hiring nearly 400 more employees to work at DHS.

This story was produced by the Oregon Journalism Project, a nonprofit investigative newsroom for the state of Oregon and is used with permission.