Counties throughout North Carolina are gearing up to adjust to changes outlined in HR 1, or the One Big Beautiful Bill, which will cost local counties hundreds of thousands of dollars. 

The bill mandates several changes to health and human services across the country, some of which have already gone into effect, and some of which will continue to roll out over the next several months.

One of HR 1’s significant changes is to the operation of the federal Food and Nutrition Assistance Program (SNAP).

Starting Oct. 1, reimbursement rates for SNAP administration costs will reduce from 50% to 25%, and starting October 2027, North Carolina could be responsible for paying $140 million in SNAP benefit costs for the first time in the program’s history.

Historically, the federal government has reimbursed 50% of any costs associated with SNAP program administration like labor cost for reviewing applications or managing IT infrastructure.

This changes in October, as HR 1 will require counties to cover 75% of these administrative costs. The state has not offered counties help to alleviate the burden of these shifting costs.

The reduction in SNAP reimbursement rates will cost the following counties in The Smoky Mountain News coverage area the following amounts annually:

  • $281,000 in Jackson County
  • $144,000 in Swain County
  • $237,000 in Macon County
  • $411,000 in Haywood County

“HR 1 doesn’t change who’s hungry in Swain County,” said Swain County Manager Tommy Dills. “It doesn’t change any of that. It just changes who pays for it.”

Dills is just one of many leaders in North Carolina local governments who now have to figure out how their counties will adjust to increasing cost.

North Carolina is just one of nine states in the U.S. that operates under a state-supervised, county-administered social services system. The majority of states have a state-administered system, which means county Departments of Social Services (DSS) are run and funded by a centralized state agency.

In North Carolina, each DSS office is an independent county-run agency, meaning county commissioners set their budgets and the state is responsible for disbursing the federal and grant funding each county claims.  

At an Aug. 4 Jackson County Board of Commissioners work session, Jackson County DSS Director Cris Weatherford gave a presentation to commissioners and said that of the nine state-mandated, county-administered states, North Carolina ranks lowest in terms of state funding to support its programs.

“The can is getting kicked ever increasingly to the county from our federal and state governments,” Weatherford said.

State error rates

Also at risk for North Carolina county governments is funding for SNAP benefits themselves.

Since its inception, the federal government has paid for 100% of SNAP benefit costs (this is the money that goes directly on EBT cards) and 50% of the program’s administration costs.

Starting Oct. 1, 2027, the federal government will stop covering 100% of SNAP benefits for the first time, and based on current estimates, North Carolinians could be responsible for paying $140 million in SNAP benefit costs according to the N.C. Budget and Tax Center and the U.S. Department of Agriculture.

Driven by HR 1, this change reflects increased focus on the “state error rate,” which evaluates how accurately states determine benefit eligibility and tracks the frequency of recipient underpayments and overpayments. An error is considered an under- or overpayment greater than $48, and Weatherford said something as small as a transposed number or a clerical oversite could lead an error.

Additionally, Weatherford warned that a FY 2025-2026 turnover rate of 34.4% in Jackson County plus low pay, little flexibility in hiring practices, and clunky, hard-to-use software could cause major financial penalties down the road if the county does not do more to invest in a strong workforce.

Overworked, underpaid, and undertrained employees are one factor contributing to the state error rate.

The Fiscal Year 2025 North Carolina state error rate was 7.36%. If that does not drop below 6% in FY 2026 across all 100 North Carolina counties, each county will have a proportion of their sales tax revenues garnished by the state to pay for SNAP benefits.

Even if a particular county in North Carolina has a 0% error rate, if the state does not average under 6%, all 100 counties will face a penalty. Counties with high error rates will face additional penalties.

In Swain County, for example, that penalty is estimated to cost around $190,000, and while Dills said Swain County will find a way to absorb the costs rather than reduce SNAP benefits, that $190,000 is no small number.

“In a county our size, $190,000 is a deputy, a paramedic, and the local match on a project our people have waited years for,” he said. “We will find it, because the obligation to serve our citizens does not move when the funding does, but our residents deserve a plain accounting of what happened. The federal government stepped back from a commitment it has kept since the program began, the state passed its share downward, and the county absorbed both.”

Compared to state and federal agencies, Dills noted, local counties have far fewer options to absorb that kind of financial shift.