PROVIDENCE, R.I. — Rhode Island is spending millions to correct mistakes in its food-stamp program, but a provision in a new federal law has created an unintended consequence: by reducing errors enough to fall below a political cutoff, the state could trigger an estimated $51 million annual charge as early as 2028.
How the penalty is determined
The rules stem from the so-called Big Beautiful Bill Act signed last year. For the first time, the law requires states to share part of the cost of the Supplemental Nutrition Assistance Program — SNAP, commonly known as food stamps — based on each state's payment error rate, or PER, which measures how often benefit amounts are incorrect.
Under the new structure:
- States with PERs under 6% pay nothing.
- States with PERs above 10% face the largest penalties.
- States with PERs above 13.33% receive an additional year before penalties begin, a provision commonly called the "Alaska carveout."
Rhode Island's cumulative PER through March stood at 14.46%, according to data from the Rhode Island Department of Human Services (DHS). That level puts the state just above the carveout threshold, which would delay any payment requirement until 2029. If the rate falls below 13.33% but stays above 10% during the federal measuring period, the state would face an estimated $51 million annual penalty beginning in 2028.
Timing and the narrow window
The federal measuring period ends on Sept. 30. Rhode Island has roughly six weeks left in that window to influence the cumulative error rate. The state's PER for the fiscal year that began last October had not dipped below 7.6% in any single month through March, DHS data show, indicating the state is far from the 6% target required to avoid penalties altogether.
That timing places state officials in a difficult position. Continuing to invest in error corrections could reduce the PER enough to lose the carveout and trigger a large payment earlier. Conversely, leaving error rates high would postpone the cost but keep program mistakes affecting recipients.
What the carveout means
The carveout — informally named for its role in securing a critical vote from Alaska's U.S. Sen. Lisa Murkowski — was meant to give states with the highest error rates more time to improve program administration. It is not limited to Alaska, however, and Rhode Island currently falls within its scope.
| PER threshold | Consequence |
|---|---|
| < 6% | No state payment |
| 10% - 13.33% | Largest penalty begins (estimated $51M for RI) |
| > 13.33% | One-year delay before penalties (Alaska carveout) |
Officials did not suggest that the carveout was designed with any particular state in mind; it was a legislative compromise to secure votes. But the result is a narrow mathematical line that can have huge budgetary implications for a small state.
Local impact and choices ahead
For Rhode Islanders, the stakes are practical: penalties would effectively shift part of the federal bill for SNAP onto state taxpayers, potentially squeezing other budget priorities. Meanwhile, high error rates mean eligible households may receive incorrect benefit amounts — either too much or not enough — creating hardships for low-income families that rely on SNAP to put food on the table.
State leaders have about six weeks before the measuring period closes to influence the cumulative figure. Options facing officials include:
- Continue intensive remediation efforts to lower the error rate, accepting the risk that crossing below the carveout could prompt the $51 million penalty in 2028.
- Temporarily prioritize administrative approaches that stabilize the cumulative rate above the carveout threshold to buy an additional year to correct systemic issues without immediate penalties.
- Pursue policy or legislative remedies at the federal level to adjust how the PER is computed or to seek exceptions.
State budget officials have not publicly outlined a final strategy tied to the Sept. 30 cutoff. The DHS provided the error-rate data that highlight the narrow margin and the potential fiscal outcome.
What it would take to avoid payments entirely
To eliminate any risk of a state payment under the new law, Rhode Island would need to sustain a PER below 6% for a full year — an objective that, based on DHS monthly figures through March, has not been achieved this fiscal year. That reality underscores the scale of administrative improvement required to fully shield the state from financial liability under the new federal framework.
The coming weeks will reveal whether the state crosses a politically consequential line in an unusual policy dilemma: reduce program errors and potentially accelerate a costly state payment, or delay the timetable for payments while allowing existing mistakes to persist for longer.
Priya Nair is the state correspondent covering Providence and state government for WE NEWS.
