Complete Colorado

Taxpayers on the hook for Colorado’s food stamp error rate

For the first time since the Great Recession, 1 in 10 Coloradans are enrolled in the Supplemental Nutrition Assistance Program (SNAP), more commonly known as food stamps. The federally subsidized program provides families below a government-established income level with food benefits to help with grocery bills. Starting in October of 2027, Colorado will begin paying a share of these benefits due to the One Big Beautiful Bill Act. The amount taxpayers will owe depends on how many people participate in SNAP and how accurately the state processes them, both of which are growing issues for Colorado.  

Fiscal Year  SNAP Persons Enrolled  Colorado Total Population  Enrollment Share  Unemployment Rate 
2020  483,097  5,775,326  8.36%  6.8% 
2021  513,945  5,814,368  8.84%  5.5% 
2022  540,303  5,853,355  9.23%  3.1% 
2023  564,020  5,912,240  9.54%  3.3% 
2024  584,470  5,988,502  9.76%  4.1% 
2025  612,659  6,012,561  10.19%  4.0% 
Compound Annual Growth Rate   

4.87% 

 

0.81% 

   

Rising enrollment

Between 2020 and 2025, SNAP enrollment grew more than six times faster than Colorado’s population, increasing at an average annual rate of 4.87%, compared to 0.81% for the state overall. 

Like most states, SNAP participation increased during and shortly after the COVID-19 pandemic. The difference is that Colorado enrollment continued to climb after the pandemic from 2023 to 2025, even when state unemployment hit lows of 3.1% in 2022.

SNAP participation would be expected to decrease as more people find jobs, so why wasn’t that the case here? 

The most plausible explanation is Colorado’s rising cost of living. Denver-area prices have risen faster than the national average every year since 2014. Colorado has become a more expensive place to live, with many residents struggling to keep up.  

Another reason could be the administrative backlog that Colorado’s SNAP system has faced. During COVID, the system fell so far behind on processing applications that the federal government placed Colorado under corrective action. Basically, people who should have been rechecked for their SNAP application–and possibly removed–weren’t because the state hadn’t gotten to their file yet.  

The same strained bureaucracy that fell behind on rechecking eligibility also struggled to calculate the right benefit amounts. Before COVID, Colorado’s error rate was significantly lower. Error rates measure whether or not benefits provided to SNAP participants are accurate—not too high or too low. Colorado’s error rate has climbed steadily since then, from 7.31% in 2022 to 10.09% in 2025, with overpayments rising from 5.29% to 8.52%.

Taxpayers on the hook 

With states having to start paying a share of SNAP benefits according to the error rate, Colorado’s stands to take a hefty budget hit. 

Error Rate Range  % That State Pays for SNAP Benefits 
0% to under 6%  0% 
6% to under 8%  5% 
8% to under 10%  10% 
10% to 13.32%  15% 
Above 13.32%  Payment date gets pushed back 

One estimate from Jefferson County estimated that paying 10% of these benefits would cost the state $120-140 million per year. If Colorado were to pay 15%, which is what the share would be right now based on the current error rate, it would cost between $180-210 million per year. This is a conservative estimate. The costs will likely be higher if enrollment continues to trend upward. 

The good news is that every state can choose to use its error rate from either 2025 or 2026. Colorado can save tens of millions of dollars if it improves how accurately it processes SNAP benefits before the fiscal year ends. 

However, Colorado may already be trying to sidestep accountability for its high error rate. In 2025, lawmakers asked voters to bail out Healthy School Meals for All (HSMA)—the “free” school lunch program—by passing Proposition MM, which brought in new tax revenue from wealthier Coloradans. Voters approved it, but according to the legislature’s own budget analysts, more than half of that revenue could end up covering the state’s rising SNAP costs instead.   

Colorado voters may see this pattern again. A proposed graduated income tax measure, Initiative 195, is still gathering signatures for November’s ballot. Its own fiscal note already projects tens of millions of dollars flowing into the same HSMA fund that helped cover SNAP costs under Proposition MM. 

Before the fiscal year is up, the Colorado Department of Human Services and county offices must ensure their processing is accurate. Otherwise, the state will be locked into the 15% share bracket, worsening Colorado’s ongoing structural budget issues.

Colorado still has time to change course before that bracket locks in. The question is whether the state is up to the task. 

Logan McCahill studies economics and statistics at the University of Georgia. He is a fiscal policy research intern at Independence Institute, a free market think tank in Denver. 

SUPPORT LOCAL JOURNALISM

Our unofficial motto at Complete Colorado is “Always free, never fake, ” but annoyingly enough, our reporters, columnists and staff all want to be paid in actual US dollars rather than our preferred currency of pats on the back and a muttered kind word. Fact is we have an entire staff working every day to bring you the most timely and relevant political news (updated twice daily) aggregated from around the state, as well as top-notch original reporting and commentary.

PLEASE SUPPORT LOCAL JOURNALISM AND LADLE A LITTLE GRAVY ON THE CREW AT COMPLETE COLORADO. You’ll be giving to Independence Institute, the not-for-profit publisher of Complete Colorado, which makes your donation tax deductible. But rest assured that your giving will go specifically to the Complete Colorado news operation. Thanks for being a Complete Colorado reader, keep coming back.

LATEST VIDEOS

SUPPORT OUR SPONSOR

LATEST PODCASTS