Arizona's Food Stamp Error Rate Tops National Average, Putting Millions at Risk Under New Federal Rules

Arizona's food stamp program had an error rate of 10.8% in the 2025 federal fiscal year, according to the U.S. Department of Agriculture. That is slightly worse than the national rate of 10.6%, and under changes in the federal law known as the "Big Beautiful Bill Act," the figure could translate into significant financial penalties for the state.

Howard Fischer of Capitol Media Services discussed the numbers on KJZZ's The Show. He noted that the error rate counts both overpayments and underpayments and covers issues such as eligibility. Even so, he said, it is notable that roughly one in 10 cases contains a mistake.

The federal law sets a sliding scale. States with error rates above 6% must pay a share of benefit costs, which the federal government normally covers in full. The penalty is 5% for rates up to 8%, 10% for rates up to 10%, and 15% for anything higher. At 10.8%, Arizona falls in the top tier, and Fischer said the state's exposure comes to $208 million.

The law lets states use the lower of their fiscal year 2025 and fiscal year 2026 error rates. The current federal fiscal year ends Sept. 30, and the official USDA figure for it will not be released until July 2027. Fischer said the governor maintains that steps have been taken to reduce errors, including adding staff to process applications. He doubted Arizona could get below 6%, though better results might save the state a couple of million dollars.

The penalties do not begin until fiscal year 2028, the 2027-28 state budget year, so lawmakers have set aside no money for them in the current budget. Fischer said Congress could still change the rules before then, particularly if control shifts after the November elections or if members of both parties worry about states in their own camp struggling to meet the standard.

Arizona's food stamp caseload has fallen sharply. Fischer said about 920,000 people were enrolled in February 2025, and the number has since dropped to about 455,000, which he said is a steeper decline than in any other state. Part of the drop reflects new legal-status requirements. He also pointed to a change by Michael Wisehart, director of the Department of Economic Security, who has stopped allowing applicants to simply attest to facts such as having a job. Applicants now must provide documents, and many do not have them ready.

Fischer said access problems compound the issue. He said the state lost about two-thirds of the workers handling applications for food benefits and unemployment, and some applicants report being unable to get through on the phone lines. This year's budget includes $10.8 million for additional staff, and the governor used COVID-era money last year to hire more workers. Wisehart has also said the department is working with an outdated legacy computer system and would like funding for an upgrade, though Fischer said it is unclear whether the budget has room for one.

Some Republican lawmakers argue that the caseload drop mostly reflects people who left because of fraud. Fischer disagreed, saying fraud exists in any system but that it is unrealistic to claim half of recipients were collecting benefits fraudulently. He said Arizona has a great deal of work ahead to bring its error rate from nearly 11% to 6% or lower, and that more eligibility workers, a modern computer system and easier access to appointments would all help.