Who Pays When Washington Won't? The $15 Billion Cost Shift Heading for Every CBO

Three separate funding crises are converging on community organizations simultaneously: SNAP administrative costs are shifting to states, CSBG was proposed for elimination, and WIOA funding hasn't kept pace with inflation in a decade. The Consolidated Appropriations Act of 2026 kept the lights on for now. But the structural pressure is accelerating, and the money states need to absorb will come from somewhere.

Crisis #1: The SNAP Cost Shift

Starting October 2026, the federal match for SNAP administration drops from 50% to 25%—the biggest structural change to the program since it was created. According to the Pew Charitable Trusts, states' collective SNAP costs could rise to $15 billion annually once all provisions are fully phased in over the next several years.

The state-level numbers are already being calculated. Maryland faces roughly $58 million more annually for SNAP administration alone. Minnesota faces $125 million. Michigan is looking at a $95 million budget hit. Nevada will pay $19 million more this year. Every state is running these numbers right now, and every one of them is asking the same question: where does this money come from?

Crisis #2: CSBG on the Chopping Block

The FY2026 President's budget proposed eliminating the Community Services Block Grant entirely. CSBG funds nearly 1,000 Community Action Agencies in 99% of America's counties on just $770 million a year. In FY2023, the NASCSP reported 397,000 employment-related results, over 1 million education results, 2.3 million housing results, and 364,000 income results across the network—though as the sector itself acknowledges, the distinction between outputs and outcomes in this data remains a work in progress.

Congress restored funding this time. But the proposal signals where the conversation is heading. Washington is asking “what's the ROI?”—and the organizations that can answer with outcomes data will survive. The ones that can only report headcounts are vulnerable.

Crisis #3: The WIOA Funding Gap

WIOA funding is $400 million to $1 billion short of what the workforce system needs, with the real value of funding not keeping pace with economy size, inflation, or population growth since 2015. The initial FY2026 DOL budget proposal called for a $4.6 billion reduction—a 35% cut—before Congress restored funding. The threat is not hypothetical.

The Penalty Loop

Starting FY2028, states with SNAP payment error rates above 6% will begin paying a portion of SNAP benefit costs—5% to 15% on a sliding scale. This creates a vicious cycle: underfunded administration leads to processing errors, which leads to financial penalties, which leads to further budget cuts to the programs that prevent errors. The states that invest in coordinated infrastructure now will avoid this trap. The states that don't will pay for it twice.

Outcomes Are No Longer Optional

The “do more with less” moment that everyone has been warning about is here. But it's not just about efficiency. It's about proof. Organizations that can show a dollar invested in navigation saved three dollars in emergency services, that can prove coordinated case management reduces error rates, that can demonstrate families reaching self-sufficiency rather than cycling through crisis—those organizations will be funded. The rest will be consolidated, defunded, or eliminated.

The question isn't whether the squeeze is coming. It's whether you'll have the data to survive it.