Don't Mess With Taxes

She’s not happy with the salad, but at least she’s got a nutritious food choice. That could change if the current tax bill and its revisions to the federal Supplemental Nutrition Assistance Program (SNAP) is enacted. (Image by Tung Lam from Pixabay)

Most tax eyes have been on Washington, D.C., as the House-approved One Big Beautiful Bill (OBBB) now awaits action in the Senate.

Whatever form the final bill takes, it likely will affect states, negatively in many cases as they lose federal aid.

One area where states are bracing for tougher times is food assistance programs. The left-leaning Center on Budget and Policy Priorities estimates that the Supplemental Nutrition Assistance Program (SNAP), still called food stamps by many, will take an estimated $300 billion hit through 2034.

Those extended cuts to SNAP would cost not only families, but state governments, businesses, and communities.

Funding shift: The federal government has historically fully-funded SNAP, but the OBBB would change that. It mandates that states cover at least 5 percent of the food benefit cost. First Focus on Children elaborates in an issue brief on the potential new state costs.

“While 5% may seem like a low percentage, this translates to billions of dollars for some states. Moreover, states could be required to pay much more than 5%, with Congress proposing increased responsibility to states based on error rates within the program. In some instances, this provision could lead to states being responsible for up to 25% of the cost. Because error rates are calculated annually, states could fall into different categories of funding responsibility from year-to-year.”

The Washington, D.C.-based bipartisan child advocacy nonprofit also notes that in addition to the food benefit cost transfer, the budget reconciliation bill restructures the funding balance so that states will be responsible for 75 percent of the administrative costs.

Currently, the federal and state governments share administrative costs 50-50.

Hardest hit to rural areas: The practical and fiscal effects of less SNAP money will be felt nationwide, in all types of communities. But some advocates of the anti-hunger program say the cuts could especially hit rural Americans.

The Food Research and Action Center says that more rural residents currently rely on SNAP than those in metropolitan areas.

Plus, many of these less accessible parts of the United States essentially are already food deserts, where shoppers have limited access to affordable healthful dietary options.

This is a problem not only for shoppers, but also grocery stores that, in many less-populated areas, struggle to sustain their businesses. The loss of SNAP could exacerbate pressure on local grocers.

So, it’s no surprise that the National Grocers Association (NGA) opposes the SNAP cuts. The trade group argues that by helping families to purchase food, the federal food program also boosts local economies, in part by providing jobs.

“Independent grocers, particularly those in rural and underserved communities, are essential partners in delivering SNAP benefits. Cutting SNAP would harm the most vulnerable Americans and threaten the viability of community grocery stores that are depended upon by their local economies and neighborhoods,” noted NGA in a May statement.

More pressure on charitable options: Food banks also are expected to be another potential victim of SNAP cuts. The federal food program works in tandem with food banks, which likely will see more customers when residents have less SNAP funds to use at commercial groceries.

“It will put a disproportionate burden on the charitable food system that they can’t sustain because they’re already seeing too many people,” Tim Williams, government affairs and advocacy officer at Food Bank for the Heartland, an Omaha, Neb.-based nonprofit serving 93 counties across Nebraska and Iowa, told Stateline.com in a recent story on how the Republican bill’s cuts to food assistance would hit rural America especially hard.

Recently, requests for donations to the Central Texas food bank have been showing up regularly in my snail and email boxes. I know part of this push is because these organizations feel more pressure every summer when schools are out and youngsters don’t get their school-provided lunches and breakfasts.

If the OBBB SNAP cuts are enacted, those financial solicitations might become daily occurrences, since 43 percent of SNAP dollars go to families with children.

Not to add to the public pressure if you, too, are seeing the same food-related charitable requests from groups in your community, but consider giving. And maybe set up a future giving plan that could help ease some of the SNAP pressure if that section makes it into law.

I know few of us itemize deductions on our federal tax returns nowadays. But if you do, gifts to 501(c)(3) groups, the tax status category granted most U.S. food banks, can be claimed as a charitable donation on Schedule A.

Even if you don’t itemize, giving so that people, especially children, don’t go hungry will make you feel good.

You also might find these items of interest:

• 10 states tax groceries, but 4 looking to cut their food levies
• Earth Day 2022 menu: helping feed those facing food insecurity
• Grocery prices, inflation and food taxes (2011; yes, it’s been an issue for a long time)

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