Food stamp stimulus hits US state economies

By: Information Daily Staff Writer
Published: Saturday, May 23, 2009 - 10:24 GMT Jump to Comments

States quietly launched a multi-billion-dollar boost in food stamp funding last month that experts say is more likely than any other stimulus program to jolt the moribund economy back to life.

“People who receive these benefits are hard-pressed and will spend any financial aid they receive very quickly,” said Moody’s chief economist Mark Zandi. Every $1 spent on the food assistance program adds $1.73 to local economies because an uptick in food sales creates related jobs and further consumer spending.

In April, 32.5 million low-income recipients got their first monthly bonus — a 13.6 percent increase in benefits, averaging about $20 more per person — under the Obama administration’s stimulus plan. Slated to pump $20 billion into the market over five years, the stimulus plan gives each recipient more buying power but does not affect the number of enrollees.

It’s up to states to sign up the burgeoning ranks of the unemployed and others whose incomes have plummeted in this recession, and they have every incentive to do so. All of the benefits and about half of administrative costs are paid for by the U.S. Department of Agriculture.

“It’s smart for states to promote food stamps, because that and unemployment checks often are enough to delay the need for other types of public assistance — such as welfare and Medicaid — that put pressure on state budgets,” said poverty expert Sheri Steisel at the National Conference of State Legislatures.

Still, administering the program in this recession has been a challenge. “We’ve been grappling with caseload increases for more than a year,” said Larry Goolsby, legislative director for the American Public Human Services Association , which represents state agencies. “States were prepared for the stimulus situation, because they already had made changes to streamline the process,” he said.

In Ohio, where food stamp rolls hit nearly 1.3 million this year, Democratic Gov. Ted Strickland spearheaded a community outreach program to ensure that every eligible person in the state could quickly apply for food stamps and other safety-net programs.

Utah revamped its entire social-welfare application process, making it easier for frontline workers to provide low-income families with food stamps and other services without filling out duplicative applications, and Washington state developed a unique online system that speeds the application process for food stamps and slashes state administrative costs in the process.

Last year, the Food Stamp program — recently renamed Supplemental Nutrition Assistance Program or SNAP — served 28 million people nationwide, at a price of $36 billion. In the 12 months ending February 2009, the rolls spiked by 17.4 percent, helping 4.8 million more low-income people pay for groceries — more than in any year since the program began in 1964.

But even as the number of applicants spirals, states are reaching out to millions more who may not realize they are eligible or are reluctant to participate.

Tennessee caseworkers drive hundreds of miles to sign up people in housing projects, rural churches and community centers. Michigan food stamp administrators set up shop in centers for the elderly, and Nevada put kiosks in grocery stores so low-income shoppers can quickly find out whether they qualify.

At least 35 states pre-qualify those who receive public assistance through other state programs, 17 automatically send food stamps to elderly and handicapped people who receive assistance for the disabled, and 21 states let people sign up online, rather than appear in person, according to a recent USDA report.

Despite these efforts, only 60 percent of eligible Americans received food stamps in 2004, the most recent year data are available. But some states had more success than others at signing up those in need. Missouri, Tennessee and Oregon helped buy groceries for more than 80 percent of those who are eligible, while California, Wyoming and Massachusetts served fewer than 50 percent of their poor residents, according to a USDA report.

As states make it easier to become a new food stamp recipient, some are starting to focus on retaining people who already have benefits. “It’s much easier to close the back door than to go out and find new people who qualify,” said Stacy Dean, hunger expert with the Center on Budget and Policy Priorities.

Utah calls recipients who fail to return their signed recertification papers and encourages them to renew, said state food stamps chief Kathy Link. “Starting the process all over again is much more work for recipients and for the department,” she said.

The dollar value of food stamps an individual or family can receive is based primarily on income, with benefits ranging from a minimum of $16 per month for an individual to $200 per month for most making under $13,000 per year, and as much as $1,202 for a family of eight, making less than $45,000 per year. A family of four, making less than $27,000, can receive up to $668 per month, according to USDA.

For individuals, the stimulus plan adds $24 a month to their debit cards; families of four get an additional $80, families of eight get $144, and larger families get $18 for each additional member.

Unlike most other recovery act programs, the food stamp hike does not expire. Instead, the new benefit level will remain in effect until regular annual adjustments based on the cost of food result in an even higher benefit. The act also allows states to extend the duration of benefits for certain unemployed workers without children who otherwise would be eligible only for short-term assistance.

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