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States Are Hit Hard by Economic Downturn •
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As Jobs Vanish, Food Stamp Use Is at Record Pace
By Erik Eckholm
The New York Times
Monday 31 March 2008
Driven by a painful mix of layoffs and rising food and fuel prices, the number
of Americans receiving food stamps is projected to reach 28 million in the coming
year, the highest level since the aid program began in the 1960s.
The number of recipients, who must have near-poverty incomes to qualify for benefits
averaging $100 a month per family member, has fluctuated over the years along
with economic conditions, eligibility rules, enlistment drives and natural disasters
like Hurricane Katrina, which led to a spike in the South.
But recent rises in many states appear to be resulting mainly from the economic
slowdown, officials and experts say, as well as inflation in prices of basic goods
that leave more families feeling pinched. Citing expected growth in unemployment,
the Congressional Budget Office this month projected a continued increase in the
monthly number of recipients in the next fiscal year, starting Oct. 1 -
to 28 million, up from 27.8 million in 2008, and 26.5 million in 2007.
The percentage of Americans receiving food stamps was higher after a recession
in the 1990s, but actual numbers are expected to be higher this year.
Federal benefit costs are projected to rise to $36 billion in the 2009 fiscal
year from $34 billion this year.
"People sign up for food stamps when they lose their jobs, or their wages
go down because their hours are cut," said Stacy Dean, director of food
stamp policy at the Center on Budget and Policy Priorities in Washington, who
noted that 14 states saw their rolls reach record numbers by last December.
One example is Michigan, where one in eight residents now receives food stamps.
"Our caseload has more than doubled since 2000, and we're at an all-time
record level," said Maureen Sorbet, spokeswoman for the Michigan Department
of Human Services.
The climb in food stamp recipients there has been relentless, through economic
upturns and downturns, reflecting a steady loss of industrial jobs that has pushed
recipient levels to new highs in Ohio and Illinois as well.
"We've had poverty here for a good while," Ms. Sorbet said.
Contributing to the rise, she added, Michigan, like many other states, has also
worked to make more low-end workers aware of their eligibility, and a switch from
coupons to electronic debit cards has reduced the stigma.
Some states have experienced more recent surges. From December 2006 to December
2007, more than 40 states saw recipient numbers rise, and in several - Arizona,
Florida, Maryland, Nevada, North Dakota and Rhode Island - the one-year
growth was 10 percent or more.
In Rhode Island, the number of recipients climbed by 18 percent over the last
two years, to more than 84,000 as of February, or about 8.4 percent of the population.
This is the highest total in the last dozen years or more, said Bob McDonough,
the state's administrator of family and adult services, and reflects both
a strong enlistment effort and an upward creep in unemployment.
In New York, a program to promote enrollment increased food stamp rolls earlier
in the decade, but the current climb in applications appears in part to reflect
economic hardship, said Michael Hayes, spokesman for the Office of Temporary and
Disability Assistance. The additional 67,000 clients added from July 2007 to January
of this year brought total recipients to 1.86 million, about one in 10 New Yorkers.
Nutrition and poverty experts praise food stamps as a vital safety net that helped
eliminate the severe malnutrition seen in the country as recently as the 1960s.
But they also express concern about what they called the gradual erosion of their
value.
Food stamps are an entitlement program, with eligibility guidelines set by Congress
and the federal government paying for benefits while states pay most administrative
costs.
Eligibility is determined by a complex formula, but basically recipients must
have few assets and incomes below 130 percent of the poverty line, or less than
$27,560 for a family of four.
As a share of the national population, food stamp use was highest in 1994, after
several years of poor economic growth, with an average of 27.5 million recipients
per month from a lower total of residents. The numbers plummeted in the late 1990s
as the economy grew and legal immigrants and certain others were excluded.
But access by legal immigrants has been partly restored and, in the current decade,
the federal and state governments have used advertising and other measures to
inform people of their eligibility and have often simplified application procedures.
Because they spend a higher share of their incomes on basic needs like food and
fuel, low-income Americans have been hit hard by soaring gasoline and heating
costs and jumps in the prices of staples like milk, eggs and bread.
At the same time, average family incomes among the bottom fifth of the population
have been stagnant or have declined in recent years at levels around $15,500,
said Jared Bernstein, an economist at the Economic Policy Institute in Washington.
The benefit levels, which can amount to many hundreds of dollars for families
with several children, are adjusted each June according to the price of a bare-bones
"thrifty food plan," as calculated by the Department of Agriculture.
Because food prices have risen by about 5 percent this year, benefit levels will
rise similarly in June - months after the increase in costs for consumers.
Advocates worry more about the small but steady decline in real benefits since
1996, when the "standard deduction" for living costs, which is subtracted
from family income to determine eligibility and benefit levels, was frozen. If
that deduction had continued to rise with inflation, the average mother with two
children would be receiving an additional $37 a month, according to the private
Center on Budget and Policy Priorities.
Both houses of Congress have passed bills that would index the deduction to the
cost of living, but the measures are part of broader agriculture bills that appear
unlikely to pass this year because of disagreements with the White House over
farm policy.
Another important federal nutrition program known as WIC, for women, infants and
children, is struggling with rising prices of milk and cheese, and growing enrollment.
The program, for households with incomes no higher than 185 percent of the federal
poverty level, provides healthy food and nutrition counseling to 8.5 million pregnant
women, and children through the age of 4. WIC is not an entitlement like food
stamps, and for the fiscal year starting in October, Congress may have to approve
a large increase over its current budget of $6 billion if states are to avoid
waiting lists for needy mothers and babies.
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States Are Hit Hard by Economic Downturn
By Keith B. Richburg and Ashley Surdin
The Washington Post
Monday 31 March 2008
Many cutbacks felt by most needy.
New York - In Illinois' Cook County, women in poor neighborhoods no longer have
access to free mammograms from two mobile vans testing for breast cancer.
In Michigan, hikers will find about 20 campgrounds closed, and scientists are
ending their studies of fish populations in the Great Lakes.
In New Jersey, state workers are being laid off, and at least one town is canceling
its traditional Fourth of July fireworks.
And in California's San Fernando Valley, Everardo Orozco, 53, who has AIDS, exhausted
his medical benefits and can no longer afford the drugs that are keeping him alive.
"I don't know which ones I can afford every month," Orozco said, explaining
how his supply is dwindling and his share of the payments has skyrocketed from
$400 to $3,200 per month. He now injects himself with some medications once a
day instead of twice - not enough to keep his T-cell count from dropping or to
prevent his body from becoming resistant to treatment. And he fears that there
will be more cuts.
State budgets have been hit hard by a worsening national economy, including rising
costs for energy and health care. In addition, fallout from the subprime mortgage
crisis - declining home sales, deflated property values and mounting foreclosures
- has caused a slide in states' anticipated tax receipts. Revenue from property
taxes, sales taxes and real estate transfer taxes is affected.
At least half of the nation's states are facing budget shortfalls, some of them
severe, and policymakers in most of the states affected are proposing and passing
often-painful measures to trim costs and close the gaps. Spending on schools is
being slashed, after-school programs are being curtailed and teachers are being
notified of potential layoffs. Health-care assistance is being cut for the elderly,
the disabled and the poor. Some government offices, such as motor vehicle department
locations, will start closing on weekends, and some state workers are receiving
pink slips.
Some analysts worry that the impact is being felt disproportionately by the most
needy.
"It's disappointing, the extent they tend to focus their cuts on the most
vulnerable," said Iris J. Lav, deputy director of the Washington-based Center
on Budget and Policy Priorities, a liberal think tank that monitors state budget
issues. "It does appear to disproportionately affect low-income people."
Unlike the federal government, which can run deficits, almost all states are required
by their own laws and constitutions to balance their budgets. Many states are
just now hammering out their budgets, so some targeted programs could still be
saved in last-minute negotiations.
In most states, talk of raising taxes has become politically perilous, particularly
with residents already hurting from falling housing values and a worsening economy.
Only half a dozen states have approved, or are considering, tax increases, including
Maryland and Michigan, both of which raised taxes in 2007. In New Jersey, which
has a $3 billion deficit, Gov. Jon S. Corzine (D) has proposed eliminating or
reducing most property tax rebates. In New York, facing a $5 billion shortfall,
an idea in the General Assembly for a new income tax for people making more than
$1 million per year died last week after the Republican-controlled Senate, and
Gov. David A. Paterson (D), strongly opposed it.
Instead of raising taxes, most states with shortfalls are curtailing services,
and the effects are already being felt nationwide. Some of the most dramatic cuts
are being made in California, Maine and Rhode Island, according to budget experts,
with New Jersey not far behind.
California is facing the worst budget crisis, with a $16 billion shortfall, and
Gov. Arnold Schwarzenegger (R) has proposed a $4.8 billion cut in education services.
About 20,000 teachers, counselors, librarians, nurses and other support staff
members have received notice of potential layoffs, according to the state's Education
Department.
Los Angeles, which has the state's largest school district and a $6 billion budget,
faces a $460 million cut for the next school year - the dollar equivalent of
shutting down the entire district for two weeks.
In Thousand Oaks, Calif., the Conejo Valley Unified School District, home to 30
schools and 22,000 students, has already closed two elementary schools for next
year. Superintendent Mario Contini said layoffs could be next. "School districts
have been making cuts every year, and there isn't much left to cut," he said.
"We've already cut the flesh to the bone, and now we're removing the skeletal
parts. It's that severe."
Schwarzenegger has also proposed $650 million in cuts to the Healthy Families
Program and Medi-Cal, which together provide health-care services to more than
7 million senior citizens, disabled people and children in the state. Adults under
the Medi-Cal program would lose their dental benefits, as well as optometry and
psychology services.
The California Department of Public Health is also facing an $11 million cut to
AIDS services, with the bulk of that - $7 million - coming from a program that
helps low-income Californians, such as Orozco, obtain lifesaving antiretroviral
medicine.
Orozco had been paying $400 per month for the 15 daily medications he needs. But
when his allotment under the program ran out, his share jumped to $3,200, and
he could no longer afford five of the drugs.
"We want to continue to live, you know," he said. "We need to continue
fighting what this is. I've been dealing with this since 1983. Every day, it's
a fight. It's not easy. Either they help us do something to fight this, or we're
going to die."
A recent 50-state survey by the Associated Press showed that hundreds of thousands
of poor children, the disabled and the elderly stand to have their health coverage
eliminated as a result of budget cuts, and more than 10 million people would lose
access to dental care, specialists and name-brand prescription drugs.
Budget experts said they see a repeat of the pattern that happened during the
recession of 2001: States generally cut health services and medical benefits first,
because these costs are often rising more rapidly than others, and the savings
tend to be immediate.
Subsidies to higher education are also a favored target for budget cuts - mainly
because policymakers often believe that universities can find money from other
sources, such as private donations or higher tuition.
Budgets for parks and recreation, and for natural resources and science, also
stand to take a hit.
In cash-strapped Michigan, dealing with the struggles of the automobile industry,
the Department of Natural Resources is closing 20 campgrounds, including the highly
popular and rustic Pinney Bridge State Forest Campground, considered one of the
most beautiful in the Lower Peninsula. The department also plans to end its studies
of fish populations in the Great Lakes, and 14 conservation officials are being
laid off.
Hunters in Michigan will also find their license fees increased.
In Illinois, Gov. Rod Blagojevich (D) has proposed ending a popular controlled
pheasant-hunting program at state sites. Outraged hunters have said that among
those affected will be the young and the handicapped, who have access to special
hunts under the state program.
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Surdin reported from Los Angeles. Staff writer Kari Lydersen in Chicago
contributed to this report.
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