Food Stamps to Give Way to Cash : Trial Program Hailed as Way to Raise Esteem, Cut Costs

Hoping to eliminate the stigma attached to food stamps while also reducing costs, the San Diego County Board of Supervisors on Tuesday approved giving food assistance recipients cash, instead of coupons, to buy groceries.

Hailing the trial program as a model for national welfare reform, the supervisors unanimously adopted a plan that county administrators predict will benefit food-stamp recipients and taxpayers alike by reducing fraud, increasing welfare clients’ self-esteem and cutting administrative costs.

Under the federally financed program, people now receiving food stamps, which total $90 a month for a family of three, will begin receiving cash warrant checks instead or have that amount added to other public assistance checks.

Hope to Curtail Fraud

Besides eliminating the embarrassment of being publicly identified as a welfare recipient when the food stamps are used at a grocery store, the shift to cash could curtail fraud and theft, county officials said. The checks will require proper identification to be cashed, but food stamps can be redeemed by anyone who possesses them.

Although cash payments may appear on the surface to be more susceptible to misuse than the existing food coupons, county leaders argued that the need for identification should make the check a less-attractive target for thieves and improve the program’s efficiency.

“Now, we send out the coupons, but there’s no way of telling who spends them,” said Richard Jacobsen, the county’s social services director. “This gives us a way of checking.”

As a result of Tuesday’s action, 20% of the county’s 46,000 food stamp cases--which encompasses about 100,000 people--will begin receiving cash instead of coupons beginning July 1. After one year, if that test is judged effective, all local food assistance will be allocated by the checks for a three-year trial period.

Welfare rights’ advocates praised the program as an innovative one that increases sensitivity to recipients’ needs even as it enhances cost efficiency. By reducing mailing costs and administrative overhead, the cash program could reduce federal, state and local costs by $344,164 a year, with $86,041 of that being the county’s projected annual savings, county officials said.

“This is one of the best policies . . . we could have in our county,” said Merkel Harris, director of the Welfare Rights Organization. “It’s an excellent idea.”

No Spending Restrictions

Although there are concerns that the cash payments might be spent for things other than groceries--or for items such as liquor and cigarettes, for which food stamps cannot be used--the supervisors expressed faith in recipients’ judgment. The demonstration project, they added, is the only way to test whether those doubts are valid.

“It is a risk, and there is some opinion we shouldn’t be doing this,” Supervisor John MacDonald said. “But I’ve long believed you maintain a welfare attitude in the minds of people by issuing food stamps.”

Describing food stamps as “a put-down . . . that implies inferiority,” Supervisor Leon Williams said recipients “should be trusted” to properly use the cash payments.

Supervisor Susan Golding, meanwhile, argued that abuses under the cash payment program will probably be fewer than those with coupons.

The existing program, Golding noted, has spawned a black market in which the coupons are sold for less than face value. Moreover, food stamp recipients can purchase a small item worth only a fraction of the coupon’s value--for example, a 50-cent item bought with a $10 coupon--and receive the rest back in cash to be spent as they please.

“If people are going to cheat, they’re going to cheat,” Golding said. “That’s why this is only a demonstration project. But this approach seems to offer advantages, both to those who receive the benefits and the public.”

The cash payments will reduce the county’s expenses for the program by more than half, from the $1.73 per coupon packet to 69 cents per warrant check, according to county projections.

A major part of those savings will stem from reduced mailing costs. Because the coupons are so easily negotiable, about 26,000 of the monthly packets are sent by certified mail, at a cost of 75 cents each--an expense that will end after the shift to checks. The cash program will also eliminate storage and armored transport of the coupons, and reduce the county’s staff by 12 positions.