San Diego County to Try Cash Instead of Food Stamps

In an innovative program designed to save money and increase the self-esteem of food stamp recipients, San Diego County will begin paying cash instead of coupons on Sept. 1, county officials said Monday.

Called a “full cash-out implementation,” the unique program is being hailed by county, state and federal officials as a model for national welfare reform, said county officials familiar with the plan.

Board of Supervisors Chairman Leon Williams and other officials said that giving food stamp clients cash instead of coupons will reduce program costs while increasing the recipients’ self-esteem.

Some critics within the county Social Services Department have warned, however, that giving food stamp recipients cash instead of coupons might lead to more abuse and ultimately increase the cost of the program.

Legally, food stamp coupons can be used only to purchase food and cannot be used to buy liquor, cigarettes or other non-food items. A cash-only program will carry with it none of those restrictions, making it impossible to monitor how the money is being used, said one social services employee, who did not want to be identified.

County officials countered that they expect no more fraud than under the current food stamp program, which has spawned a black market in which the coupons trade for less than their face value. Under the new system, recipients will need proper identification to cash the county-issued checks.

According to the Social Services Department, an estimated 46,000 households and 139,000 people receive food stamp assistance in San Diego County. The county, the fifth largest in population in the United States, proposed the ambitious plan to state and federal officials last year and initiated a pilot program involving 20% of the county’s food stamp clients in July, 1989.

The county has received federal approval to expand the program to include all food stamp households.

An official announcement is expected today by federal, state and county county officials.

County officials familiar with the plan say it will save $600,000 in administrative costs at the state, county and federal levels between September, 1990, and July, 1991. The cost of the food stamp program in the county, currently about $67 million, is funded entirely by the U.S. Department of Agriculture.

By mailing food stamp clients a monthly check instead of coupons, the county saves thousands of dollars in postage fees for the 590,000 food stamp packets it mails. In addition, the county will be able to close its food stamp issuance center and will no longer have to pay an armored transport company to handle the coupons.

“The pilot program was such an overwhelming success last year. We projected a savings of $86,000 but saved $150,000 instead,” said a county official who asked not to be named before today’s planned announcement.

Board of Supervisors Chairman Leon Williams and other officials said that besides reducing costs, giving food stamp clients cash instead will increase the recipients’ self-esteem.

“Food stamps put a person at a disadvantage. It’s a put-down and a humiliating thing to have food stamps in a grocery line,” Williams said in a telephone interview. “ . . . You have to take away factors that diminish a person. You have to give a person back his or her dignity.”