Replacing Food Stamps With Mailed Checks Is Tested in Several States : Welfare: Converting to cash is efficient for government, offers flexibility to recipients. Fear is that money will go for non-essentials.

Food stamps, weapons in the 1960s War on Poverty, no longer arrive in this hilly, hardscrabble south Alabama logging community.

Some of the people who mill around in Overstreet’s Store in tiny Gainstown still say they receive “food stamps” in the mail. But they don’t. They get checks--real money--hard to trace, easily spent.

In a government study, mailed checks have replaced the traditional food stamps in three Alabama counties since January. Similar pilot projects have been undertaken in parts of California, Washington state and Puerto Rico.

The aim of the study is to determine if the old food coupons should be converted to cash, replaced by plastic identity cards or even electronic fund transfers.

One of the questions to be answered is whether the money will be used for food for the table or used to buy cigarettes and whiskey and other non-essential items. There have been reports of people moving to Alabama from other states just so they can collect cash instead of stamps.

Mike Gibson, a spokesman for the Alabama Department of Human Resources, explains that the food stamp program, run by the U.S. Department of Agriculture, is separate from the state welfare program.

“Welfare is kind of a generic name for Aid to Families with Dependent Children, which is a cash program,” Gibson says. “The eligibility is based on income and resources and family size. In general, the eligibility criteria are very near the federal poverty level.

“The income standards in the food stamp program are significantly higher than AFDC. It’s possible for many families, depending on size, to work and still be qualified for food stamps.

“Almost every family that qualifies for AFDC qualifies for food stamps, but not the other way around. For instance, Alabama has about 186,000 families receiving food stamps, while about 47,000 families receive AFDC payments.”

Gibson says food stamps were intended to supplement the food budget of families and not provide 100% of the groceries. The average amount of food stamps per recipient is $65 a month.

Steve Mennemeyer, a professor at the University of Alabama at Birmingham, has a contract to evaluate the Alabama project. The results of the first year’s experience in the four-year “cash-out” program are due this winter.

“So far, the story that we’re hearing, largely anecdotal, is that people seem to be quite happy with the flexibility that cash gives them,” Mennemeyer says.

Perhaps too flexible, in the view of the Rev. Heary Rogers, who has discussed the switch to checks with other ministers in Clarke County.

“Children will suffer,” Rogers says. “If you give folks money, they’re going to buy what they want to. If you give them food stamps, the child will get his share of food.”

A cash-out program in San Diego, Calif., began in July, 1989, when 20% of the food stamp caseload was switched to cash. All food stamp households in San Diego County were converted to cash food benefits on Sept. 1, 1990, according to officials of the U.S. Agriculture Department.

The Washington state program involves randomly selected households.

Carol Baenziger, a spokeswoman for the Department of Social Services in San Diego, says some of the area food banks have complained that more people are coming in for food at midmonth because they spent their food stamp check on lodging.

Bonny O’Neil, the assistant deputy administrator of food stamps in Washington, D.C., says the food stamp program has to be reauthorized by Congress in 1995. Will there be sweeping change?

“It would require legislation for us to cash-out the whole program. Clearly that would be a major undertaking,” O’Neil says.

“We try to keep up with technology,” she says. That technology includes use of “smart cards,” which contain a microchip identifying the holder as a food stamp recipient, or electronic transfers.

In Clarke County, before her checks began arriving in the mail, Pamela McClain and her neighbors drove 50 miles round trip to Grove Hill to pick up their food stamps at the Department of Human Resources office.

Now they don’t. McClain, a young mother, picks up her checks in the mail at Overstreet’s Store. With the change, Grove Hill grocers felt an immediate economic blow.

Jerry Andrews, who runs a grocery store and a local hardware store at Grove Hill, says food stamp recipients usually spent about one-half of their stamps in his store.

“Now they cash their check and buy a pack of cigarettes,” Andrews says.

While the big store grocers may have suffered, Maynard Overstreet, who runs three small stores in the county, including the one in Gainstown, says his profits have risen. The checks arrive at the small post office in his store. The customers cash their checks in the store and make their purchases in their own neighborhood.

Legally, food stamp coupons can only be used to purchase food and cannot be used to buy non-food items. Overstreet, however, says he has heard that bootleggers would accept food stamps in Clarke County.

The Agriculture Department’s Food and Nutrition Service supervises the food stamp program, along with the U.S. Department of Health and Human Services. Last year, the total cost of the program was $15.4 billion.

Susan Acker, an Agriculture Department spokeswoman, says it costs $54 million a year just to print the stamps.

Gibson says that at the state level, “there’s a big expense in providing security for food stamps, safe-deposit boxes, armed guards, and counting food stamps several times during their lifetime. We have to count them, grocery stores have to count them, banks have to count them.”

By sending a food stamp check, they can combine it with the AFDC payment, which is already in check form.

The Alabama study is unique, Acker says, because the state introduced an overlapping program that requires food stamp recipients to apply for jobs. The state program is called Assets--Avenues to Self-Sufficiency Through Employment & Training Services.

But the cash-out program has raised questions about the ability of low-income families to handle household budgets.

“People are going to have to get over the idea that more children are going to go hungry with money than with food stamps,” says Pauline Precise, who administers the cash-out program in Madison County, a pilot project site along with Clarke and Limestone counties. “But I think they can do that.”

But Tom Keith, a Huntsville attorney for low-income clients in the Madison County area, says he’s concerned that the checks will be spent on things other than food and make the poor even more vulnerable to “unscrupulous used-car salesmen and drug dealers.”

“There’s a lot of pressure on low-income families,” Keith says. “They need cash to go to the doctor, to the drugstore or to court.”

David Super, a policy analyst for the nonprofit Food Research and Action Center in Washington, agrees with Keith. “Landlords cannot collect food stamps as rent, but converting stamps to cash allows landlords to raise rents,” Super said in an editorial opposing a shift from food stamps.

Ardelia Love of Huntsville, the mother of 14-year-old triplets, says she prefers the food stamps because she could budget her spending better.

“The check is all right, but I myself prefer the food stamp coupons,” Love says. “I try to use mine just for food, but it seems like the cash gets away a lot quicker than the coupons.”

Dick Hiatt of Huntsville, director of the Food Bank of North Alabama, says he’s noticed a disturbing trend. “I’ve interviewed some people who entered Madison County from Florida because they heard you can get cash instead of food stamps,” he says.