State bills would add limits to EBT use

Dave Solomon, New Hampshire Union

CONCORD – The debate over ATM cards issued to welfare recipients is back before the state Legislature, with a bill in the House and one in the Senate that would prohibit use of the public benefit cards for things like alcoholic beverages, tobacco or adult entertainment

.But there are substantial differences in the House and Senate versions. The Senate bill would make it harder for clients in human service programs to use the cards, called Electronic Benefit Transfer cards, to access cash, has a longer list of prohibitions and would impose tough penalties for violations.

The House version prohibits use of the cards at tobacco shops, tattoo or body piercing parlors and marijuana dispensaries, but does not include the prohibition on alcohol or adult entertainment and contains no reference to cash withdrawals.

State Sen. Jeannie Forrester, R-Meredith, led the charge on this issue in the Senate last year. Her bill passed the Senate 21-3, but stalled in the House in May when SB 203 was tabled for further study in a 188-161 vote, largely along party lines.

That review took place during the ensuing months, and the stage is now set for reconsideration.
It’s about time, said Jackie Whiton, the store clerk from Antrim whose refusal to sell cigarettes to a welfare recipient in 2012 cost her her job and made her an advocate for reform.

She was courted by then-House Speaker Bill O’Brien, testified before the House and appeared on talk shows.
“It will be three years since I got fired on May 31,” said Whiton, now 68 and retired. “This is how long it takes for anything to go through the Legislature.”

Forrester said she understands the motive behind Whiton’s petition drive and lobbying on the issue, but that was not what inspired her legislation this year or last. “I didn’t act on it because of her,” she said. “Bill O’Brien did, but I didn’t. The Department of Health and Human Services came to me and asked me to introduce legislation to make changes so we would be in line with federal guidelines, which forbid alcohol and tobacco purchases.”

Ife Floyd, a research associate with the Center on Budget and Policy Priorities in Washington, D.C., was in Concord on Friday for a workshop on the state budget.
“There’s not necessarily a need to pass legislation,” she said, “because the state could meet the federal requirements administratively.”

Federal rules in place

Floyd, who follows the issue nationally, said many states have passed legislation in order to expand the prohibitions to include locations like arcades or lingerie stores, to institute penalties and to restrict cash withdrawals.

In compliance with the federal changes, new regulations took effect in New Hampshire last year prohibiting the use of the EBT cards, or cash obtained through them, at liquor stores, casinos or strip clubs.
Both the House and Senate bills now before the Legislature were crafted with the existing federal regulations in mind.

While the Senate version, SB 169, targets products, the House version, HB 219, targets specific types of merchants.

The Senate bill states, “Any person who receives public assistance is prohibited from using an EBT card or cash obtained with an EBT card to gamble or to purchase tobacco products, alcoholic beverages, lottery tickets, firearms or adult entertainment.”

The only location-specific reference in the Senate bill is to “business establishments primarily engaged in the practice of body piercing, branding or tattooing.” The House bill targets tattoo parlors, tobacco shops and marijuana dispensaries.
Cutting costs

The EBT cards emerged in the early part of the last decade as a cost-effective way to manage social service programs, primarily cash-assistance welfare payments, known as Temporary Assistance for Needy Families (TANF).
“It was really a chance to save money,” said Floyd, pointing out that it’s cheaper to put the money on a card than it is to produce and process checks or food stamp booklets.

What used to be called Food Stamps is now SNAP (Supplemental Nutritional Assistance Program). SNAP funds are also put on an EBT card, but the SNAP cards function just like the old Food Stamps did. Food Stamps could only be used at stores that accepted Food Stamps, and then were only for food.

The SNAP card can only be used at stores with cash registers programmed to accept them and discern whether cigarettes, alcohol or cooked food is being purchased, which can be denied.

The most radical change would be to make the TANF card function just like the SNAP card, but opponents say that would defeat the purpose of the cash-assistance program, thus the more limited measures now being proposed.

Forrester said she was also motivated to act on the issue because of a recent legislative audit that suggested 78 percent of TANF funds were drawn as cash from ATMs, with no accounting of how the funds were spent. “The audit showed that most of the EBT spending goes toward necessary living expenses like food and health care, but that was on the basis of anecdotal evidence,” she said.
Another way

Forrester recalled her time as a town administrator in Tuftonboro and New Durham. “I have first-hand experience about benefits, and the way we used to administer them,” she said. “If someone needed a voucher, they would come to the town offices and I would write out a voucher for them. They would take that to the local stores where it was only good for food, not alcohol or tobacco products.”
That all changed with the move to EBT cards.

The former town administrator says if she had her way, the benefit programs would be administered by block grants to the cities and towns.

“I believe that at the local level, your communities know who needs help and who is abusing the system,” she said. “There are people who do need help, and we want to help those people, but like the lady from Antrim, I can’t tell you how many times my constituents stand in line and watch someone pull out an EBT card to buy lobster or something like that and say to me, ‘I am having a hard time getting by myself, and this isn’t right.’?”
Best scenario

MaryLou Beaver, New England director for Every Child Matters, was part of the group that worked with lawmakers on the study committee over the summer, led by Rep. Charles McMahon, R-Windham, sponsor of the House version for the upcoming session.

“We support the McMahon bill. We don’t necessarily agree on the need for it (given existing federal regulations), but we do support it,” she said. “We feel it’s the best scenario that could be played out as far as restrictions.”

In addition to the expanded restrictions in the Forrester bill, Beaver said groups like hers also oppose the Senate bill penalties.

“In Forrester’s bill, you are penalized the first time by losing two pay periods, the second time by losing four and the third time by losing six,” she said. “At that point, you have just created homelessness for an entire family.”

A small number of House Republicans, led by McMahon, joined the Democratic majority in tabling the EBT reform last year, but this year is different. With strong Republican majorities in both chambers, Forrester believes the time is right.
“If my bill stays the way it is, it should have no problem getting through the Senate and the House,” she said.

Gov. Maggie Hassan’s spokesman said she will wait to see what legislation lands on her desk. “Governor Hassan will listen to all stakeholders and review these bills as they make their way through the legislative process,” said William Hinkle.
A national trend

New Hampshire is not alone in trying to take the federal rules one step further. “There is a lot of contesting about EBT benefits going on,” said Floyd. “It’s kind of a way to have a conversation that people on welfare are bad, to demonize them.”

McMahon, who was not available for comment, sounded a similar theme in calling for the legislation to be tabled last year, saying at the time, “I do not use government as a weapon,” and, “We need to address this in a collaborative way so we don’t treat our fellow citizens as fourth-class citizens.”

Forrester said that is not her intent, and that the recommended changes will strengthen the program for those truly in need. “If there are people not using the money the way it’s supposed to be used, the family is not getting the nutritional food they need,” she said, “and the limited resources we have as a state are not going to people who are really in need.”

Originally published January 24, 2015 New Hampshire Union