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Data erode Edwards' food stamps scare tactic

Call the bluff, in part if not totally, on food stamps.

With the 2018 Third Extraordinary Session of the Louisiana Legislature commencing, the Gov. John Bel Edwards Administration has launched a full-court press to ensure some kind of sales tax increase reoccurs as a result of it. Immediately after the send of the second edition, administration officials began circulating reports of various supposed calamities that would come from failure to reinstitute some kind of tax hike.

One came from the Department of Children and Family Services, whose Secretary Marketa Garner Walters proclaimed the budget without the increase signaled the end of the Supplemental Nutritional Assistance Program. She claimed the budget cut $34 million, which, given other priorities, meant the state would have to discontinue SNAP.

SNAP money distributed comes entirely from the federal government. But the states pay about half of administrative costs, which for the latest year available (fiscal year 2016) meant $58 million. (NOTE: After the original post, a DCFS spokeswoman wrote the latest figure was $67.4 million.) With the exception of waivers granted to increase enrollment beyond federal law, it’s all or nothing: states can’t pick or choose which groups within the eligible population to provide the benefit, which is calculated from income and household size.

Yet a deeper dive into the data shows such as drastic step – Louisiana would become the first state ever to turn away SNAP funding and not have the program – questions its necessity. First, the state could jettison its waiver that allows it to pay out to able-bodied adults without dependents, which encompasses approximately 7.5 percent of all recipients (2015 data).

Other states that have done this have seen caseloads in this recipient category fall typically by 80 percent. This would equate to around $3.5 million saved. But this move also likely would raise additional revenues as well, for other states report a substantial number of those exiting the program for this reason join the workforce and see their average incomes rise substantially, as much as doubled.

Still other factors erode the argument for cancellation. At $26.75 per household, while ranking 30th among the states in administrative costs, among ex-Confederate southern states only two had a higher figure, with most of the rest substantially lower than Louisiana’s. Were this lowered to the average of comparably-sized neighbors Alabama and Mississippi (economies of scale give larger-population states an advantage, with smaller-population states paying relative more), that saves another $3.5 million.

Additionally, the department’s budget actually increases by over $42 million, before the authorized $34.7 million cut, leaving the department with a nearly one percent overall increase. And yet other savings at the margins can’t be found even with the cut in a growing budget? And if axing the program happens, what would happen to the extra $23 million or so not spent on administration?

(NOTE: After the original post, a DCFS spokeswoman wrote to clarify the overall budget:

There was a $42 million increase in the budget originally, but because of adjustments to funding for the State Central Registry and Integrated Eligibility system, it was then reduced by $41 million. The $42 million “increase” in DCFS budget and subsequent cut of $34.7 million does not result in a “nearly one percent overall increase” in DFCS’ budget. The $42 million referenced here includes all means of financing – i.e., state and federal funds. The $34.7 million reduction includes only SGF. They are not comparable. Given the 50% federal match for SNAP administration, the $34.7 million reduction in SGF ends up being a $59.4 million total cut, or a nearly 9 percent overall decrease in DCFS’ budget.)

Walters also said that a SNAP termination would result in 1,000 layoffs. Yet the area of her department that runs the program, among others, is budgeted for 1,888 positions and spending authority of some $334 million. So why would letting go of $58 million, about a sixth of the total, translate into 53 percent of the office losing their jobs?

(NOTE: After the original post, a DCFS spokeswoman wrote to clarify about potential layoffs: 

The $34.7 million reduction in State General Fund (SGF) should be calculated as a percentage of the SGF appropriated to the Division of Family Support ($65.4M). The reduction therefore represents a cut of approximately 53% of SGF and would lead to a loss of 53% of the jobs within the Division (almost all SNAP-related positions upon the termination of the program).)

Finally, new federal changes from a presidential executive order likely would decrease the number of clients, thus costs to the state. Legislation in Congress advancing would complement that and beefs up enforcement. As for Louisiana, the budget dedicates fewer than $65,000 for fraud detection efforts in the administering department.

Improper payments could be an issue. As Louisiana ranks 46th (2016 data) in median household income, the per household payments by SNAP should rank among the highest. They do – almost $300 a month, trailing only Alaska. But of the three states with lower incomes – Arkansas, Mississippi, and West Virginia – their average SNAP benefits are substantially lower, nearly $50 or 17 percent. Family size should be relatively invariant across states, so why should Louisiana’s be so much higher?

Reviewing this data, it becomes clear alternatives exist to dumping SNAP – especially if reinstituting a third of the sales tax set due to expire at the end of the month, which theoretically reduces the “cut” to around $11.6 million. Democrat Edwards wants a half cent from the Republican-led Legislature.

But he may fear no increase coming at all, hence the hyperventilating reports from DCFS and others. Yet parsing the numbers shows, if having to choose between expiration of the entire cent and keeping a half, a good argument could be letting it all go as it would not affect SNAP so much as to end it.

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