Ponying Up $3.2 Million in Heating Assistance to Preserve $172 Million in Nutritional Benefits is a No-Brainer

April 21st, 2014  |  by  |  Published in Economic Opportunity, NJPP Blog: As a Matter of Fact ...

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The clock is ticking on a to-die-for payoff.

Congress has approved legislation that would allow about 160,000 struggling working New Jersey households the opportunity to continue to receive about $172 million in SNAP (food stamps) benefits annually if the state will put up a mere $3.2 million to help with heating bills. That is a guaranteed payoff of 54:1, which would make any Wall Street broker green with envy.

If New Jersey does not act before May 5, new recipients of SNAP will not be eligible for this assistance. If the administration delays for another four months after that, every family that currently receives this supplemental SNAP assistance will lose it.

When asked by the Office of Legislative Services if the administration would pursue this opportunity, the answer came back “we’re looking into it.” Our neighbors in New York and Pennsylvania have already signed on, as have eight other states (only 15 states are affected by the potential cutback).

The economic impact of SNAP is substantial; it is one of the most effective ways to stimulate the economy. Every dollar in SNAP benefits generates almost twice that in economic activity. Thus the $3.2 million investment would actually give the overall economy a $300 million boost.

Even better, the state may be able to use existing federal heating funds for the $3.2 million so there would be no state cost at all. In fact, the state could save money in the deal because it would avoid the need to invest in information technology changes to calculate the new, reduced benefits.

This economic payoff is welcome news in a state where the economy has been growing at a sluggish rate. According to the Bureau of Economic Analysis, New Jersey’s economic growth ranked 36th lowest in 2012.

But this is not only about the economy; it’s also about people who are going hungry in the Garden State. The economy may be slowly improving in New Jersey, but the benefits aren’t trickling down to low-income families. Consider these startling facts:

• SNAP participation continues to increase in New Jersey even as it is flat nationally.

• New Jersey has the highest share of long-term unemployed in the nation; about half of the state’s jobless have been out of work for at least six months.

• New Jersey has recovered only 37 percent of the jobs lost in the Great Recession, far fewer than our neighbors in New York (172 percent) and Pennsylvania (78 percent), as well as the nation as a whole (95 percent).

• New Jersey was one of only five states where the share of families living below the poverty level increased in 2012.

• New Jersey is the fourth most expensive state to rent an apartment.

• The Garden State has the highest foreclosure inventory rate in the nation.

A failure to prevent a reduction of $90 a month in SNAP for 160,000 households will only make these conditions worse. These are some of the most vulnerable people in our state: seniors on fixed incomes, working families who have high child care costs and others who can barely survive in high cost of living New Jersey. According to the federal government, 12 percent of all households in New Jersey are already struggling with food. The state should not make the situation worse by passing up this opportunity.

Just six days before the federal deadline for New Jersey to act, the commissioner of Community Affairs, Richard Constable, is scheduled to appear before the Senate budget committee. Let’s hope he’s asked about the status of a sure 54:1 bet.


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