New Jersey has the opportunity to generate a substantial return on an investment while ensuring tens of thousands of residents keep important nutritional benefits -- but only if the governor acts quickly. Will he follow the lead of his colleagues in Pennsylvania and New York and at least three other states, or will he allow a golden opportunity to pass New Jersey by? If he chooses to put New Jersey first, the state could generate $54 in federal funds and $93 in economic activity for every dollar invested, all while preventing an estimated 160,000 vulnerable households from suffering a loss in benefits. Given these facts, the decision should be a no-brainer.
The cuts to the federal Supplemental Nutrition Assistance Program (SNAP, the new name for food stamps) that can be staved off were made in the new Farm Bill that was signed into law last month. They apply only to the 15 states, including New Jersey, that coordinate energy assistance with SNAP. The typical household in these states would receive a monthly cut of $90, the equivalent to 60 meals. The clock is ticking: The federal government gave states just two months to start implementing these cuts -- a deadline that will be here before we know it.
So how can Gov. Chris Christie avoid the cuts?
The Farm Bill increases the minimum amount that a household must receive for energy assistance to qualify for additional SNAP benefits. The increase, to $20 from $1 per month, would cost New Jersey about $3.2 million. But it appears that the cuts can be addressed without using any state funds. Some other states are simply using federal surplus funds in their energy assistance program to pay for the increased costs. But even if New Jersey had to use its own funds, the payoff in terms of economic activity would more than worth it. (The state could also save the administrative costs required to reprogram computers for the SNAP change.)
Forestalling this cut would also avoid another hit to New Jersey’s ailing economy. According to Moody’s Analytics, every dollar in SNAP benefits generates $1.73 in economic activity. Avoiding the SNAP cuts would also avoid a loss of $300 million in economic activity and many jobs, particularly in the food industry. SNAP is one of the best investments the state can make; it would be financially and morally imprudent not to protect it.
And if any state should avoid this cut, it is New Jersey, because the need is great here as the state continues a long slow crawl out of the recession. For example, New Jersey has the highest foreclosure rate and percentage of long-term unemployed in the nation. In 2012, it was one of only a handful of states where family poverty actually increased even as the national economy continued its recovery.
Given the somber facts about our slower-than-average recovery, it should come as no surprise that New Jersey’s hunger problem is getting worse, not better. While the average monthly number of SNAP participants hardly budged nationally from 2012 to 2013 (it increased by 1 percent), in New Jersey it increased 6 percent, the fifth-highest uptick in the nation, to 876,000 individuals. The last thing that New Jersey needs is another cut on top of the permanent reduction in benefits that was implemented starting last November to all SNAP households. It resulted in a $90 million annual loss in SNAP in New Jersey, which reduced benefits by an average of $29 a month per family.
Given the terrible harm this cut would have on vulnerable working families, the adverse impact on the state’s economy and the fact it can be avoided with little or no state dollars, the decision before the governor should be clear.