Public Assistance as Economic Stimulus Ending Hunger in Oregon:

2012 Food Security Summit

Gregory ToomanDepartment of Human Services,

State of Oregon

Jessica ChanayPartners for a Hunger-Free Oregon

Public Benefits: Food Assistance Programs

National School Lunch Program (NSLP)School Breakfast Program (SBP)Summer Food Service Program (SFSP)Child & Adult Care Feeding Program (CACFP)Women, Infants & Children (WIC)Supplemental Nutrition Assistance Program

(SNAP)

National School Lunch Program2009-10 school year

Served more than 311,000 studentsMore than 1,300 schools across the stateMajority were free & reduced-price students

(families earn less than 185% of the Federal Poverty Level)

$95 million in federal dollars to local economies

Farm to School efforts ramping up

School Breakfast Program2009-10 school year

Served more than 139,000 studentsMore than 1,200 schools across the stateMajority free & reduced-price students

(families earn less than 185% of the Federal Poverty Level)

$31 million in federal dollars to local economies

Summer Food Service Program (SFSP) - 2010

Served more than 34,000 kids dailyMore than 600 locations across the stateMajority free & reduced-price students

(families earn less than 185% of the Federal Poverty Level)

$4 million in federal dollars to local economies

Child & Adult Care Feeding Program (CACFP) - 2010

Served 15,000+ kids in child care settingsMore than 2,500 homes/560 centersMajority are low-income children

(families earn less than 185% of the Federal Poverty Level)

$25 million in federal dollars to local economies

Women, Infants & Children (WIC) - 2010

Served more than 113,000 women, infants & children

More than 52 locations statewideAll participants are low-income

(families earn less than 185% of the Federal Poverty Level)

$80 million in federal dollars to local economies

Supplemental Nutrition Assistance Program (SNAP) - 2011

Nearly 800,000 Oregonians (433,000 households) in December

All participants are low-income(Household earns less than 185% of the Federal Poverty Level)

More than $1 billion in federal dollars to local economies

Mark M. Zandi, Chief Economist, Moody’s Analytics:

"If someone who is literally living paycheck to paycheck gets an extra dollar, it's very likely that they will spend that dollar immediately on whatever they need - groceries, to pay the telephone bill, to pay the electric bill."

Economic “Bang for the Buck”

Economic Stimulus and Public Assistance

Economic impact models ◦Quantify how money flows through a community◦Assume regional economy is static, until other

forces intervene

Public assistance as economic stimulus◦Best defined as aid to households or persons who had

not previously accessed those services

Economic Impact Models: How they work

Public assistance spurs activity throughout the wider economy:

Increased household purchasing power◦Social assistance increases overall household spending.

Economic activity beyond initial point of purchase ◦Economic activity in one business leads to additional

spending by employees of those and other businesses.

Transportation

Labor

SNAP Participatio

n

Change in Demand,

Retail Food

Grocery Store

Warehousing/Distribution

Increased spending beyond the point of purchase

Increased spending beyond the point of purchase

Transportation Increase $

Additional Labor

New Trucks

Rent Retail Food

$ Leave

IMPACTSDirect Impact

◦More jobs & spending based on increase in demand for goods & services.

Indirect Impact◦ Increase in spending by industries that provide goods and services

to industries directly impacted.

Induced Impact◦ Increase in household spending by individuals employed by

industries directly and indirectly impacted.

NOTE: Indirect and Induced impacts include TAX IMPACT – increase in local taxes due to increased economic activity.

Building a SNAP Impact Model

SNAP reduces the portion of income devoted to food spending, allowing the purchase of other essential goods and services.

SNAP improves overall household income, therefore, overall household spending should be modeled.

Patterns of Household Spending:

HOUSEHOLD INCOME <$10k HOUSEHOLD INCOME$100-150k

Rank Industrial Sector$ in

Millions Rank Industrial Sector$ in

Millions

1 Hospitals, physicians, etc. 694.0 1 Mortgage 1990.0

2 Mortgage, Rents 493.7 2 Hospitals, physicians, etc. 1893.3

3 Banks/Insurance/investments 116.3 3 Wholesale trade businesses 760.6

4 Food services/drinking places 113.0 4 Food services drinking places 749.1

5 "Rest of world adjustment" 111.2 5 Retail Stores (Food & Vehicle) 604.8

6 Wholesale trade businesses 109.6 6 Banks/Insurance/investments 493.8

7 Telecommunications 97.4 7 College/University 366.4

8 Petroleum Products 96.7 8 Petroleum Products 358.7

9 Retail Stores (Food & Vehicle) 87.2 9 Telecommunications 297.4

10 Electric Utilities 75.7 10 Light truck manufacturing 156.1

Building a SNAP Impact Model

Average monthly SNAP Income: $290

Income Assumption (family of 3): ◦Income at 100% FPL ~ $18,000/year.◦Income at 133% FPL ~ 24,000/year.

Household Income Matrix: ◦15,000-25,000/year

Counties for Modeling

Impact Model for Three Oregon Counties: Deschutes (pop 157,733) Klamath (pop 66,380) Malheur (pop 31,313)

Does Rural vs. Urban Matter?◦Yes – Due to “economic leakage” via the limits

of regional purchasing

Profile: Deschutes County

Average monthly caseload: 13,546

Value at $209 per case: $3,928,282

Yearly SNAP expenditure: $47,139,384

Additional economic impact: $26,410,378◦As employment income: $14,581,230◦As jobs (FTE): 397.4◦As Indirect local taxes: $2,672,763

Profile: Klamath County

Average monthly caseload: 6,861

Value at $209 per case: $1,989,574

Yearly SNAP expenditure: $23,874,888

Additional economic impact: $8,949,405◦As employment income: $5,325,174◦As jobs (FTE): 144.1◦As Indirect local taxes: $878,907

Profile: Malheur County

Average monthly caseload: 2,608

Value at $209 per case: $756,436

Yearly SNAP expenditure: $9,077,232

Additional economic impact: $2,954,094◦As employment income: $1,776,265◦As jobs (FTE): 47.9◦As Indirect local taxes: $275,488

Increased SNAP Participation and Economic Stimulus

Each new SNAP household represents $209 in Direct economic impact (avg. SNAP benefit) per month, PLUS:Deschutes: $162 in additional impactKlamath: $108 in additional impactMalheur: $94 in additional impact

In Conclusion…Increased public assistance provides local

economic stimulus in the same way as other improvements in economic activity.

Food aid increases a household standard of living by decreasing amount of income spent on food.

SNAP and other forms of food aid can be seen as PURE STIMULUS – they are federally based and do not include state general funds.

Questions:

Who should receive this information in your community?

What is the best way to share this information?

Other thoughts…?

Question:

What other types of information could you use for

community education?

Thank you!