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:
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