Transcript of MPN contributor Alicia Adamczyk's interview with Judy Putnam, Communications Director for the Michigan League for Human Services..
MPN: First, I just wanted some background information on the League for Human Services, like what issues you play a role in.
Ms. Putnam: Well the League is a 100 year-old organization as of next year. We’re an advocacy group. We like to say we use data-driven advocacy to help improve the lives of low income people. So we do research, and make policy, lobby and try to improve policy for people with low-income. One of the big projects we do, you might have heard of it, is Kids Count, so we do annual well-being reports, workforce development, poverty issues, health care. So we get a pretty broad perspective.
MPN: I know a little bit about the Food Stamps program, but I just wanted a little more background information on that. Where the funding comes from, and who it benefits and how it’s used.
Putnam: It’s called the Food Assistance Program, or FAP in Michigan, it’s federally funded, the benefit level and who qualifies is controlled at the federal level. It’s a program through the United States Department of Agriculture, it benefits people with low-income living below poverty or near poverty. Almost 2 million people in Michigan qualify. At the national level it’s called SNAP, are you familiar with that?
Putnam: Ok, well in Michigan we call it FAP and a lot of people call it Food Stamps because that’s what it was called for many many years...The average amount of food assistance it gives, it comes on a bridge card, which also gives cash assistance...But the food assistance, the average amount in Michigan is $130 a month per person.
MPN: Ok, so then on to the issue, the new asset-based test that was passed...I know the League for Human Services is against this, because it’s so restrictive, but what were some of the proposed benefits of the new policy?
Putnam: Well, I don’t think that there are any (laughs). You might want to ask the Department of Human Services that, but there was, a few months ago there was a lottery winner, who won the lottery, he won quite a bit of money, but he was still eligible for food assistance, because food assistance at that time was based on your income level, not your total wealth. There was a big frap about that, there was a bill introduced just this week that would kind of address that, that we think would be a much better policy to address the situation. Instead of having legislation driven by a single anecdote, it would make a lot more sense to fix the problem that exists. And what is happening is that at the Department, it appears, is trying to cast a very broad net, and it appears it was motivated by this lottery winner. But they’ve made a much broader sweep, like it’s overreaching to find a solution for this narrow problem. The bill introduced is House Bill 5032, it was introduced yesterday, and it would require a notification to the Department of lottery winnings. So, the Department could fix it for lottery winners without hurting so many other people. We’re very fearful that it will really hurt the unemployed, the newly unemployed people who have paid their taxes for many years and maybe now are experiencing some trouble. And maybe they paid cash for a car when they were still working so now they can’t get the help they need because of this new policy. We think it’s very ill-timed, our unemployment is far higher than the average in the country, it was 11.2% in August...so we have a lot of problems with unemployment, a lot of people working part-time when they really want full-time jobs, we have a problem with a lot of people who used to make a decent wage but now the only job they can find doesn’t really pay all their bills, and food assistance was helping in that gap. Food assistance is considered a really great counter-cyclical program, and by that I mean when the economy goes down and people don’t have the income, this is money that not only benefits their families, or individuals...but it also circulates dollars in the local economy. So it’s considered a great counter-cyclical when we have recessions or people qualify for food assistance. What the department is doing is adding this asset test. Do you know what the asset test is?
MPN: I think I have a general idea...I know that they said something like over $5,000 in savings or checking, you wouldn’t qualify and cars couldn’t be valued over $15,000.
Putnam: Right, so let’s say you’re a big family in rural Michigan and you have a few people working, maybe a teenager going to community college and needs a car to get back and forth, so let’s say you have three cars, the total value for all three cars totals more than that $15,000, say $18,000, that $3,000 would be counted in the $5,000 asset-limits...So that is a real big sticking point with the League because 48 states exempt one car, and 33 states do not count any vehicles in their asset tests. So here we are in Michigan, we’re a car state, we produce a lot of cars, we don’t have a lot of public transportation, people use cars to get to school and work. So here we are the car state with high unemployment, and we’re adding an asset test that includes vehicles. It just doesn’t make sense. The other reason it doesn’t make sense is that, as you asked in the beginning, these are all federal dollars, so we’re diverting federal aid from Michigan, we’re not saving any state money, we’re diverting federal aid and we’re putting state dollars at risk. The reason I say that is because in the late 1990s, Michigan had very high food stamp error rates, and that caused about $65 million in penalties to be assessed against the state. So not only are we not saving state dollars, we’re actually putting state dollars at risk at a time when we have very tight budgets and we’re struggling as a state to pay for essential services. It just doesn’t seem like a good time to do this, it’s not the right time for a policy like this. If we really want to keep lottery winners away from food assistance, which is a good idea...if we really want to do that we could crack a more narrow asset test.
MPN: What about other states?
Putnam: I think there are about 30 other states that have implemented asset tests...The trend has been because of this problem with the group of folks who have worked for 20 or 30 years, never been unemployed, now they’re experiencing a rough patch and they may have assets that they’re trying to save for college or retirement...if they’re in a retirement savings account, that doesn’t count, or an education savings account, those don’t count in the assets. But a lot of people just put their money in the bank in a savings account with the idea that they’re going to use it for college or retirement. So, especially, a lot of states are moving away from asset tests because of this very issue. Because you have people who have worked a long time, who have paid in to the system, who paid their taxes. Now they’re out of work having a hard time paying their mortgages and having a hard time finding a new job...so now at the very time they need it, we’re going to say it’s not available to them. And again, these are federal dollars, we’re diverting federal aid from Michigan. So we’re just saying no to federal dollars that help families stay well-nourished and that help spark the local economy, because those dollars turn over very fast in the local economies.
MPN: How are some other organizations and interest groups responding to the new policy?
Putnam: Well, we created a letter, it’s on our website, 114 total [organizations] have signed a letter to Governor Snyder to reconsider this policy. So that’s a lot of groups. We also had a press conference, and people that spoke at that kind of represented the full range of Michigan’s folks...we had groups saying this will hurt children and seniors and people in Michigan...So it’s sort of a head-scratcher at this point at a time when we’re really strapped for resources in Michigan, at a time when people continue to struggle with employment and unemployment and underemployment, that we would take on this new policy at this time. It feels a little tone-deaf to the difficulties that families are facing in Michigan.
MPN: I also read about a court ruling that ruled against this policy. Will this hold up?
Putnam: There was a group, The Center for Civil Justice, that filed an injunction I believe to stop it on the behalf of families on [cash] assistance. And what they were saying was that families weren’t given enough time or enough notice or being told specifically why they were being dropped. And so it violates Due Process. And the judge agreed and said that the Department has to do better...the Department has not done a good job in telling people what’s been going on with their [cash] assistance. So I don’t know what will happen to that case, but that will at least give people another month to prepare, or to look for work. We know that maybe some people will find jobs but there aren’t a lot of jobs out there...so there’s a concentration of these families in Detroit and Flint and in some zip codes this means that 1 out of 10 kids will be losing this support because of these time limits...I would also like to point out one thing that the Governor has been saying, just that he needs to qualify a little bit more...he tweeted this that a third of the people on assistance have been on it for ten years or longer...we’re sure what he means is that a third of the people being cut from assistance...have been on it for ten years, not everybody...I don’t think he’s misstating it on purpose, but he has been misstating it....Just pay attention to how they qualify it.
MPN: Ok. So you had the press conference, and the letter from the other organizations. What are the next steps?
Putnam: Well, that’s a good question. I think advocacy groups will be continuing to look for ways to get the legislature involved, to get the governor to rethink this, and then there’s the lawsuit...that may buy some more time for some of these families.