California is missing out on nearly $4.9 billion in federal nutrition benefits, because more than 3.6 million eligible, low-income residents are not participating in the food stamp program, according to an analysis released Wednesday by a food policy group.
Food stamp usage has grown rapidly since the recession, climbing 19.5 percent from fiscal years 2007-08 and 2008-09, according to the California Department of Social Services.
Still, fewer than half [PDF] – 48 percent – of eligible Californians participate in the federal food stamp program, known here as CalFresh.
California Food Policy Advocates calculated that if every eligible participant enrolled in CalFresh, the state would net an additional $4.85 billion in federal funding. And there could be even greater financial gains, the group said, because nutrition assistance frees up income for other taxable spending.
The USDA says that every dollar in food assistance generates $1.79 in economic activity [PDF]. For California, enrolling all eligible individuals would yield nearly $8.7 billion in economic activity, the group found.
Nutrition benefits – funded entirely by the federal government, which also shares 50 percent of the program's administrative costs – would also benefit state and county coffers.
The state could collect $158 million more in sales tax revenue if all eligible participants enrolled in CalFresh, the group said. More sales tax revenue would bring an additional $40 million to California's 58 counties.
At the very least, counties are missing out $120,222 in CalFresh benefits and $215,197 in associated economic activity – as is the case for Yuba. Here are the five counties losing out on the biggest bucks, as estimated by the California Food Policy Advocates:
- Los Angeles – $1.35 billion in food benefits, $2.4 billion in economic activity
- San Diego – $354 .4 million in food benefits, $634.4 million in economic activity
- Orange – $287.8 million in food benefits, $515.1 million in economic activity
- Riverside – $211.9 million in food benefits, $379.3 million in economic activity
- Alameda – $106.8 million in food benefits, $191.2 million in economic activity
California must do more to to increase participation in the nutrition program, said Tia Shimada, a nutrition policy advocate at California Food Policy Advocates and author of the report.
"In these times when Californians and households are struggling to get by, to meet their basic needs, if we can find ways to improve participation in CalFresh and make people eligible, it's something we need to do," she said.
The report identifies a number of barriers to the nutrition program.
For example, California requires that all adults receiving CalFresh benefits be photographed and electronically fingerprinted. The intention is to prevent fraud – namely a person receiving benefits in multiple counties or under multiple names.
But the state auditor has twice found that the fingerprinting system's $17 million annual price tag outweighs its benefits. A USDA report [PDF] last year found that participation was 7 percentage points lower in states that use biometric technologies, including finger imaging.
The state has already begun initiatives to boost participation. The program rebranded itself as CalFresh just last month, reflecting changes like the elimination of paper stamps.
It's in the process of adopting semi-annual reporting, which would require participants to report their income and household status every six months instead of the current three to maintain benefits.
California is the only state that requires such frequent reporting, which creates more paperwork and less continuity in participation, the report said. The USDA is scheduled to assess the state's progress toward a simplified reporting system in February.