ALBANY – A reform measure to halt use of Social Services electronic benefit transfer cards in strip joints and casinos was passed by the state Senate last month but the bill remains stuck in the Assembly’s Social Services Committee costing $120 million in federal aid.
Bill S.966, The Public Assistance Integrity Act, passed the Senate Feb. 4, by a vote of 53-4.
Senator Patty Ritchie, R-Huevelton, voted in favor of the measure and opened a petition “to stop the abuse of welfare EBT cards to purchase cigarettes and beer.”
“Welfare benefits are intended to help those who have fallen on hard times, to feed their families and make ends meet, and taxpayer dollars shouldn’t be used to buy booze, cigarettes and lottery tickets,” Ritchie said.
Assemblyman Will Barclay, R-Pulaski, supports the legislation although for the second year in a row the bill remains stuck in the Assembly’s Social Services Committee.
“I am a sponsor on the bi-partisan Public Assistance Integrity Act,” Barclay said. “This bill places common sense reforms that prohibit the use of EBT cards at strip clubs and for the purchase of alcohol, liquor, cigarettes and lotto. Because the Assembly Majority has blocked this legislation, it will cost New York $120 million in federal aid. This will hurt families who are truly in need.”
When people sign up for welfare, they are issued an EBT card, which works like a cash card at any ATM or like a debit card at a store.
The card accesses two separate accounts: Food Stamps and Cash Assistance. Food stamps are tightly regulated – but Cash Assistance is not.
According to the US Department of Health and Human Services, the federal Middle Class Tax Relief and Job Creation Act of 2012 added a requirement for states receiving Temporary Assistance to Needy Families grants to “maintain policies and practices as necessary to prevent assistance provided under the State program funded under this part from being used in any electronic benefit transfer transaction in any liquor store; any casino, gambling casino, or gaming establishment; or any retail establishment which provides adult-oriented entertainment in which performers disrobe or perform in an unclothed state for entertainment.”
Failure by New York state’s assembly to pass the bill by Feb. 22 resulted in a $120 million loss of federal aid to the state.
The body of the bill that did pass the Senate cites constituent complaints along with information collected for a WNYT NBC Albany news story as part of the reason the updated legislation is necessary.
“Constituents from across our Senate District, NY have logged complaints about misuse of public funds for items including liquor, alcohol, tobacco and lottery tickets,” the bill states. “Additionally, a recent report from WNYT in Albany examined records from 11 counties and showed tens of thousands of dollars in cash assistance had been withdrawn from ATMs located at adult entertainment clubs, OTBs, liquor stores and beverage and tobacco retailers.”
As the result of a Freedom of Information Act request for records of EBT withdrawals from ATMs, the November 2011 WNYT news report titled “Public assistance money withdrawn from questionable places” uncovered questionable withdrawals community wide in the Capital Region.
“We discovered that somebody took out $65.50 at Di Carlo’s Gentlemen’s Club at 2:20 a.m. one morning. At OTB, $388 was withdrawn. At the old Sneaky Pete’s Nightclub in Albany, recipients took out $771.50 with every transaction after midnight and more than $ 7,7000 dispensed from the ATM at Troy Discount Beverage and Tobacco – where shelves are stocked with cases of beer, packs of cigarettes, cigars and a machine full of lottery tickets,” the news report states.
WNYT news did a follow-up report the last time the bill stalled in the Assembly in February 2013, with similar findings.
Both reports note that it is not possible to determine whether money withdrawn from an ATM was actually spent at that establishment, and even if it was, what the money was used to purchase.
The reports conclud that without costly transaction oversight by the Department of Social Services it would be impossible for lawmakers to know how cash obtained with an EBT card is spent.
During Fulton’s Feb. 4 Common Council meeting, 1st Ward Councilor Tom Kenyon, elected in November on the Conservative line, lauded Ritchie’s efforts to end EBT abuse but would like to go even further.
Citing a situation where a welfare recipient chose to stay in Fulton because it was easier than trying to get benefits in Syracuse, Kenyon asked Fulton’s County Legislators, “What is Onondaga County doing that is different than Oswego County?”
While local lawmakers look for answers, bill A02386 remains stuck in the Capitol Building and the Assembly’s Social Services committee has not included discussion on the committee’s next meeting calendar slated Tuesday (March 4).