Saved by the net: Food assistance programs help mitigate recession’s impact

This week we released the November issue of Numbers You Need (PDF), our monthly look at key data on the state’s economy  and budget. As we reported in the bulletin, one of the clearest signs of the depth and length of the economic downturn is that participation in the Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps, rose for the seventeenth consecutive month in August. The program provided benefits to 524,536 people in August, an all-time high, and an increase of 27.3 percent compared to March 2008.

The importance of SNAP to Oklahomans is at least two-fold. As shown by the latest numbers released this week by the USDA, food insecurity remains prevalent in Oklahoma, with an average of 14.0 percent of people in the state over the period of 2006-08 indicating that they were unable at times over the year to afford adequate food.  For hard-pressed families, SNAP benefits provide an essential support to family budgets, allowing for the purchase of weekly groceries where otherwise children, seniors, and working-age adults might go hungry or without adequate nutrition. The program now serves one out of every seven Oklahomans and one out of four children. In August, the average monthly SNAP benefit was $127 per person and $296 per household.  This is a substantial increase from last September, when the average monthly benefit was $97 per person and $237 per household. The increase reflects both a 13.4 percent in SNAP benefits that was part of the stimulus package approved by Congress this spring, and declining household incomes, which has left families eligible for higher benefits amounts.

Secondly, the Supplemental Nutrition Assistance Program is of great importance to the economy of the state and local communities. In FY ’09, the USDA value of SNAP benefits in Oklahoma was $592 million, according to the annual report of the Department of Human Services, which is equal to about one-half of one percent of the state’s total GDP (PDF).  SNAP expenditures averaged $166 per person for the entire state population, and exceeded $300 per person in some low-income counties, such as Adair, Choctaw, McCurtain and Seminole. Because SNAP benefits are spent in local grocery stores and markets, they have a powerful economic mutliplier effect – according to the analysis of Mark Zandi of Moody’s Economy.com, every $1.00 increase in federal food stamp benefit produces $1.73 in increased GDP, an amount exceeding any other form of federal spending enacted as part of the stimulus package. Finally,  SNAP benefits are 100 percent federally funded, so the program is not jeopardized by state revenue shortfalls or budget cuts during the economic downturn.

We hope that DHS’ monthly string of new caseload records will soon end as an economic recovery begins to take hold. Until then, there is little doubt that SNAP is serving a key role as a safety net program mitigating the severity of the downturn on Oklahoma families and communities.