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Public Assistance as Economic Stimulus

Public Assistance as Economic Stimulus. Ending Hunger in Oregon: 2012 Food Security Summit Gregory Tooman Department of Human Services, State of Oregon Jessica Chanay Partners for a Hunger-Free Oregon. National School Lunch Program (NSLP) School Breakfast Program (SBP)

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Public Assistance as Economic Stimulus

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  1. Public Assistance as Economic Stimulus Ending Hunger in Oregon: 2012 Food Security Summit Gregory Tooman Department of Human Services, State of Oregon Jessica Chanay Partners for a Hunger-Free Oregon

  2. 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) Public Benefits: Food Assistance Programs

  3. Served more than 311,000 students • More than 1,300 schools across the state • Majority 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 National School Lunch Program2009-10 school year

  4. Served more than 139,000 students • More than 1,200 schools across the state • Majority free & reduced-price students (families earn less than 185% of the Federal Poverty Level) • $31 million in federal dollars to local economies School Breakfast Program2009-10 school year

  5. Served more than 34,000 kids daily • More than 600 locations across the state • Majority free & reduced-price students (families earn less than 185% of the Federal Poverty Level) • $4 million in federal dollars to local economies Summer Food Service Program (SFSP) - 2010

  6. Served 15,000+ kids in child care settings • More than 2,500 homes/560 centers • Majority are low-income children (families earn less than 185% of the Federal Poverty Level) • $25 million in federal dollars to local economies Child & Adult Care Feeding Program (CACFP) - 2010

  7. Served more than 113,000 women, infants & children • More than 52 locations statewide • All participants are low-income (families earn less than 185% of the Federal Poverty Level) • $80 million in federal dollars to local economies Women, Infants & Children (WIC) - 2010

  8. 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 Supplemental Nutrition Assistance Program(SNAP) - 2011

  9. 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."

  10. Economic “Bang for the Buck”

  11. 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 Stimulus and Public Assistance

  12. 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. Economic Impact Models: How they work

  13. SNAP Participation Change in Demand, Retail Food Labor Warehousing/ Distribution Grocery Store Transportation Increased spending beyond the point of purchase

  14. Transportation Increase $ Additional Labor $ Leave New Trucks Increased spending beyond the point of purchase Rent Retail Food

  15. Direct 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. IMPACTS

  16. 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. Building a SNAP Impact Model

  17. Patterns of Household Spending:

  18. 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 Building a SNAP Impact Model

  19. 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 Counties for Modeling

  20. 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: Deschutes County

  21. 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: Klamath County

  22. 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 Profile: Malheur County

  23. Each new SNAP household represents $209 in Direct economic impact (avg. SNAP benefit) per month, PLUS: • Deschutes: $162 in additional impact • Klamath: $108 in additional impact • Malheur: $94 in additional impact Increased SNAP Participation and Economic Stimulus

  24. 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. In Conclusion…

  25. Questions:Who should receive this information in your community?What is the best way to share this information?Other thoughts…?

  26. Question:What other types of information could you use for community education?

  27. Thank you!

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