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  • Linda Davis talks about her need for food stamps while sitting at her table at her home in the Pittsburgh suburb of Swissvale, Pa. The Associated Press/Keith Srakocic

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February 9, 2012

Asset limit hits families

Michigan and Pa. put limits on citizens seeking food aid

THE ASSOCIATED PRESS Associated Press

HOWELL — The 2010 Buick Enclave parked in her garage kept Michigan resident Renee Moore from getting food stamps for two months last year, even though her family's income had dropped to below the poverty level, her husband's Ford Explorer had 300,000 miles on it and her family had less than $1,000 in the bank.

The reason? In the eyes of the state, she owned too much.

Unlike other states that moved away from setting limits on what families like the Moores can own before they qualify for help, Michigan last year made it harder for thousands of residents to become eligible for food stamps by adopting new limits on what people can own. Pennsylvania also is toughening its so-called asset test, adding new restrictions on who gets government help.

The move to redefine who's truly needy comes after cash-strapped states saw a surge of applications for food stamp aid during the economic downturn. Still, leaders maintain the assistance needs to be targeted to those who need it most.

"We're asking tough things, but we had a huge budget deficit and we had to work through that," Republican Michigan Gov. Rick Snyder said. "We always try to help the people in the greatest need."

Advocates for the poor have fought the new limits in both states, and while both have scaled back their original limits amid criticism they were too harsh, the changes still are expected to push thousands off the rolls.

In Michigan, families like the Moores were caught in limbo while the state worked out how much was too much to own.

When the limits were put into place last fall, recipients couldn't have more than $5,000 in the bank or own cars worth more than $15,000. That's when Moore, her husband and the couple's 9- and 17-year-old sons lost the $419 in monthly aid they were receiving because the Buick Enclave they inherited when Renee's mother died made them ineligible.

Losing the assistance for several months worsened the family's financial situation. Moore, 51, is racing to finish her associate's degree in marketing and an internship so she can find a job. Her husband continues to look for still-scarce carpentry and construction work.

"We don't want to depend on the government to help us," she said. "I'm trying. He's trying. We just need a little help."

Now, Michigan lets families exclude one vehicle and apply for food stamps as long as their second vehicle isn't worth more than $15,000. The Moores and about 1,484 households were able to apply for aid again after the guideline was relaxed.

In Pennsylvania, regulations set to take effect May 1 mean that households can have no more than $5,500 in eligible assets, including cash, checking and savings accounts, other investments, and things like boats and planes. One car and a home are excluded, as are life insurance and pension plans, family savings accounts and personal property.

If an elderly or disabled person lives in a household, the limit is $9,000. The state originally wanted to impose a limit of $2,000 per household, and $3,250 for a household with an elderly or disabled member.

About 4,023 Pennsylvania households are expected to lose their benefits when the limits take effect May 1. About 880,000 households now get food assistance.

"I've told them that I think this ... is not exactly what we need at this time with the economy the way it is," said Linda Davis, 64. The resident of the Pittsburgh suburb of Swissdale has written letters to Pennsylvania Gov. Tom Corbett to try and stop changes that could deny her $16 in monthly food stamps.

Food stamp rolls grew exponentially after the 2008 recession and financial meltdown left many jobless or struggling to pay their mortgages and make ends meet. Federal statistics show the annual average number of food stamp recipients grew 58 percent from 2008 to 2011. Households receive an average monthly benefit of $282, and recipients in some states can lose benefits after three months if they're not working or applying for jobs.

The moves to add new limits are bucking the national trend. Thirty-six states and the District of Columbia have no asset test to get food stamps, and 16 eliminated it in the past 2½ years, according to the Washington-based Corporation for Enterprise Development.

As the need for assistance grew, Rochelle Finzel of the nonpartisan National Conference of State Legislatures said, asset tests were seen as a hindrance to getting families back on their feet.

"There was an understanding families need assets" to have a financial cushion as they work their way out of poverty, said Finzel, a welfare policy analyst.

Three former Michigan budget directors who have worked under both Republican and Democratic governors warn that requiring the more than 900,000 Michigan households receiving food stamps to file documents on their assets will overwhelm state caseworkers and possibly cost the state money if its error rates go up and it gets hit with federal fines.

So far, those extra costs have been "negligible," said Department of Human Services spokesman Dave Akerly.

States such as Texas, Utah and California are holding on to asset tests. Like Michigan, Texas says applicants can't get food stamps if they have more than $5,000 in the bank and a second vehicle worth more than $15,000.

Alaska, Arkansas, Indiana, Kansas, Missouri, South Dakota, Utah, Virginia and Wyoming don't count vehicles as assets, but limit food stamp recipients to $2,000 in assets and $3,000 if the household includes someone elderly or disabled. Illinois and Tennessee are among the states that eliminated asset tests for food stamps in recent years.

Considering a vehicle an asset has been particularly controversial because some argue it helps people look for and keep a job. California lawmakers last year approved a bill doing away with restrictions that kept families on welfare from having a vehicle worth more than $4,650, but Democratic Gov. Jerry Brown vetoed it, saying the state couldn't afford the change.

"In a highway state, a reliable means of transportation is not a luxury, it's a necessity," said the bill's author, Democratic Assemblyman Roger Hernandez.

Jennifer Brooks, director of state and local policy at the Corporation for Enterprise Development, which supports programs that get people out of poverty, said states are finding that recipients are able to move off assistance faster if they can build up savings. Yet "the presence of an asset test, no matter how high it is, sends the signal that people shouldn't save," she said.

That's not the way Michigan Department of Human Services Director Maura Corrigan sees it. Corrigan said applicants who still own expensive cars or a second home they haven't put up for sale shouldn't qualify for help. She was stunned during a visit earlier this year to a DHS office to see a food stamp applicant's Hummer parked outside.

"Our concern is protecting the program for the truly needy," Corrigan said.

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