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Fed Nixes Ariz.’s Food Stamp Plan

December 3, 1998

PHOENIX (AP) _ The federal government has rejected Arizona’s proposal to let a private company run its food stamp program, a decision that could bode ill for other states seeking to privatize state-run benefits.

Wednesday’s denial marked the first time the Department of Agriculture, which oversees the food stamp program, has made a ruling about state requests for privatization, a USDA spokesman said.

Wisconsin and Florida have also expressed interest in privatizing food stamp programs, and their requests are being reviewed, he said.

The state had awarded MAXIMUS, a national company that runs benefits programs in other states, the job of moving about 20 percent of the welfare caseload off food stamps and cash benefits and into jobs over the next two years.

But in a letter to state Department of Economic Security Director Linda Blessing, federal officials said Arizona’s proposal didn’t ensure needy families would have ``fair and equitable″ access to the benefits.

Officials also said the program gave no guarantee that fraud and abuse would be detected, or that the program would be open to public scrutiny.

Federal officials were especially critical of Arizona’s proposal to give the private vendor bonus payments for reducing the number of people receiving food stamps. They said the suggestion showed that the proposal doesn’t meet ``the cornerstone of our efforts to guarantee a healthy and nutritious diet to all low-income families.″

About 272,000 Arizona residents receive an average of $78 worth of food stamps each month, while 96,000 of them also get cash welfare benefits averaging $101. Most recipients are children.

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