With Thanksgiving nearly upon us, it seems fitting to give thanks for a key component of the nation’s safety net for low-income families – the Food Stamp Program. More and more Californians with incomes below or near the poverty line turned to the program to help put nutritious food on their tables as the recession deepened and job losses mounted over the past two years. The number of Californians receiving food stamp benefits reached nearly 2.9 million in August 2009, an increase of more than 814,500 (39.4 percent) from the August 2007 level of nearly 2.1 million. By comparison, the number of Californians receiving food stamp benefits during the prior two-year period – August 2005 to August 2007 – increased by just 3.1 percent.
The impact of food stamp benefits, which are 100 percent federally funded, extends beyond the households that receive them. Food stamp benefits free up income that low-income households would otherwise likely spend on food, thereby allowing families to increase their purchases of clothing and other necessities, which in turn boosts economic activity. Economists estimate that every dollar spent on food stamp benefits increases economic activity by $1.73 – a significant “bang for the buck.” Increased economic activity, in turn, boosts state sales tax revenues because many purchases that food stamp households make are subject to the sales tax. In short, increasing the number of Californians who receive food stamp benefits not only helps low-income families avert hunger, but also draws more federal dollars into the state, boosting both economic activity and state revenues.
— Scott Graves