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Feds want welfare cards banned from liquor stores, casinos

Businesses say they already refuse EBT transactions

WASHINGTON – Rod Aranki sees it “a couple times a week” – people coming into his Phoenix store, the Liquor Wheel, and trying to buy alcohol with their welfare benefits.

“People do try,” said Aranki, who turns away the people who try to buy alcohol with their Electronic Benefit Transfer (EBT) cards, the debit cards that access their Cash Assistance benefits from the state.

“Nobody really asks because they know I won’t let them,” Aranki said. “Given the opportunity, I’m sure they probably would.”

Now,  federal proposal aims to take away from welfare recipients the opportunity of using EBT cards in liquor stores, casinos or strip clubs by forcing states to prohibit their use in those businesses.

The “welfare integrity” bill, which passed the House 395-27 this month, would give states two years to get such restrictions in place. States that don’t do so would see their federal Temporary Assistance for Needy Families grant cut by 5 percent a year until they meet the requirements.

But state officials and business owners in Arizona say the state is already dealing with the issue, either informally like Aranki or formally like Mark Brnovich.

Brnovich, the director of the Arizona Department of Gaming, said Arizona has been working to keep welfare dollars out of the state’s casinos for years. State law bars EBT cards from being used at tribal gaming facilities and ATMs at casinos, he said.

“It’s not really an issue here in Arizona because we are so vigilant to make sure it doesn’t happen,” Brnovich said. “We test every single ATM prior to going live in gaming casinos and make sure we test them on a regular basis to ensure they do not accept EBT cards or any other cards designed to help needy families and children.

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“It’s important any time a government entity or agency, whether federal or state, is providing services to needy individuals or families that … they ensure those funds are being used for what they were intended to be used for,” Brnovich said.

He said the state became aware of the issue after news reports showed other jurisdictions, like California, reporting high numbers of welfare dollars being withdrawn at casinos.

A national organization representing strip clubs said it also learned about the issue through news reports and legislative proposals.

“We thought it was atrocious,” said Angelina Spencer, executive director of the Association of Club Executives. Welfare money is “meant for children,” she said, and no legitimate operators would want to see that money spent in their businesses.

At several Phoenix-area strip clubs, employees said they had never heard of a patron trying to use an EBT card in the business. But that doesn’t mean there’s not a need for legislation preventing it, said an employee at Bourbon Street who identified himself as a manager, but declined to give his name.

“I can’t imagine someone saying that’s not a good idea – other than the strippers,” he said.

But at least 27 members of Congress do think it’s a bad idea, including Rep. Raul Grijalva, D-Tucson. He was the only Arizona lawmaker to vote against the bill.

A spokesman for Grijalva said that while the bill seems like a “really great piece of legislation,” it won’t actually stop people from spending money in the targeted businesses. Adam Sarvana notes that the bill would only control where people use their EBT card or where they withdraw cash from their welfare accounts – not where they spend it once the cash is in their hands.

“As far as how that would be done, I have no idea,” Sarvana said of the problems of tracking cash spending.

Besides, he said, for many welfare recipients the closest ATM may be in a liquor store or casino.

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“You’re kind of hitting the poorest of the poor with a bill like that,” he said. “It sounds ridiculous to us.”

The state provided 18,750 families with funding last year under the Cash Assistance program, which is designed to help families meet basic needs of food, housing and the like. To qualify, families cannot earn more than the federal poverty level – $1,838 for a family of four – unless the head of household is not a parent, according to the Department of Economic Security website. Monthly benefits range from as little as $10 up to $791, depending on rent, family size and other factors.

The Arizona Department of Economic Security does not currently track where people use their EBT cards in the Cash Assistance program, spokeswoman Tasya Peterson said in an email. And state law does not restrict the use of EBT cards in liquor stores, said a spokeswoman for the Arizona Department of Liquor Licensing and Control.

Lee Hill said state liquor law is “silent on the topic of what can be accepted” at liquor stores, and that monitoring where welfare assistance is spent is not under the regulatory authority of the department.

“I’m not aware that that’s elevated to a level of concern at this point,” Hill said.

“Only reason it would be on our radar would be if we … saw a trend that is negatively impacting the citizens of Arizona,” she said. “Certainly that would become an issue with us.”

But so far it “hasn’t been a topic of conversation,” she said.

While Hill said she has not heard of a problem with people trying to use welfare dollars for alcohol, Aranki said that having a federal law on the books to prohibit the practice couldn’t hurt.

“If people follow the rules, it shouldn’t be a problem, but you never know what’s going on,” he said.

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Cronkite News Service

While there is no state law keeping a welfare recipient from taking out money at a liquor store or a strip club, some Arizona owners of those businesses said they take it on themselves to ban such 'atrocious' activity.

Arizona’s Cash Assistance Program

  • Arizona’s welfare program, Cash Assistance, provides needy families with a temporary monthly stipend to use for basic needs expenses to help them become self-sufficient.
  • The state has a two-year limit on receiving benefits for the head of household and spouse. Families receive benefits for an average of 10.4 months.
  • Monthly benefits can range from $10 to $791 depending on rent or mortgage payments, the number of qualified family members and the head of household’s relationship to the dependent children.
  • For example, a family of four that pays rent could receive as much as $335 per month.
  • Adult recipients must sign a Personal Responsibility Agreement indicating their agreement to work toward a job and, if applicable, comply with child support payments.