NewsTracker Tax and Budget

Governor Gets Bill Restricting Use of Welfare Cards

Legislation aimed at curbing the abuse of Electronic Benefit Transfer, or EBT, cards by people receiving public assistance passed the Tennessee House of Representatives 90-2 on Monday.

House Bill 119, sponsored by Terri Lynn Weaver, is now headed to the governor’s desk. The House conformed the legislation to Senate Bill 244, which passed in the upper chamber 30-0 earlier this month. The bill bans the use of a recipient’s EBT card in liquor stores, casinos, gaming establishments or adult cabarets.

Representatives voting “no” were G.A. Hardaway and Johnnie Turner, both Memphis Democrats.

“This bill places the strictest possible limitations on the use of EBT cards,” said Weaver, a Republican from Lancaster. In initial form, HB119 included a prohibition on the purchase of tobacco products, but had to be amended because it would have conflicted with federal law, she added.

Passage of the legislation brings Tennessee into compliance with the federal Middle Class Tax Relief and Job Creation Act of 2012, which is designed to prevent Temporary Assistance for Needy Families recipients from abusing their benefits.

The bill also bans the use of EBT benefits at an ATM located inside a liquor store, strip club, casino, or gaming establishment. In addition, it assigns civil penalties to businesses that sell those products and accept EBT benefits as payment in violation of the law. The fine for a violation by the seller would be $1,000 for the first violation, $2,500 for the second violation within five years, and $5,000 for a third or subsequent violation within five years.

Rep. Vance Dennis, R-Savannah, explained that TANF benefits, which are a cash payment of about $185 on average to an individual, are loaded onto the EBT cards. Currently, there are no restrictions on where that cash money can be used. “So right now, they can use that in a strip club, in a bar, in a casino, the type places that you’re prohibiting,” Dennis said. “Your bill would prohibit in these certain locations that are listed from them getting those funds there. Welfare cash they can get right now wherever they want to use wherever they want.”

“That is correct,” Weaver replied.

Rep. Joe Carr, R-Lascassas, asked if there were potentially any ramifications if the General Assembly failed to pass the legislation. Weaver acknowledged that if the legislation failed to pass the state would lose federal matching dollars, because the Middle Class Tax Relief act required states to adopt the same restrictions as the federal law.

The legislation came after a report was released last summer by the Beacon Center of Tennessee, which documented numerous examples of suspicious card-use by welfare recipients. According to Beacon’s report, EBT cards were swiped at liquor stores, nightclubs, malls, retail outlets, and adult-entertainment establishments, as well as for a hotel stay and UPS services, among others. The free-market think tank reported one transaction at a liquor store totaling $790.

“We applaud Rep. Weaver, Sen. Tracy, Commissioner Hatter, and all those who supported this important effort to restrict the abusive use of EBT cards in our state,” said Beacon Center CEO Justin Owen.

Amelia Morrison Hipps may be reached at, on Twitter @DwnHomePolitics or at 615-442-8667.

Press Releases

Clergy for Justice Declare ‘Victory’ after Campfield Withdraws TANF Bill

Press release from Clergy for Justice; April 11, 2013:

Clergy for Justice Declares Victory “For Now” as Campfield Withdraws “Starve the Children” Bill; Comes After Author of Bill Runs from Child Who He Dismissed as a “Prop” as She Tried to Explain How Bill Hurts Kids

Thursday, April 11, 2013 – A group of almost 100 citizens, thirty ministers, a children’s choir, a mother and her daughter all came to the state capitol today to deliver over 2,500 signatures and a message to State Senator Stacy Campfield, Republican of Knoxville:

“Don’t starve the children,” said Aamiria Fetuga, the eight year old daughter of Rasheedat Fetuga.

“My daughter came home with tears in her eyes after playing with a couple of friends whose parents receive government assistance to ask me if we our power would be turned off if she didn’t pass her test this week,” said Fetuga, Director of Gideon’s Army which is a grassroots organization that advocates on behalf of children. “As a mother that was heartbreaking and then to have Sen. Campfield just dismiss her and her concerns as a ‘prop’ was just a slap in our face.”

Campfield, whose bills have recently become fodder for late night comedians nationally, condescendingly spoke to the girl and her mother saying that if her mother was “decent parent” she didn’t have anything worry about.

Link to video of Sen. Campfield, Child Encounter

“This goes against everything that people of faith believe,” said Kathy Chambers, Organizer for Clergy for Justice. “It casts judgment solely on lower income families and implies that only their children are struggling in school, thus only those families should be held accountable for their children’s academic performance.”

“Jesus calls those who follow him to feed those who are hungry (Matthew 25:35),” said Rev. Matthew Kelly of Arlington United Methodist Church. “If we as a society take food out of the mouths of those who are already struggling, when we know that children who are undernourished have greater difficulty in the classroom, then we are loudly and clearly saying “no” to the call of Jesus to care for those whom our world has identified as ‘the least of these.’”
“We acknowledge that parents play an integral role in student achievement, but they are not the sole influencer of their child’s performance,” said Taylor Hummell, Acting Nashville City Director for Stand for Children. “This bill is based on the incorrect assumption that parental involvement is the only factor that determines student outcomes.”

The event, which featured a Children’s Choir that sang “Jesus Loves the Little Children” outside the Senate chamber as Sen. Campfield’s “Starve the Children” bill was withdrawn.

Business and Economy NewsTracker Tax and Budget

Watchdog Group’s EBT Abuse Probe Appears to Spark Bipartisan Support for Reform

Gov. Bill Haslam says the state should consider tightening rules for where welfare recipients can use their taxpayer-funded benefits.

“One of the questions people always have about benefits is, are they being used in the right way? I think, obviously, that’s part of our responsibility,” Haslam told reporters on Capitol Hill Thursday.

A recent report from the investigative arm of The Beacon Center found that some people benefiting from the federal Temporary Assistance for Needy Families program were using their allowances at venues including a strip club, bar, tobacco shop, high-end clothing stores and Graceland.

The free-market think tank reviewed thousands of transactions using electronic benefit transfer, or EBT, cards, which work like debit cards. The investigation examined usage in MemphisChattanooga and Knoxville.

Unlike other programs for the needy that are restricted to food products, TANF benefits, as much as $500 per month, can be used in whatever way the beneficiary sees fit.

Haslam said he knew nothing about the reported use of EBT cards but said he would inquire as to whether there is something the state can do to restrict where funds are accessed.

Top House Democrat Craig Fitzhugh agreed that the state may need to tighten the reins on how those dollars are used, although he said the state should stick using the EBT cards because they’re safer than using paper checks.

“I don’t have any problem with tightening those regulations up so the few don’t abuse,” Fitzhugh said. “It certainly gives the whole a bad name.”

Liberty and Justice Tax and Budget Transparency and Elections

Subcommittee Passes Drug-Testing Requirement for Gov’t Aid Recipients

Tennesseans applying for welfare would have to submit to, and pay for, drug testing before receiving financial assistance, under legislation slowly advancing in both chambers of the legislature.

After a lengthy debate Tuesday night, on various aspects of the bill, that left members on both sides of the issue visibly irritated, the House Health and Human Resources Subcommittee passed HB2725, sponsored by Rep. Julia Hurley, R-Lenoir City. The Senate version of the bill, SB2580, sponsored by Knoxville Republican Stacey Campfield, passed the Senate’s health committee last week and is currently awaiting action in the Finance, Ways and Means Committee.

In an opinion rendered March 20, state Attorney General Robert Cooper said “the Social Security Act, the TennCare waiver and the federal Food Stamp program do not permit a state to condition eligibility on substance abuse testing or consent to such testing.” He also concluded that such suspicionless drug testing constituted an unconstitutional search and seizure under the Fourth Amendment.

When asked by Chairman Matthew Hill, R-Jonesborough, how that affected her legislation, Hurley said it did not. The AG was comparing “apples to oranges,” she said, grouping in her bill with legislation from other states that she didn’t consider to be the same. As a result, she said she didn’t consider it to be a “validated opinion.”

Information on similar proposals around the country are summed up here, by the United States Department of Health and Human Services.

An amendment adopted in the Senate committee narrowed the measure so that only people convicted of a drug felony or arrested on drug charges in the previous five years would be tested. Hurley initially introduced the amendment to the House committee, but appeared displeased with the change.

When pressed by members for her feelings on the matter, she said only that she “accepted” the amendment. Eventually, Hill asked Hurley directly if she wanted the committee to consider the amendment. Hurley said no and the amendment was withdrawn.

The House committee did adopt an amendment stating that laid-off workers, who took a drug test for their former employer in the previous 45 days, would not have to be tested again and providing protections for children’s assistance, in the event that their parent(s) test positive. Parents can designate a relative or other individual to handle their children’s benefits.

Rep. Joe Armstrong, D-Knoxville, raised the issue of whether or not said designated individual should be tested, as well. When Hurley offered him the chance to propose such an amendment, Armstrong said that if he were making a proposal, it would be to table the bill until next year.

General Counsel for the Department of Human Services, Bill Russell, told the committee the department didn’t have a problem with the “general concept” of the legislation, but couldn’t ignore the AG’s opinion. He also expressed concerned with forcing applicants to pay for the drug test – which he said cost around $26 in Florida when that state passed similar legislation – and the potential cost of litigation, which he said should be expected if the bill becomes law.

A federal judge last year issued a temporary injunction to stop Florida from drug-testing welfare recipients and the law is currently being contested in court.

Russell also said, if applicants test positive, there should be rehabilitation assistance available to them, to get them off drugs and back to work “since that’s the point of the program.” Hurley responded by claiming that the program would create $1 million in savings, which could be used to provide such rehab, if the department wanted to do so. When challenged on that claim by several members of the committee, Hurley repeatedly referred them to the bill’s fiscal note, inviting them to read it for themselves.

The note, provided by the Fiscal Review Committee which estimates a bill’s impact in dollars and cents, states that “the total decrease in recurring state expenditures” as a result of the new welfare eligibility requirement is estimated at $1,280,040. However, the DHS reports that the department has hit the cap for allowable administrative costs. As a result, the note says, “any cost avoidance resulting from this bill would be used to serve [Temporary Assistance for Needy Families] eligible clients, resulting in an equal increase in state expenditures, for a net impact of zero on TANF funds.”

The estimated decrease in state expenditures comes from the 2,551 welfare applicants the DHS expects to sanction as a result of failed drug tests. Paul Lefkowitz, family assistance policy director for DHS, told the committee that the department based that estimate off of a CDC study into drug use amongst welfare recipients.

The fiscal note also estimates a cost of $100,000 for litigation resulting from the program, a dollar amount some committee members found dubious, as well.

Democratic House Caucus Chairman Mike Turner said he was concerned with the amount of “unanswered questions” about the bill. He also took issue with the message he said it sends to Tennesseans who are already down on their luck.

“We kind of indicate by doing this, that everyone on food stamps is possibly a drug addict. We put a stigma to it,” he said. “We’re kind of pointing a finger at them. It had to be embarrassing enough for a lot of people to do it. It would be embarrassing for me to go on food stamps if I had to, but I would to feed my family. That’s what concerns me about this bill.”

Rep. JoAnne Favors, D-Chattanooga, put the focus on legislators – recipients of public money, themselves – and addressed Hurley directly. She asked the sponsor if she thought the bill was compassionate. When Hurley said she thought the bill was “fair,” Favors responded with a lengthy statement.

“Listen,” she said. “As a mother, a female, as a relative, most of us have had some experience, with relatives and friends, who have been substance abusers. As a compassionate individual and a mother, I would think that most of us would be concerned about interventions and preventions first, rather than initiating and enacting a bill like this. Now there are some of us who exhibit some bizarre behavior as elected officials, but nobody has requested that we undergo drug screening or the same type of psychological exam that police officers undergo.”

She went on, “But I can assure you that some of the behavior that has been exhibited by some of the elected officials in this Tennessee General Assembly do merit having some psychological exam based on my medical background.”

Favors is accurate when it comes to drug testing state legislators and other state workers, for that matter. Despite the push for drug testing of welfare recipients, supported by Lt. Gov. Ron Ramsey, and state programs rewarding business for testing workers, Tennessee state government is not a ‘drug-free workplace.’