Oklahoma joined at least seven states this year in allowing drug tests to disqualify welfare recipients, but a federal law taking effect in 2014 will go a step further, trying to prevent welfare dollars from being spent in casinos, liquor stores and strip clubs.
“There are certain establishments that we are all uncomfortable with state and federal assistance being used at, and those are spelled out in this law,” said Sheree Powell, spokeswoman for the Oklahoma Department of Human Services. “Is it going to be foolproof? We don't know.”
Every month about 4,000 adults and 16,000 children in Oklahoma enroll in the Temporary Assistance for Needy Families program — the traditional federal cash welfare system that those in need can use for a maximum of five years during their entire lifetime.
The benefit, which cost roughly $24 million last year in Oklahoma, is distributed to clients through direct deposit to their checking account or through a debit card issued by a vendor of the state.
It's the use of the debit card that now will be restricted.
As part of the Middle Class Tax Relief and Job Creation Act of 2012, states must ensure that debit cards cannot be used in any electronic benefit transfer at liquor stores, casinos, gambling or gaming facilities or any strip clubs.
Failure to comply by 2014 could result in a loss of federal assistance for the welfare program which includes some state matching dollars.
Working out logistics
Powell said officials already are working out the logistics of limiting the use of those cards at certain locations and working closely with the state's debit card provider, a subsidiary of Xerox, to implement a program.
“It's difficult,” Powell said.
“This is a specific client behavior, and how do you control client behavior? It is our intent that you use this money for certain purposes, but in the end, once that person receives their cash, whether it's through their own bank account or a debit card, we have no more or less control over that cash than we did when we were issuing paper checks.”
Powell said additionally, it's more than just the cash welfare system that uses the debit cards.
In fact, about 52 percent of the clients who chose to use debit cards are parents receiving child support that the state has collected from a private individual on their behalf.
“This would affect them, as well, and that's not even state or federal money,” Powell said. “That's part of some of the barriers we've run into in the past.”
Debit cards also are used for foster care parents and benefits for adoptions.
The Los Angeles Times reported in 2010 that debit cards with welfare funds were used to withdraw $4.8 million in casinos and $12,000 in strip clubs over a three-year period.
Powell said that her understanding was that the transactions made on the cards are not public record because of federal banking regulations and are not housed at the Department of Human Services.
Sen. David Holt, R-Oklahoma City, said he'd need to study the issue further.
“Anytime you try to help people, you obviously ask of them that they embrace the help in the most positive and productive way possible, and sometimes that means putting some restrictions in place,” Holt said. “We want these programs to be successful.”
Holt was the Senate author of House Bill 2388, which goes into law in November. The law allows DHS to screen welfare recipients if there is reasonable cause to believe the applicant is using illegal drugs.
Before this law was passed, DHS had allowed known drug users to continue to receive cash welfare if they are in treatment such as rehab.
“We felt that defied common sense,” Holt said.
“We changed the law so that now people that DHS knows to be using illegal drugs will not receive cash benefits.”
Holt said they can reapply for the benefit after six months and completing rehabilitation.
Rep. Scott Inman, the Democratic minority leader in the House, said he thought the final drug screening law was a good compromise from the original bill which would have required drug screening of every welfare recipient.
“They wanted to go a lot further than what they did this year,” Inman said.
“We wanted to extend it to drug testing of legislators, but unfortunately the Senate removed that amendment.”
He said as it was written it doesn't cast too wide of a net.
“The idea is to ensure that state tax dollars are being used wisely and not being used to maintain a drug user's lifestyle,” Inman said.
He said if reports are true that welfare dollars are being used in casinos, liquor stores and strip clubs he would be very concerned.
“But you've always got the issue of enforcement,” he said.
“How do you monitor that?”