Saturday, May 17, 2003

State to stay with cards for food

The Associated Press

COLUMBUS - The "smart card" system Ohio uses to issue food stamps is the most expensive in the country, but the state apparently is stuck with it for now.

With no other plan in the works, Gov. Bob Taft's administration has asked the State Controlling Board to approve an unbid $44 million contract to continue use of the system for two more years.

The board meets Monday. The current contract expires June 30.

Only one other state, Wyoming, uses the "smart card," a plastic card with a computer chip that needs a special reader in the checkout line, The Columbus Dispatch reported Friday. The other states use cards with a magnetic stripe that work in stores' existing card readers.

Under the new contract, Citicorp Electronic Financial Services would get $22 million next year to run the program compared with $17 million the company is slated to receive by the end of the current budget year, June 30. The state's cost per household would increase about 25 percent, to $4.74 a month.

Jon Allen, a spokesman for the Ohio Department of Job and Family Services, attributed the $5 million increase to projections that show the number of food stamp recipients continuing to climb.

"There's no reason to believe the food stamp caseload is going to decrease," Allen said Friday.

When the contract ends June 30, Citicorp will have been paid $78 million over seven years.

Faced with a multibillion-dollar budget deficit, some Ohio lawmakers are questioning the expense of sticking with smart cards. But Taft administration officials say they aren't considering conversion.

Tom Hayes, director of Job and Family Services, defends the expense, saying that the smart card is more secure and reliable than the magnetic-stripe card.

Ohio will gain an advantage by waiting two years, he said, giving the private sector time to drive down the cost.

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