Background

• On October 3, the USDA’s Food and Nutrition Service (FNS) published a proposed rule that would impose a standardized methodology for calculating the Standard Utility Allowance (SUA) for SNAP.[1] The SUA plays an important role determining a household’s total shelter expenses, which in turn, significantly impacts their SNAP benefit calculation.
• Nationally, the proposed rule would result in a $4.5 billion cut in SNAP benefits over 5 years. Seven million people in three million households – representing 19 percent of SNAP households nationwide – would experience a benefit cut. Among those experiencing a cut:
  • 68% are households with children
  • 20% are households that include an elderly individual
  • 29% are households that include an individual with a disability
• This is the third administrative rule from FNS in 2019 alone that would cut SNAP benefits. Each proposal was considered and rejected by Congress in the bi-partisan 2018 Farm Bill.

Impact on Ohio

• Ohio is one of 16 states that would be hit hard by this proposed rule, with 41 percent of SNAP households projected to experience a benefit cut.[2]
  • One point three million Ohioans in 664,000 households currently receive SNAP benefits to help feed their families.[3]
  • If the proposed rule went into effect today, 300,000 households would see their SNAP benefits reduced.
• The average benefit cut in Ohio would be $45 per month, or $540 per year. SNAP benefits are already modest, with an average monthly benefit of $126 in Ohio.

About 40 percent of all households with children in Ohio would lose benefits under the proposed rule. The average cut per SNAP household with children is about $40 a month. Half of households with elderly members would lose benefits under the proposed rule. The average cut per SNAP household with elderly people is approximately $43 a month. Sixty percent of households including people with a disability would lose benefits under the proposed rule. The average cut per SNAP household including persons with a disability would be $42.

• Ohio would lose $144 million per year in SNAP benefits
• This would result in a nearly $250 million loss in annual economic activity [4]
  • SNAP provides $168 million worth of groceries per month to Ohio, and roughly $2 billion per year
• Ohio’s Standard Utility Allowance (SUA) would be cut by 31% – a reduction of $155. [5]
  • Households with seniors and/or individuals with disabilities, as well as families with especially high shelter costs are likely to see the biggest benefit cuts, since they benefit most from SNAP’s shelter expense deduction.

Key Arguments for Organizational Comments

1. The proposed rule will reduce already inadequate SNAP benefits for food insecure Ohioans, negatively impacting their health, economic stability, and childhood academic achievement.

• Nearly 1.7 million Ohioans (14.5 percent of the population) are food insecure and 83 percent live below the federal poverty line. The average SNAP household lives on just $829 per month, with SNAP providing an additional $126 per month in nutrition assistance.[6] FNS does not appear to consider how the proposed rule would negatively impact the fundamental goal of the Food and Nutrition Act to “provide for improved levels of nutrition among low-income households.”
• Seventy-one percent of SNAP households in Ohio have documented shelter expenses averaging $778 per month. Even so, the average shelter deduction in Ohio is just $429 due to the federal cap on shelter deductions for most households. [7] Those most likely to see their SNAP benefits cut because of this proposal are households with elderly and/or disabled members, since their shelter deduction is not artificially capped. Larger working families with high utility bills are also likely to see significant benefit cuts.

2. The proposed rule would hurt Ohio’s economy, especially retail grocery stores and the jobs they provide in our communities.

• SNAP is an important source of food purchasing power for struggling families and often keeps critical grocery stores in low-income neighborhoods afloat.
• If Ohio saw this purchasing power reduced by $144 million per year, Ohio’s most vulnerable communities would likely endure widespread grocery store closures, lost jobs and new food deserts.

3. FNS does not adequately explain why the proposed change to the SUA methodology is needed.

• The proposed rule does not provide any evidence or examples of current state-led SUA methodologies being inaccurate, and the current SUA development process is already subject to FNS approval.
• If FNS believes there are inequities between state methodologies, it is within FNS’ current authority to work with states to change their approaches. (Such as states with outdated methodologies that under-estimate utility costs for low-income residents)

4. FNS does not adequately explain why a standardized SUA calculation that relies on national data would be more accurate than the current process that leverages state-specific utility cost data.

• States have access to various privately and publicly-held data sources on utility expenses incurred by low-income households.
• Basing Ohio’s SUA on national datasets, such as the America Community Survey and Residential Energy Consumption Survey – which FNS’ own research cautions may be seven or more years old – seems likely to result in an SUA that does not accurately represent the utility expense burden faced by low-income Ohioans.[8]

5. The proposed rule would arbitrarily limit state SUAs to the 80^th percentile of actual household utility costs. This means 20 percent of low-income households would have utility expenses above what would be counted in their shelter deductions, resulting in lower SNAP issuances than they are entitled to receive.

• This is a sharp departure from congressional intent and decades-long FNS policy stating that SUAs should include nearly all household utility costs (e.g. be set at the 95^th percentile) since use of the SUA is mandatory.
• The SUA was never designed to represent “average” utility costs, but rather to capture the utility expenses of nearly all SNAP households in order to simplify program administration. The legislative history and 1979 policy guidance on SUA calculations is not mentioned in the proposed rule and not available on the FNS website, making it difficult for the public to have all the necessary information to effectively comment on the proposed rule.

Action Needed

Because Ohio is one of the states most affected by the proposed rule, a strong response from state-based organizations and government agencies asking FNS to withdrawal the proposal is needed. Interested parties can submit detailed comments to FNS at https://www.regulations.gov/document?D=FNS-2019-0009-0001.

In addition to detailed comments from organizations, interested individuals can also submit comments through the Greater Cleveland Food Bank‘s advocacy platform.

The comment deadline is Monday, December 2.

[1] FNS Proposed Rule: Standardization of State Heating and Cooling Standard Utility Allowances https://www.regulations.gov/document?D=FNS-2019-0009-0001

[2] FNS Regulatory Impact Analysis – https://www.fns.usda.gov/snap/fr-100119

[3] Ohio Caseload Summary Statistics Report, August 2019 – http://jfs.ohio.gov/pams/Case-Load-Summary-Report-August-2019.stm

[4] In 2022 dollars; using USDA’s economic multiplier for SNAP of $1.73.

[5] FNS Regulatory Impact Analysis, based on FY2017 data ($508 to $353).

[6] 2017 SNAP Household Characteristics Report from FNS – https://fns-prod.azureedge.net/sites/default/files/resource-files/Characteristics2017.pdf

[7] 2017 SNAP Household Characteristics Report, Table B.4.

[8] 2017 FNS Study “Methods to Standardize State Standard Utility Allowances (Summary)” https://fns-prod.azureedge.net/sites/default/files/ops/methods-standardizes-uas-summary.pdf