ALBANY, N.Y. (AP) - New York is moving to prohibit the use of cash welfare benefits to pay for cigarettes, beer and liquor, state lottery tickets, casino games, strip clubs and illegal drugs.
The bill that died in the Democrat-led Assembly a year ago has a new motivation: If New York doesn't act to restrict the use of welfare cash to groceries and other necessities, the federal government will penalize the state by cutting $120 million in aid.
"None of us wants to restrict anybody who uses public assistance," said Sen. Thomas Libous, a Southern Tier Republican. "We fully understand there are people in this state who need help.
"What this bill does is help those people because we are going to go after those individuals who defraud the system," Libous said Tuesday.
He said retail store receipts show social services debit cards have been used to directly pay for cigarettes, liquor, lottery tickets and gambling while police reports have shown cash has been withdrawn to be used in drug deals. Republicans speculate the abuse could be widespread, pointing to nearly $4 million a month in cash welfare withdrawals made from automatic teller machines between midnight and 6 a.m. when they say it's unlikely recipients are using the cash for groceries or other necessities for which benefit is intended.
"It is shocking that the current system allows cash to be used without any oversight," said Warren County Sheriff Bud York. "We know from our cases that there is widespread abuse, including buying illegal drugs, booze and cigarettes."
In February, the Obama administration required states to create policies to prevent the use of Electronic Benefit Transfers from inside liquor stores, casinos, and any "adult-oriented entertainment" facilities, or face a 5-percent cut in next year's federal funds, according to the National Conference of State Legislatures. The NCSL doesn't yet have a list of states' compliance.
The Assembly's Democratic majority is looking to restrict the use of cash by regulation through the Office of Temporary Disability Assistance. If that doesn't work, the Assembly will look at legislation, said Michael Whyland, spokesman for Assembly Speaker Sheldon Silver.
The office said it doesn't comment on pending legislation.
Libous said the Senate is working with banks to develop technology that would block the purchases of non-essentials when a social services debit card is used at the point of sale. Monitoring cash withdrawals from ATMs will be tougher.
"Nothing is fool proof," Libous said. "If you want to defraud any system you can do it. Right now, there are no rules. This is a major step ... it makes it illegal."
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