Ohio to replace food stamp system

Published 12:00 am Tuesday, October 7, 2003


(AP) - A high-tech system that Ohio chose 13 years ago to replace food stamps is on the way out.

Officials said the so-called ''smart card system'' is too expensive, costing up to four times as much as other systems.

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The smart card is a plastic card with a computer chip capable of maintaining individual account information. The state installed 11,000 machines to read the cards at groceries and other stores statewide.

Forty-eight other states use magnetic-strip cards similar to bank or credit cards that are swiped through readers already in most retail stores.

The Department of Job and Family Services will seek competitive bids to operate a new magnetic-strip system by the end of the year, said Tom Hayes, director of the Ohio Department of Job and Family Services.

The current two-year, $44 million contract with Citicorp Electronic Financial Services ends in 2005.

Hayes said switching to another system will save money, although how much won't be known until companies interested in the work submit proposals sometime next spring.

''When the original decision was made to go with a smart card in 1990, the hope was that the technology was going to take off,'' Hayes said. ''It probably will, but not in a manner that is timely for us.''

A 2002 federal analysis comparing Ohio's smart card with a magnetic system used in Maryland revealed Ohio was spending 56 percent more. The additional cost was attributed to more expensive hardware, software and the cards themselves - $4 for a smart card versus 57 cents for a magnetic-strip card.

Under the unbid Citicorp contract, Ohio pays $4.74 per household per month for the smart card. The magnetic-strip card system Citicorp administers for Indiana costs $1.26 a month and also is used to distribute cash assistance to welfare recipients.

Federal law required all states to replace paper food-stamp coupons, which were often traded on the black market, with electronic systems.