SOUTHERN EBT PROGRAM TO SWITCH ON IN SPRING

DON YAEGER

OSAGE BEACH, Mo. (FNS) -- The Southern Alliance of States' electronic benefits transfer program, stalled by litigation this summer, is moving forward again and plans on a spring 1997 pilot launch in three of the eight states.

Alabama, Arkansas and Missouri are expected to begin issuing in March plastic cards in place of paper food stamps, said Melba Price, associate director for policy coordination at the Missouri Department of Social Services.

Price, who also chairs the Southern Alliance, provided updates of EBT developments during the Missouri Grocers Association convention and exposition here this month.

The three-state launch was initially set for Nov. 1, she noted, but was postponed due to lawsuits filed by service providers bidding on the project. However, on Sept. 30 Congress authorized the alliance to move forward with the program.

Price told SN that Georgia recently signed a contract with service providers and will likely issue cards in April or May. The four other states in the alliance -- Kentucky, North Carolina, Florida and Tennessee -- are expected to sign contracts soon.

Although all eight states have agreed upon Citibank, New York, as the primary contractor and Deluxe Data Systems and Lockheed-Martin as subcontractors, each state must execute its own agreement.

The Southern Alliance's program, which could serve as a model for how electronic benefits transfer could work on a nationwide basis, uses magnetic stripe cards to distribute government benefits electronically.

While many other EBT programs cover only food stamps, the SAS program provides for electronic disbursement of Social Security, Railroad Retirement, Supplemental Security Income and veterans benefits.

Retailers will be able to choose if they want to dispense cash, Price said, and if they do, will receive a fee of 30 cents per transaction.

Price told Missouri retailers that their state would launch its EBT pilot in St. Louis, Kansas City and eight rural counties this spring. She cautioned retailers to exercise caution when making investments in EBT systems because the market is heating up.

"There are five to 10 companies in cutthroat competition for your business. You are in the driver's seat," she said.