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Inflated pricing found in food-voucher program investigation

April 23, 2012 12:00:00 AM PDT
Imagine paying nearly $10 for a box of cereal. According to an investigation, that's what some stores in California are charging as part of a food-voucher program paid for by taxpayer dollars.

The federally financed, state-administered program called Women, Infants, and Children (WIC) helps nearly 1.5 million low-income families in California buy nutritious food. They receive monthly vouchers for a specific list of items and the store fills out the amount for government reimbursement.

But in expanding the number of local independent stores that accept WIC vouchers, an investigation by The Bay Citizen found some are charging abnormally high prices. It published pictures featuring nearly $10 for a box of Cheerios and $7.50 for a loaf of bread, all paid for by taxpayers.

State Senator Mark DeSaulnier (D-Concord) heads the Budget Subcommittee on Health and Humans Services.

"It's gouging," said DeSaulnier. "It's gouging people who really can't afford it, which is all of us."

Advocates for the poor says the program has limited funds, and that the money should be going to feed hungry children, not line the pockets of store owners.

"When you have a bad actor out there taking more money than they should and charging more money than they should for a box of cereal, you're taking money out of the mouths of babes," said Jessica Bartholow, Western Center on Law and Poverty.

One store owner who asked not to be identified said they have to charge higher prices because WIC mandates that they carry a certain number of each food item, even the ones that don't really sell, like soy or Lactaid milk. He ends up throwing them away and loses money. He makes it up by raising the prices of other WIC products.

The state is now cracking down on smaller WIC stores by reducing reimbursement rates and implementing stronger price controls that'll be in place by mid-May.

"These stores were widely expanded over the last five or six years to give access, and we have now recognized that the charges in these stores are unacceptably high," said Diana Dooley, Calif. Health and Human Services secretary.

The state also has a moratorium on giving out any more licenses to small stores that apply to become a WIC store. The Western Center on Law and Poverty also wants to see criminal charges filed.


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