Cuomo seeks ban on welfare cash at strip clubs

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Liquor store. (AP Photo/Erik Schelzig)
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Governor Andrew Cuomo’s latest budget proposal would prevent New Yorkers from withdrawing public-assistance funds at liquor stores, casinos and strip clubs.

Multiple states have passed similar measures in recent years, after congressional Republicans passed a bill banning E.B.T. debit card withdrawals at liquor stores and strip clubs in early 2012.

The federal government already prohibits buying alcohol, tobacco and lottery tickets with E.B.T. funds. A bill signed by President Obama in 2012 required that states comply with federal rules prohibiting using E.B.T. cards at A.T.M.s in liquor stores, adult entertainment venues and casinos.

New York State faces a Feb. 22 deadline to demonstrate to the federal government that it has taken steps to stem fraud and abuse in E.B.T. card usage, or it could risk $120 million in federal funding under the Temporary Assistance to Needy Families (TANF) program.

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Earlier this month, the New York Post reported that New Yorkers were using E.B.T. cards to make cash withdrawals at bars, liquor distributors and porn stores.

Republican senator Tom Libous has sponsored a Senate bill that seeks to curb where E.B.T. cards can be used to withdraw money, but the measure has never passed the Assembly.

In a statement, Libous praised the governor's proposal, but said it should be strengthened.

“Governor Cuomo included provisions of my Public Assistance Integrity Act in his Budget Proposal to make it illegal to use E.B.T. cards at liquor stores, strip clubs and casinos. That’s a good first step but it doesn’t go far enough,” Libous said. “More restrictions should be included, like prohibiting the purchase of alcohol and tobacco with an E.B.T. card. Wide spread abuse of E.B.T. cards has been well documented, and it’s taking away money from those who truly need it.”

A spokesperson for Assembly Speaker Sheldon Silver said his office was currently reviewing the governor's proposal. 

Cuomo's proposal would also penalize people found guilty of using their E.B.T. cards in prohibited establishments.

A first offense would render the offender ineligible to receive funds for a month, a second offense would yield two months ineligibility, a third offense would equal three months and any subsequent offenses would trigger a six-month ineligibility penalty. Any liquor store or or other vendors or establishments selling alcohol who violate the ban could see their liquor license revoked.

Gambling establishments violating the ban could have their gaming license revoked, and adult establishments would receive initial fines of $100 for a first offense, and $500 for a second offense. A third violation would count as a misdemeanor and could trigger fines as high as $1,000.