W-2 Costs Far Less than Article States

The Journal Sentinel ran a PolitiFact column Sunday on the subject of Tommy Thompson’s statement on December 1 (while announcing his candidacy for the U.S. Senate) that while he was governor, “we ended welfare.” For what it’s worth the Journal Sentinel gave that statement a rating of “mostly true,” but that’s not what caught my attention.

The PolitiFact column states, “In October 2011, the number of people in W-2, which is budgeted to cost $626 million in state and federal funds in 2010-2011, was nearly 16,000.” The $626 million figure is actually the total budgeted in that fiscal year for W-2, child care and a variety of other programs funded from the federal block grant that replaced the old welfare program (Aid to Families with Dependent Children). The largest share, $341 million, was for child care subsidies.The actual amount budgeted in 2010-11 for W-2 benefits was $70.5 million. (This year the amount budgeted grows to $78.8 million, but it drops to just $61.8 million in 2012-13.) If you want to count administrative costs, W-2 services (such as case management), and the relatively new Transitional Jobs program, you can tack on another $77 million, bringing the total for fiscal year 2010-11 to almost $148 million. (See Table 6 in the January 2011 Fiscal Bureau Information Paper.)  There are some other amounts that one might add to the total if you use a more expansive definition of W-2, but which definitely shouldn’t be counted in a sentence referencing the 16,000 households receiving W-2 cash assistance for subsidized employment benefits.

On the whole, I think the Journal Sentinel column is a well-balanced assessment of Thompson’s statement (though I might be biased because the author of the column interviewed me at length about the definition of “welfare”). The factual error in the column had little or no bearing on the assessment of whether Thompson’s statement was accurate.  However, I’d hate for people to think that subsidized employment benefits for the 16,000 W-2 participants receiving them cost $626 million, which is roughly nine times the amount budgeted last year.

Jon Peacock