Annualized Effect Expected to be $71.9 Million Loss of Federal Benefits and $26 Million GPR Cost for State

The crowded agenda for the Joint Finance Committee meeting on Tuesday, May 21, includes the Governor’s proposal to impose a work or training requirement for many of the participants in the Food Share program. The Legislative Fiscal Bureau paper (#335) summarizing the proposal makes some important points about the effects of imposing the requirement.  Here are some of the key points from that paper:

• Adding the requirement would cost about $16.7 million in state general purpose revenue (GPR) in fiscal year 2014-15 (and more than $35.5 million in total state and federal funding).
• Because the requirement would be phased in during the second year of the biennium, the budget doesn’t reflect the full annualized cost, which the Fiscal Bureau estimates would be $9.4 million GPR per year higher in 2015-17 – adding $18.8 million to the structural deficit in that biennium.
• An estimated 31,350 people would lose their Food Share benefits, costing them (and the Wisconsin economy) $71.9 million of federally-funded benefits for food purchases.
• The bill adds 36 state government positions  to implement the requirement.
• The budget proposal assumes that the training and other services for the participants would cost $125 per participant per month.

A Journal Sentinel article by Jason Stein quotes Sherrie Tussler, executive director of the Hunger Task Force, who is very concerned that the people who are affected will become a greater burden on private charities:
“It’s dumb to turn down federal aid that feeds the unemployed, especially when we don’t have the job opportunities for (them).  Starving the unemployed doesn’t make them go away and doesn’t make our communities better places to live.”

In one important sense the proposal is similar to the Governor’s recommendation for changing BadgerCare – it increases state spending as it serves fewer people, and in the process causes a significant net drop in federal funding coming into the state.

On the other hand, there is also an interesting difference from the Governor’s health plan. In that case he turns down federal funding that would allow the state to cover more people at less state expense because he argues that the federal funding isn’t reliable. In this instance, the state is assuming that it will get more than $3 million per year (once the requirement is fully implemented) from $20 million of federal grants for all the states. That assumption seems a bit questionable on a long-term basis, since the Wisconsin Share would decline if other states qualify for grants, or if federal budget cuts extend into this area of funding.

Read more about the work and training requirement in this Journal Sentinel article by Jason Stein.

Jon Peacock