Attempts by the new Republican administration to largely privatize the state's food assistance program have been all but stopped in their tracks.
The controversial plan, first proposed by Gov. Scott Walker in March, would have replaced county-level sites where residents can simultaneously apply for FoodShare and medical assistance with a limited number of centers across the state staffed by private workers. The move would have cost roughly 270 public workers their jobs.
Walker's attempt to expand on a practice first started under former Democratic Gov. Jim Doyle proved too much for officials with the U.S. Department of Agriculture, the federal agency that funds and oversees the FoodShare program.
Turns out, USDA officials were never keen on private workers being involved in the administration of the federally funded food assistance program. The federal officials have been warning the state to change its course, or at a minimum refrain from hiring more private employees, since early 2010.
The Doyle administration never did. Faced with losing millions, now Walker is.
"The state right now is not in compliance (with federal law)," said Alan Shannon, a spokesman with the USDA's regional office in Chicago. "It's that simple."
Federal guidelines prohibit private, or vendor, staff from deciding an applicant's eligibility for food assistance. Under the guidelines, private workers can only perform non-discretionary tasks, such as scanning documents.
On Thursday, Ollice Holden, the Midwest administrator for the USDA's Food and Nutrition Service in Chicago, sent a letter to Dennis Smith, secretary of the state Department of Health Services, telling him to correct the situation.
The letter says the state must move more quickly than it had proposed earlier this summer in making the switch from private to public employees.
Specifically, to eliminate the risk of losing millions in federal money, the Walker administration earlier this summer had told Holden it would cut the number of private employees, most of whom work at the Enrollment Services Center in Madison, by 20 percent by Dec. 1.
Holden says in the letter that the state must make double the cuts, reducing the number of private workers by 40 percent by Dec. 1.
To put the threat of losing federal funds into perspective, the state received $42 million from the USDA to administer the FoodShare program in 2010, according to Shannon and the state Department of Health Services. That's in addition to the roughly $1 billion the federal government spent to help 800,000 state residents purchase food through the program.
By March, the state will need to have eliminated a total of 319 of its 425 private employees, which will leave 106 private employees, a number Holden says is acceptable.
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Instead of 270 public workers losing their jobs through Walker's consolidation program, 319 private workers now will be out of work by March.
Shannon says the remaining 106 private employees will continue to work at the ESC.
"They (the federal government) feel vendor staff can only be used for certain functions," says Stephanie Smiley, a spokeswoman with the state Department of Health Services. "And they felt our use of vendor staff was being used for other purposes."
The Enrollment Services Center, run by Hewlett Packard, was created in 2009 after Doyle introduced the BadgerCare Plus Core program that provides health insurance to childless adults earning less than $21,000 annually. The program's unexpected popularity prompted Doyle to turn to the private sector to operate the application process rather than adding to the workload of county workers.
Because many states, including Wisconsin, screen applicants for food and medical assistance at the same time, private workers consequently became involved in screening FoodShare applicants as a result of Doyle's decision.
Currently, the ESC oversees 99,000 food assistance cases. Of that number, only 34,000 are connected to a BadgerCare case, which means that although the center was set up to determine eligibility for a BadgerCare program, it now largely administers food assistance using private employees.
Amy Mendel-Clemens, Dane County's economic assistance and work services director, says the plan laid out by the USDA stipulates that cases be transferred from the ESC to the county level beginning Oct. 1 rather than Jan. 1.
Dane County employees now will be in charge of an additional 9,000 to 10,000 cases.
"It is a significant number of (new) cases, and it will have an impact on our workload," Mendel-Clemens says. "But we still think the change will be better for our customers."
Many, including Dane County Executive Joe Parisi, officials with the Hunger Task Force of Milwaukee, the Wisconsin Council on Children and Families, and Disability Rights Wisconsin, had criticized the ongoing effort to scale back county centers and replace public workers with private ones.
The USDA routinely points to problems in Indiana and Texas as examples of how customer service and the speed of processing applications suffer when the private sector is in charge of an entitlement program.
Maureen Fitzgerald, the FoodShare project director for the Hunger Task Force of Milwaukee, says the transition away from private workers is a positive for FoodShare clients across the state.
She cites a recent example of poor customer service in which a FoodShare recipient came to them after receiving a letter with a number to dial for assistance. Rather than connecting the person to the Enrollment Services Center, the number connected them to DirecTV, a satellite cable service.