Lawmakers suspect state bungling will trigger penalty for bad-payments rate, but governor won’t show data
Gov. Tony Evers is pressing the Legislature for $70 million to process FoodShare applications to stave off federal penalties that could cost state taxpayers as much as $225 million.
Republican leaders, frustrated in private discussions with the administration, say the Department of Health Services’ inattention to new federal work requirements for FoodShare eligibility in 2025 will almost certainly trigger the penalties, state Sen. Chris Kapenga told the Badger Institute this week.
Much of the funding that Evers wants would be used to expand the Department of Health Services by as many as 60 employees to vet an estimated 43,000 food program recipients who are subject to the new work requirements that went into effect in July, Kapenga, R-Delafield, said.
If those recipients don’t work or provide proof of trying to find work, they will be ineligible for benefits.
Evers so far has provided legislative leaders with no hard data to justify the new spending or an explanation for why he believes the Department of Health Services cannot keep its error rate below 6 percent, a standard that would prevent the state from being fined for the first time ever.
Wisconsin’s 4.47 percent error rate — the percentage of payments deemed illegal or to ineligible beneficiaries — is the third lowest in the country and has been well below the penalty threshold since 2019, according to Brookings Institution data.
“The governor wants the Legislature to bail him out,” Kapenga said. “I don’t think DHS is going to get anywhere close to that six percent error rate, and he’s scared (it’s going to be higher than 6 percent). We have asked him to show us the data and he hasn’t. But that’s the way he has always operated.”
The Badger Institute emailed Evers’ Department of Administration and the Department of Health Services for an explanation of funding and staffing increases but did not receive a reply.
In addition to the expansion of an agency that already employs nearly 6,800 people, the Legislature is also being asked in the next budget session to find an estimated $42 million to cover a 25 percentage point increase in the state’s share of the administrative costs to run FoodShare.
Currently, all FoodShare benefits are federally funded. Starting Oct. 1, 2026, Wisconsin taxpayers will be expected to fund an increase in the share of administrative costs to run the program from 50 percent to 75 percent, or an estimated $121 million, compared to $79 million in 2024. The remainder is covered by the federal government.
That’s in addition to any higher share of administrative costs that would fall on Wisconsin if its error rate is over the threshold. Being over the six percent limit could cost the state $80 million a year. Over 10 percent could cost $225 million, according to calculations based on current DHS benefits costs.
Both the federal food program penalties and the administrative cost shifting are attempts to curb federal spending on the Supplemental Nutrition Assistance Program (SNAP), the program that is called FoodShare in Wisconsin. The changes were included in the One Big Beautiful Bill passed in July.
Federal taxpayers spent $100.3 billion on SNAP benefits and administration last year. SNAP cost a record $132.4 billion in 2021 during the teeth of the pandemic before receding to $119.5 billion in 2022 and $115 billion in 2023, according to U.S. Department of Agriculture figures.
As the Badger Institute reported in October, an estimated 2.4 million SNAP beneficiaries a month nationwide would likely drop off the rolls because of an increase in the age to which recipients must work at least 80 hours a month to remain eligible. The age is increasing from 54 to 64.
According to DHS data, the number of people in Wisconsin receiving FoodShare supplements reached a monthly high of 700,256 in March, but has steadily dropped to 664,986 in October.
In October, several local news outlets reported that officials for Feeding Wisconsin, a statewide food bank network, said the DHS needed $70 million and wanted to hire 56 new employees to make sure work requirements are being met and the error rate remains below 6 percent.
A few days later, when pressed on those numbers by Fox11 News in Green Bay, the DHS said “the Department of Health Services will need up to $11.4 million per year starting this state fiscal year to hire additional FoodShare quality control staff to review cases before they are confirmed to identify and address errors.”
Kapenga said $70 million for the error rate work alone is what has been on the table. “You have an agency with more than 6,000 employees. You’d think there are enough people to handle this,” Kapenga said. “I think this is the governor trying to get more employees for an agency.”
State Sen. Rachael Cabral-Guevara, chair of the Senate Committee on Health, and state Rep. Clint Moses, chair of the Assembly Committee on Health, Aging and Long-Term Care, the committees overseeing FoodShare, expressed disappointment that the state is facing penalties for food program management.
There is language in a pending FoodShare bill co-authored by Cabral-Guevara, R-Fox Crossing, that would “make sure our error rate for FoodShare is responsibly kept under the federal threshold.”
“I am disappointed,” Moses, R-Menomonie, said, “I was not brought into any of the discussions regarding changes that would add more bureaucrats to our state.”
The calculation of error rates in 2025 and 2026 are important because they will determine what penalty, if any, the state will have to pay beginning in 2027, according to the new law.
If states don’t improve their error rates dramatically in the coming year, there could be a $10 billion shift from a federal to a state tax burden to support SNAP.
Based on 2024 USDA data, 42 of 50 states would have to begin paying at least 5 percent of the cost of SNAP benefits for being over the 6 percent error rate in addition to the higher percentage of administrative costs. However, 19 of those states would have to pay 15 percent of the benefits costs for error rates of over 10 percent. The average error rate in the U.S. in 2024 was nearly 11 percent, according to the USDA.
Mark Lisheron is the Managing Editor of the Badger Institute.
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