May 30, 2009

More Bad News for Welfare

BC's latest welfare "statistics" were released mid-afternoon on Friday, May 29th. The "temporary assistance - expected to work" caseload increased 52.9% between April 2008 and April 2009. The total caseload increased by 14.4%, year over year. "Expected to work - two parent families" increased by 77.1%.

Not only is the welfare caseload increasing, but the rate of increase is increasing! When the August 2008 data were released on the eve of the Vancouver by-elections, and five months before the latest budget, the data showed an increase in "temporary assistance - expected to work" of "only" 20.2% and in the total welfare caseload of "only" 5.5%. That was when Premier Campbell denied that the recession would hit BC; although he had access to information that showed BC was already in trouble.

In February 2009 the Campbell government tabled a budget which claimed that the previous year's budget would be balanced ($50 million surplus), that the 2009-2010 budget would have a deficit of $495 million and that the budget would be balanced by 2011-2012. Nonsense!

In addition to the errors in revenue projections contained in the February budget, the spending estimates by ministry showed expenditures for income assistance increasing from $1.382 billion in 2008-09 to $1.443 billion this year, an increase of 4.4%. Table A12 in the February budget documents stated:
"The expected to work caseload is sensitive to fluctuations in economic and employment trends in the service sector. A 1% change in the Temporary Assistance annual average caseload or average cost per case will affect expenditures by approximately $3.5 million annually."

That note indicated the "assumed" annual temporary assistance caseload in 2009-2010 would be 44,659, compared to 42,185 in 2008-2009 and 41,840 in 2007-2008. The actual numbers for previous years are lower than indicated in the budget footnote (table A12), but the temporary assistance caseload so far in 2009 has increased from 49,159 in January to 50,873 in April. In April the year over year increase was 28.3% for temporary assistance cases. If that were the annual average, the cost to the budget would be $99.05 million. By the end of the fiscal year, the government will be lucky if the overrun on the welfare budget is just $100 million, and that will be peanuts compared to the shortfall on the revenue estimates. More on that next week ...