Hmm... not sure how I feel about this. It makes me feel slightly better that if they do end up back on welfare, they don't get the AAA, repairs, insurance, etc. paid for anymore... and since the cars were donated, it's not like the state is really "out" any money. In an economy like this one, it'd be no surprise someone got laid off and had to go back on welfare.
But despite that, I don't believe owning/driving a car is a "right" but rather a priviledge, so I'm not really in favor of "giving out" cars to anyone. The state might be better off investing in or expanding the public transportation system & ride share programs (which would benefit everyone, not just welfare recipients).