Summary of LAO Findings and Recommendations on the 2011-12 Budget

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	Program	Budget Issue	LAO Finding Or Recommendation	Last Updated
Go Back	Economic Impact Aid (EIA)	Governor's proposed reduction	Reject Governor's January budget proposal to reduce EIA by $54 million because Governor incorrectly assumes the program will have participation-related savings. Participation trends suggest little, if any, budget-year savings likely to materialize.	2-08-11

Detailed Narrative
The Governor assumes a $54 million technical reduction to the Economic Impact Aid (EIA) program given the program has not spent all budgeted funds in recent years. However, the state already has made substantial downward adjustments to EIA base funding in recent years, and newly released data indicate very little of the 2010–11 appropriation will go unused. Combined with the projected growth in K–12 enrollment, this information suggests the Governor’s estimates are overly optimistic.

Detailed Narrative

The Governor assumes a $54 million technical reduction to the Economic Impact Aid (EIA) program given the program has not spent all budgeted funds in recent years. However, the state already has made substantial downward adjustments to EIA base funding in recent years, and newly released data indicate very little of the 2010–11 appropriation will go unused. Combined with the projected growth in K–12 enrollment, this information suggests the Governor’s estimates are overly optimistic.