|Budget Issue:||Governor's proposed reduction|
|Program:||Economic Impact Aid (EIA)|
|Finding or Recommendation:||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.|
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.