States To Lose Billions, New Analysis Projects

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A report prepared for state officials projects that the states and territories would lose more than $900 million in federal funds in fiscal 1986 and more than $6 billion in fiscal 1987 as a result of the new Gramm-Rudman-Hollings deficit-reduction law.

The study, anticipating a 4.6 percent across-the-board reduction this year, estimated how much each state would lose in total U.S. aid and in each of 26 federal programs, including five accounts directly related to education—Chapter 1 compensatory education, education of the handicapped, vocational and adult education, Head Start, and the Job Training and Partnership Act.

The report was prepared in late December by Federal Funds Information for States, which is jointly sponsored by the National Governors Association and the National Conference of State Legislatures.

Because the across-the-board cut in domestic programs mandated by the law this year is 4.3 percent, the estimated reductions are slightly high, but they nevertheless provide a generally accurate projection, budget analysts said. The report projects a fiscal 1987 reduction of between 5.5 percent and 6 percent.

In the five programs that directly affect education, New York, for example, could lose more than $30 million this year and more than $150 million in fiscal 1987.

For California, the losses in these programs could total more than $40 million this year and at least $175 million in fiscal 1987; lllinois could lose about $20 million this year and about $95 million next year; and Michigan could lose almost $20 million this year and more than $80 million next year.

The report is available for $25 from F.F.I.S., 444 N. Capitol St., N.W., Suite 250, Washington, D.C. 20001.

Vol. 05, Issue 19, Page 11

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