Verizon 12:09 PM @ * 98%,i.i-+ Done IMG 0263.PNG 2.(4 points) Discretionary Spen

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Verizon 12:09 PM @ * 98%,i.i-+ Done IMG 0263.PNG 2.(4 points) Discretionary Spending Baseline Analysis Suppose that the Congress is considering the crcation of a new edacation grant program aimed at addressing learning disabelity issues at the state and local level. The program would be funded through annuall discretionary appropriations, with the money transfenred to states through a population-based formula used by the Department of Education The proposal is to appropriate S650 million for fiscal year 2019 Your boss on the Senate Budgct Commiice has askod you to creale a hypothetical 10-year baseline projection for the program, covering estimated costs for fiscal years 2019 through 2028, Note: Since this is a brand-new program and 2019 will be the first year of appropriation, there ane no "outlay priors" to worry about. Also, this will NOT be an 11-year set of estimates like some of the homework assignments; it will cover exactly 10 years only, starting with 2019 and ending with 202%) There is no history to rely on since this will be a brand-new program. However, the proposed grant program seems similar to a few other education programs that you are familiar with (since you are an education budget expert so you think you can use historical spending panerns for those programs to help create the baseline projection. You have identified historical average spendout rates to use for estimating outlays from new funding for the grnts 24 percent in the firsa year, 71 percent in the second year, 4 percent in the third year, and 1 percent remaining unspent (and eventually lapsing) To inflate appropriations, assume that the baseline will reflect anticpiled inflaton of 2% per year

Explanation / Answer

Budget for new education grant progrram Budget amount for 2019 fiscal year = $650 million Year-1` 2 3 4-10 Estimate outlay 24% 71% 4% - Inflation 2% 2% 2% Total 26% 73% 6% Budget amount $650 million $1,825 $150 - (650*73/26) (650*6/26)

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