This is the accessible text file for GAO report number GAO-03-336 entitled 'Labor Market Information: Trends and Issues in Funding of State Programs' which was released on December 20, 2002. This text file was formatted by the U.S. General Accounting Office (GAO) to be accessible to users with visual impairments, as part of a longer term project to improve GAO products’ accessibility. Every attempt has been made to maintain the structural and data integrity of the original printed product. Accessibility features, such as text descriptions of tables, consecutively numbered footnotes placed at the end of the file, and the text of agency comment letters, are provided but may not exactly duplicate the presentation or format of the printed version. The portable document format (PDF) file is an exact electronic replica of the printed version. We welcome your feedback. Please E-mail your comments regarding the contents or accessibility features of this document to Webmaster@gao.gov. Report to Congressional Requesters: United States General Accounting Office: GAO: December 2002: Labor Market Information: Trends and Issues in Funding of State Programs: GAO-03-336: Contents: Letter: Appendix I: Briefing Slides: Appendix II: Programs That Use LMI Data in Decisions about the Distribution of Federal Funds or Other Benefits: Appendix III: Change in States’ Allocations: Appendix IV: States Ranked by Size: Abbreviations: BLS: Bureau of Labor Statistics: CES: Current Employment Statistics: LAUS: Local Area Unemployment Statistics: LMI: Labor Market Information: December 20, 2002: The Honorable Edward M. Kennedy Chairman The Honorable Judd Gregg Ranking Minority Member Committee on Health, Education, Labor and Pensions United States Senate: The Honorable Michael B. Enzi Ranking Minority Member Subcommittee on Employment, Safety and Training Committee on Health, Education, Labor and Pensions United States Senate: The Honorable Daniel K. Inouye United States Senate: Labor market information is used to help make and assess social and monetary policies, tax and budget projections, and private investment decisions. Produced under cooperative agreements between states and the Bureau of Labor Statistics (BLS), labor market information helps provide an up-to-date picture of the U.S. economy and generate closely watched economic indicators, such as unemployment rates and the Gross Domestic Product. In addition, decisions about the distribution of billions of federal dollars to states and local governments depends, in part, on labor market information. BLS defines the work that state Labor Market Information (LMI) programs must perform and the amount of money they will receive for that work-- about $80 million in fiscal year 2002.[Footnote 1] You asked us to look at issues regarding BLS’s funding of state LMI programs because of your interest in the quality of data used to distribute federal funds under the Workforce Investment Act of 1998. Our objectives were to (1) describe changes over time in federal funding to states for LMI programs, (2) describe how BLS estimates LMI budget needs for states and allocates appropriated funds to the states, and (3) identify issues regarding federal funding of state LMI programs. Of the five LMI programs, we focused our work on the two that receive the most funds from BLS--the Covered Employment and Wages (referred to as the ES-202 program) and the Current Employment Statistics (CES) programs. Both the ES-202 and CES programs produce data on employment, such as numbers of employees and average wages by industry, but with key differences. The ES-202 program produces data quarterly based on its file on about 8 million business establishments, covering most employment in the United States.[Footnote 2] The CES program produces more timely data (monthly) based on a survey of about 350,000 business establishments. The ES-202 and CES programs are linked because the CES survey sample is selected from the ES-202 file and the CES estimates are adjusted (“benchmarked”) by the ES-202 data. Data from these programs greatly affect the distribution of billions of federal dollars to states and local entities. For example, data from both the ES-202 and CES programs are used by another LMI program--the Local Area Unemployment Statistics (LAUS) program--to generate estimates used by various federal programs, including some under the Workforce Investment Act of 1998, to make decisions about the distribution of federal funds.[Footnote 3] Also, ES-202 data, such as those on average wages, are used directly by other federal programs to make decisions about the distribution of federal funds. (See appendix II for a list of federal programs that use LMI data directly in decisions about the distribution of federal funds.) Further, ES-202 data are a significant factor in the calculation of state per capita personal income, which is used in the distribution of federal funds under programs such as Medicaid and Foster Care.[Footnote 4] To describe changes over time in federal funding to states for LMI programs, we obtained and analyzed data from BLS’s budget office on base program funding provided to states for the ES-202 and CES programs from fiscal year 1996 through fiscal year 2002. To describe how BLS estimates LMI budget needs for states and allocates appropriated funds to states, we interviewed BLS budget officials and reviewed documents on the allocation formulas. To identify issues regarding federal funding of state LMI programs, we interviewed officials from the LMI offices in six states--California, Florida, Minnesota, Montana, New York, and Wyoming. We selected these states because they represent a range in the number of business establishments in each state and a range of outcomes from a recent change in state allocations. We also met with BLS officials to obtain their views on the funding of state LMI programs. We did not independently assess the validity of states’ or BLS’s views about the adequacy of BLS funding of state LMI programs because of a lack of clear and objective criteria for determining whether current funding levels are adequate to produce quality data and for determining the extent of any over-or under-funding. Instead, we developed descriptions of conditions relevant to states’ and BLS’s views by using data from BLS on funding and workload and data from the six surveyed states on cost increases. We conducted our work from June through November 2002 in accordance with generally accepted government auditing standards. We provided briefings on the results of our work to staff of the Subcommittee on Employment, Safety and Training of the Senate Committee on Health, Education, Labor and Pensions on October 24, 2002, and to staff of Senator Inouye on November 22, 2002. This report formally conveys the information provided during those briefings plus additional information you requested. In summary, we found that (1) funding for the ES-202 and CES programs declined in real terms over the past seven years; (2) BLS estimates the funding needs of states by adjusting prior year funding and uses formulas to allocate funds to states; and (3) workload and cost increases outpaced funding increases in the ES-202 program, which could result in data quality problems, according to state LMI officials. Our review of changes over time in federal funding to states for LMI programs found that from fiscal year 1996 through fiscal year 2002, the ES-202 program’s base funding for states, when adjusted for cost- inflation, declined 5 percent. In addition, the CES program’s base funding for the same period declined 17 percent. BLS estimates LMI budget needs for states by making adjustments to the past year’s funding and allocates appropriated funds to states by using allocation formulas. Specifically, in estimating the amount of funding needed for state LMI offices, BLS starts with the past year’s funding and adds an adjustment for cost inflation. In addition, for the ES-202 program that has a continuously growing workload, BLS adds an amount for expected workload increases. However, BLS’s requests for funding increases to cover growing costs and workloads are not always approved. In developing its budget estimates, BLS does not collect information from state LMI offices to determine what those offices’ costs or budget needs are because BLS cannot readily verify such information, according to BLS officials. After BLS’s budget is approved and BLS receives its appropriation from Congress, BLS distributes funds among the states using a different allocation formula for each of the five LMI programs. BLS recently changed the source of salary data it factors into these formulas because the previously used data were not readily verifiable and BLS wanted to make the allocation process more objective and open.[Footnote 5] This change will result in funding increases over time for some, mostly larger states.[Footnote 6] Funding for other states, mostly smaller, that would have decreased, will remain flat under a hold-harmless approach.[Footnote 7] Although the change in the allocation formulas has raised concerns among some small states, the broader issue regarding BLS’s funding of state LMI programs is whether the overall amount of funds available for allocation to states is sufficient to produce high quality data. All six states we spoke with and BLS agreed that funding provided to states has not kept pace with the continuously growing workload in the labor- intensive ES-202 program. In addition, states said that funding has not kept up with increases in costs in the ES-202 program, such as increases resulting from pay raises for state LMI office staff.[Footnote 8] A comparison of changes in the nationwide base funding for the ES-202 program with changes in indicators for workload and costs, for the period from fiscal year 1996 to fiscal year 2002, reveals that funding increases have been outpaced by the combined increase in workload and costs. Specifically, while funding (not inflation adjusted) increased 13 percent, the total number of business establishments with ES-202 program records--a key indicator of workload--increased about 11 percent and average state salaries and benefits--an indicator of a key cost component--increased about 19 percent. Five of the six states we spoke with believe that the quality of their ES-202 data will suffer in the future under current funding trends.[Footnote 9] In contrast to the ES-202 program, there is no simple indicator of workload trends for the CES program, and states differed in their views about the adequacy of CES funding.[Footnote 10] Three of the six states believe that CES funding is generally adequate given their current workloads under the CES program, while the other three believe their funding is inadequate. BLS program officials say that states are delivering their CES products on time and in compliance with the requirements of the cooperative agreement and, thus, are adequately funded for the work they must perform under the CES program. We provided a draft of this report to the Department of Labor and BLS for review and made changes based on their technical comments as appropriate. We are sending copies of the report to relevant congressional committees; the Secretary, Department of Labor; the Commissioner, Bureau of Labor Statistics; the Director, Office of Management and Budget; and other interested parties. We will make copies available to others upon request. The report is also available at no charge on GAO’s Web site at www.gao.gov. If you and your staff have any questions about this report, please contact Sigurd Nilsen or Andrew Sherrill at (202) 512-7215. Kathy Peyman, Cathy Pardee, and Pat Elston also made key contributions to this report. [End of section] Signed by Sigurd R. Nilsen: Sigurd R. Nilsen, Director Education, Workforce, and Income Security Issues: [End of section] Appendix I: Briefing Slides: [See PDF for image] [End of Figure] [End of section] Appendix II: Programs That Use LMI Data in Decisions about the Distribution of Federal Funds or Other Benefits: Table 1: Programs That Use Data from the Local Area Unemployment Statistics (LAUS) Program: [See PDF for image] Source: BLS’s LAUS program, the federal agencies listed, and the Catalog of Federal Domestic Assistance. [A] Programs listed are those identified by BLS that use LAUS data to allocate shares of federal funds or achieve other purposes, such as qualifying applicants, establishing eligibility of individuals or geographic areas, or setting thresholds or federal match rates. [B] Unless otherwise noted, dollars shown are amounts available for the program from fiscal year 2002 appropriations. The full amount shown is not necessarily subject to distribution based on LAUS data. [C] Dollars shown are an estimate provided by a Food and Nutrition Service official of the portion of the $21.9 billion in appropriations for the Food Stamp program that could be affected by the LAUS data. [D] Dollars shown are estimated obligations. [E] Dollars shown were available for the period fiscal year 1997 through fiscal year 2002. [F] LAUS data do not directly affect the amount of funds that states receive from the $16.7 billion in appropriations for the Temporary Assistance for Needy Families (TANF) program. However, unemployment data affect how long states can count job search as a work activity for TANF recipients when determining whether the states meet federal work participation rate requirements. [G] Program distributes visas to eligible immigrant entrepreneurs who establish or sustain an investment of $1 million in a commercial enterprise within the U.S. For those who invest in targeted employment areas with high rates of unemployment, the investment threshold is $0.5 million. [End of Figure] [End of table] Table 2: Examples of Programs That Use Data from the Covered Employment and Wages (ES-202) Program: [See PDF for image] Source: BLS’s ES-202 program, the federal agencies listed, and the Catalog of Federal Domestic Assistance. [A] Table includes significant examples of the numerous programs that use ES-202 data directly to allocate shares of federal funds or for other purposes, such as establishing eligibility for federal funds. The table does not include programs that use ES-202 data indirectly, such as Medicaid and Foster Care, that have funding formulas that include state per capita personal income, which is based in part on ES-202 data. [B] Unless otherwise noted, dollars shown are amounts available for the program from fiscal year 2002 appropriations. The full amount shown is not necessarily subject to distribution based on ES-202 data. [C] Dollars shown are estimated obligations. [End of table] [End of section] Appendix III: Change in States’ Allocations: Table 3: Change in States’ ES202 and CES Base Program Allocations from Fiscal Year 2001 to Fiscal Year 2002 if Formula Change Were Implemented Without Hold-Harmless. State: Alabama; Actual fiscal year 2001 allocation dollars: $651,442; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: $805,652; If hold-harmless not applied: Change in allocation: $154,210; If hold-harmless not applied: Change in allocation: 24. State: Alaska; Actual fiscal year 2001 allocation dollars: 445,721; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 339,296; If hold-harmless not applied: Change in allocation: -106,425; If hold-harmless not applied: Change in allocation: -24. State: Arizona; Actual fiscal year 2001 allocation dollars: 682,469; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 620,753; If hold-harmless not applied: Change in allocation: -61,716; If hold-harmless not applied: Change in allocation: -9. State: Arkansas; Actual fiscal year 2001 allocation dollars: 533,447; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 542,147; If hold-harmless not applied: Change in allocation: 8,700; If hold-harmless not applied: Change in allocation: 2. State: California; Actual fiscal year 2001 allocation dollars: 5,104,176; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 5,696,468; If hold-harmless not applied: Change in allocation: 592,292; If hold-harmless not applied: Change in allocation: 12. State: Colorado; Actual fiscal year 2001 allocation dollars: 996,109; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 886,112; If hold-harmless not applied: Change in allocation: -109,997; If hold-harmless not applied: Change in allocation: -11. State: Connecticut; Actual fiscal year 2001 allocation dollars: 1,007,596; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 1,007,722; If hold-harmless not applied: Change in allocation: 126; If hold-harmless not applied: Change in allocation: 0. State: Delaware; Actual fiscal year 2001 allocation dollars: 413,981; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 371,495; If hold-harmless not applied: Change in allocation: -42,486; If hold-harmless not applied: Change in allocation: -10. State: District of Columbia; Actual fiscal year 2001 allocation dollars: 458,445; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 430,069; If hold-harmless not applied: Change in allocation: -28,376; If hold-harmless not applied: Change in allocation: -6. State: Florida; Actual fiscal year 2001 allocation dollars: 2,023,622; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 1,851,538; If hold-harmless not applied: Change in allocation: -172,084; If hold-harmless not applied: Change in allocation: -9. State: Georgia; Actual fiscal year 2001 allocation dollars: 1,125,664; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 1,167,146; If hold-harmless not applied: Change in allocation: 41,482; If hold-harmless not applied: Change in allocation: 4. State: Hawaii; Actual fiscal year 2001 allocation dollars: 387,485; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 357,628; If hold-harmless not applied: Change in allocation: -29,857; If hold-harmless not applied: Change in allocation: -8. State: Idaho; Actual fiscal year 2001 allocation dollars: 440,896; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 368,827; If hold-harmless not applied: Change in allocation: -72,069; If hold-harmless not applied: Change in allocation: -16. State: Illinois; Actual fiscal year 2001 allocation dollars: 1,955,505; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 1,964,536; If hold-harmless not applied: Change in allocation: 9,031; If hold-harmless not applied: Change in allocation: 0. State: Indiana; Actual fiscal year 2001 allocation dollars: 936,385; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 1,057,557; If hold-harmless not applied: Change in allocation: 121,172; If hold-harmless not applied: Change in allocation: 13. State: Iowa; Actual fiscal year 2001 allocation dollars: 605,320; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 858,101; If hold-harmless not applied: Change in allocation: 252,781; If hold-harmless not applied: Change in allocation: 42. State: Kansas; Actual fiscal year 2001 allocation dollars: 600,500; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 579,899; If hold-harmless not applied: Change in allocation: -20,601; If hold-harmless not applied: Change in allocation: -3. State: Kentucky; Actual fiscal year 2001 allocation dollars: 526,316; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 687,175; If hold-harmless not applied: Change in allocation: 160,859; If hold-harmless not applied: Change in allocation: 31. State: Louisiana; Actual fiscal year 2001 allocation dollars: 936,220; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 749,823; If hold-harmless not applied: Change in allocation: -186,397; If hold-harmless not applied: Change in allocation: -20. State: Maine; Actual fiscal year 2001 allocation dollars: 465,699; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 383,300; If hold-harmless not applied: Change in allocation: -82,399; If hold-harmless not applied: Change in allocation: -18. State: Maryland; Actual fiscal year 2001 allocation dollars: 702,998; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 880,340; If hold-harmless not applied: Change in allocation: 177,342; If hold-harmless not applied: Change in allocation: 25. State: Massachusetts; Actual fiscal year 2001 allocation dollars: 1,407,056; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 1,608,121; If hold-harmless not applied: Change in allocation: 201,065; If hold-harmless not applied: Change in allocation: 14. State: Michigan; Actual fiscal year 2001 allocation dollars: 1,849,127; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 1,722,081; If hold-harmless not applied: Change in allocation: -127,046; If hold-harmless not applied: Change in allocation: -7. State: Minnesota; Actual fiscal year 2001 allocation dollars: 1,067,680; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 1,106,007; If hold-harmless not applied: Change in allocation: 38,327; If hold-harmless not applied: Change in allocation: 4. State: Mississippi; Actual fiscal year 2001 allocation dollars: 468,317; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 412,343; If hold-harmless not applied: Change in allocation: -55,974; If hold-harmless not applied: Change in allocation: -12. State: Missouri; Actual fiscal year 2001 allocation dollars: 765,600; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 899,487; If hold-harmless not applied: Change in allocation: 133,887; If hold-harmless not applied: Change in allocation: 17. State: Montana; Actual fiscal year 2001 allocation dollars: 429,537; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 302,580; If hold-harmless not applied: Change in allocation: -126,957; If hold-harmless not applied: Change in allocation: -30. State: Nebraska; Actual fiscal year 2001 allocation dollars: 512,838; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 455,117; If hold-harmless not applied: Change in allocation: -57,721; If hold-harmless not applied: Change in allocation: -11. State: Nevada; Actual fiscal year 2001 allocation dollars: 480,369; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 471,458; If hold-harmless not applied: Change in allocation: -8,911; If hold-harmless not applied: Change in allocation: -2. State: New Hampshire; Actual fiscal year 2001 allocation dollars: 430,394; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 403,759; If hold-harmless not applied: Change in allocation: -26,635; If hold-harmless not applied: Change in allocation: -6. State: New Jersey; Actual fiscal year 2001 allocation dollars: 1,414,929; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 1,938,089; If hold-harmless not applied: Change in allocation: 523,160; If hold-harmless not applied: Change in allocation: 37. State: New Mexico; Actual fiscal year 2001 allocation dollars: 654,155; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 419,001; If hold-harmless not applied: Change in allocation: -235,154; If hold-harmless not applied: Change in allocation: -36. State: New York; Actual fiscal year 2001 allocation dollars: 3,086,205; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 3,374,734; If hold-harmless not applied: Change in allocation: 288,529; If hold-harmless not applied: Change in allocation: 9. State: North Carolina; Actual fiscal year 2001 allocation dollars: 1,173,253; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 1,195,728; If hold-harmless not applied: Change in allocation: 22,475; If hold-harmless not applied: Change in allocation: 2. State: North Dakota; Actual fiscal year 2001 allocation dollars: 385,447; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 293,770; If hold-harmless not applied: Change in allocation: -91,677; If hold-harmless not applied: Change in allocation: -24. State: Ohio; Actual fiscal year 2001 allocation dollars: 1,676,778; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 2,035,305; If hold-harmless not applied: Change in allocation: 358,527; If hold-harmless not applied: Change in allocation: 21. State: Oklahoma; Actual fiscal year 2001 allocation dollars: 752,529; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 504,815; If hold-harmless not applied: Change in allocation: -247,714; If hold-harmless not applied: Change in allocation: -33. State: Oregon; Actual fiscal year 2001 allocation dollars: 792,278; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 760,165; If hold-harmless not applied: Change in allocation: -32,113; If hold-harmless not applied: Change in allocation: -4. State: Pennsylvania; Actual fiscal year 2001 allocation dollars: 1,894,611; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 2,334,158; If hold-harmless not applied: Change in allocation: 439,547; If hold-harmless not applied: Change in allocation: 23. State: Rhode Island; Actual fiscal year 2001 allocation dollars: 409,078; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 400,585; If hold-harmless not applied: Change in allocation: -8,493; If hold-harmless not applied: Change in allocation: -2. State: South Carolina; Actual fiscal year 2001 allocation dollars: 610,665; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 609,430; If hold-harmless not applied: Change in allocation: -1,235; If hold-harmless not applied: Change in allocation: 0. State: South Dakota; Actual fiscal year 2001 allocation dollars: 323,127; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 307,735; If hold-harmless not applied: Change in allocation: -15,392; If hold-harmless not applied: Change in allocation: -5. State: Tennessee; Actual fiscal year 2001 allocation dollars: 702,615; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 762,572; If hold-harmless not applied: Change in allocation: 59,957; If hold-harmless not applied: Change in allocation: 9. State: Texas; Actual fiscal year 2001 allocation dollars: 2,641,843; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 2,553,351; If hold-harmless not applied: Change in allocation: -88,492; If hold-harmless not applied: Change in allocation: -3. State: Utah; Actual fiscal year 2001 allocation dollars: 435,415; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 476,680; If hold-harmless not applied: Change in allocation: 41,265; If hold-harmless not applied: Change in allocation: 9. State: Vermont; Actual fiscal year 2001 allocation dollars: 338,113; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 342,604; If hold-harmless not applied: Change in allocation: 4,491; If hold-harmless not applied: Change in allocation: 1. State: Virginia; Actual fiscal year 2001 allocation dollars: 1,264,184; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 1,155,528; If hold-harmless not applied: Change in allocation: -108,656; If hold-harmless not applied: Change in allocation: -9. State: Washington; Actual fiscal year 2001 allocation dollars: 1,017,738; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 1,032,268; If hold-harmless not applied: Change in allocation: 14,530; If hold-harmless not applied: Change in allocation: 1. State: West Virginia; Actual fiscal year 2001 allocation dollars: 531,741; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 452,190; If hold-harmless not applied: Change in allocation: -79,551; If hold-harmless not applied: Change in allocation: -15. State: Wisconsin; Actual fiscal year 2001 allocation dollars: 1,120,267; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 1,110,028; If hold-harmless not applied: Change in allocation: -10,239; If hold-harmless not applied: Change in allocation: -1. State: Wyoming; Actual fiscal year 2001 allocation dollars: 433,169; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: 259,130; If hold-harmless not applied: Change in allocation: -174,039; If hold-harmless not applied: Change in allocation: -40. State: Totals; Actual fiscal year 2001 allocation dollars: $50,069,054; [Empty]; If hold-harmless not applied: Fiscal year 2002 allocation: $51,304,403; If hold-harmless not applied: Change in allocation: $1,235,349; If hold-harmless not applied: Change in allocation: [Empty]. Source: GAO analysis of BLS funding data. [End of table] [End of section] Appendix IV: States Ranked by Size: Table 4: States Ranked by Size (from Largest to Smallest) Based on Number of Business Establishments in ES-202 Data: State: California; Average number of establishments for 2001: 1,084,308; Percentage of total establishments: 13.4. State: New York; Average number of establishments for 2001: 539,709; Percentage of total establishments: 6.7. State: Texas; Average number of establishments for 2001: 491,907; Percentage of total establishments: 6.1. State: Florida; Average number of establishments for 2001: 460,048; Percentage of total establishments: 5.7. State: Pennsylvania; Average number of establishments for 2001: 334,747; Percentage of total establishments: 4.1. State: Illinois; Average number of establishments for 2001: 319,595; Percentage of total establishments: 4.0. State: Ohio; Average number of establishments for 2001: 287,264; Percentage of total establishments: 3.6. State: Michigan; Average number of establishments for 2001: 258,750; Percentage of total establishments: 3.2. State: New Jersey; Average number of establishments for 2001: 256,594; Percentage of total establishments: 3.2. State: Georgia; Average number of establishments for 2001: 239,426; Percentage of total establishments: 3.0. State: North Carolina; Average number of establishments for 2001: 225,387; Percentage of total establishments: 2.8. State: Washington; Average number of establishments for 2001: 220,225; Percentage of total establishments: 2.7. State: Virginia; Average number of establishments for 2001: 197,936; Percentage of total establishments: 2.4. State: Massachusetts; Average number of establishments for 2001: 191,685; Percentage of total establishments: 2.4. State: Missouri; Average number of establishments for 2001: 163,670; Percentage of total establishments: 2.0. State: Minnesota; Average number of establishments for 2001: 156,025; Percentage of total establishments: 1.9. State: Colorado; Average number of establishments for 2001: 154,196; Percentage of total establishments: 1.9. State: Indiana; Average number of establishments for 2001: 150,921; Percentage of total establishments: 1.9. State: Wisconsin; Average number of establishments for 2001: 147,743; Percentage of total establishments: 1.8. State: Maryland; Average number of establishments for 2001: 145,861; Percentage of total establishments: 1.8. State: Tennessee; Average number of establishments for 2001: 125,593; Percentage of total establishments: 1.6. State: Arizona; Average number of establishments for 2001: 119,279; Percentage of total establishments: 1.5. State: South Carolina; Average number of establishments for 2001: 115,432; Percentage of total establishments: 1.4. State: Louisiana; Average number of establishments for 2001: 115,223; Percentage of total establishments: 1.4. State: Oregon; Average number of establishments for 2001: 113,487; Percentage of total establishments: 1.4. State: Alabama; Average number of establishments for 2001: 111,007; Percentage of total establishments: 1.4. State: Connecticut; Average number of establishments for 2001: 108,725; Percentage of total establishments: 1.3. State: Kentucky; Average number of establishments for 2001: 108,375; Percentage of total establishments: 1.3. State: Iowa; Average number of establishments for 2001: 92,817; Percentage of total establishments: 1.1. State: Oklahoma; Average number of establishments for 2001: 90,328; Percentage of total establishments: 1.1. State: Kansas; Average number of establishments for 2001: 81,325; Percentage of total establishments: 1.0. State: Arkansas; Average number of establishments for 2001: 73,031; Percentage of total establishments: 0.9. State: Utah; Average number of establishments for 2001: 68,668; Percentage of total establishments: 0.8. State: Mississippi; Average number of establishments for 2001: 63,749; Percentage of total establishments: 0.8. State: Nebraska; Average number of establishments for 2001: 52,649; Percentage of total establishments: 0.7. State: Nevada; Average number of establishments for 2001: 51,515; Percentage of total establishments: 0.6. State: New Mexico; Average number of establishments for 2001: 48,833; Percentage of total establishments: 0.6. State: Idaho; Average number of establishments for 2001: 46,657; Percentage of total establishments: 0.6. State: West Virginia; Average number of establishments for 2001: 46,566; Percentage of total establishments: 0.6. State: Maine; Average number of establishments for 2001: 46,546; Percentage of total establishments: 0.6. State: New Hampshire; Average number of establishments for 2001: 46,406; Percentage of total establishments: 0.6. State: Montana; Average number of establishments for 2001: 40,553; Percentage of total establishments: 0.5. State: Hawaii; Average number of establishments for 2001: 35,428; Percentage of total establishments: 0.4. State: Rhode Island; Average number of establishments for 2001: 33,624; Percentage of total establishments: 0.4. State: District of Columbia; Average number of establishments for 2001: 28,561; Percentage of total establishments: 0.4. State: South Dakota; Average number of establishments for 2001: 27,342; Percentage of total establishments: 0.3. State: Delaware; Average number of establishments for 2001: 25,190; Percentage of total establishments: 0.3. State: Vermont; Average number of establishments for 2001: 24,060; Percentage of total establishments: 0.3. State: North Dakota; Average number of establishments for 2001: 23,258; Percentage of total establishments: 0.3. State: Wyoming; Average number of establishments for 2001: 21,429; Percentage of total establishments: 0.3. State: Alaska; Average number of establishments for 2001: 19,410; Percentage of total establishments: 0.2. Source: BLS ES-202 data. [End of table] FOOTNOTES [1] This $80 million was allocated for the operation of base programs; BLS provided additional funding to states for special projects. [2] The ES-202 program covers approximately 97 percent of employment in the United States. Groups that are not covered include members of the armed forces and the self-employed. [3] In addition to ES-202 and CES data, the LAUS program uses data from other sources, most notably the Current Population Survey conducted by the Bureau of the Census for BLS. [4] See pages 33, 40, 57, 77, 82, and 102 of U.S. General Accounting Office, Formula Grants: Effects of Adjusted Population Counts on Federal Funding to States, GAO/HEHS-99-69 (Washington, D.C.: Feb. 26, 1999) for more information on programs using state per capita personal income in their funding formulas. [5] In fiscal year 2002, BLS began using average state government salaries from a BLS publication instead of data submitted by states on the salaries of LMI office staff. [6] We determined a state’s size based on the number of business establishments in the state, as shown in appendix IV. [7] The hold-harmless approach will result in a gradual phase-in of changes to states’ allocations. Under this approach, states whose funding would have declined under the allocation change will have their base program funding held at or about the fiscal year 2001 level. Also, states whose funding would have increased under the allocation change will get all increases available under future appropriations. The potential future impact of the allocation change on individual state’s funding levels can be seen by looking at the funding changes that would have occurred if the hold harmless approach were not used. See appendix III. [8] According to BLS officials, salaries account for 70 to 80 percent of the expenses for state LMI programs. [9] The five states include two states--Minnesota and New York--that expect to receive funding increases because of the allocation change and three states--Florida, Montana, and Wyoming--that expect to have their funding held at past levels without increases because of the allocation change. [10] According to BLS officials, BLS has taken various actions, such as centralizing some of the monthly data collection and taking over the systems development and support work, that have reduced state workloads in the CES program. GAO’s Mission: The General Accounting Office, the investigative arm of Congress, exists to support Congress in meeting its constitutional responsibilities and to help improve the performance and accountability of the federal government for the American people. 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