Survey Results on the Effects of a Two-Thirds Cut in State Set-Aside Funds under the Workforce Investment Act

As part of the Continuing Appropriations Act of 2011, (P.L. 111-10), the Workforce Investment Act’s state set-aside (also known as the Governors’ Reserve) was reduced from 15 percent to 5 percent, a reduction of $206.2 million or 67 percent. These funds have been used for required and allowable activities, including many innovative workforce activities.

The survey reveals the set-aside funds are spent in a very timely manner. States report most, if not all, of their funds from program year (PY) 2008 had been obligated and spent. For program year 2009, the average state had obligated 92% of its funds and spent 82%. During the first three quarters of the current program year (2010), on average, states had obligated 60% and spent 34% of their funds.