US Mayor Article

An Undercount in Census 2000 Could Cause Metro Areas to Lose More Than $11 Billion

By Larry Jones
March 20, 2000


In a March 9 report released by the U.S. Census Monitoring Board Presidential Members, metropolitan areas stand to lose an enormous amount in federal aid over the next ten years if the undercount in Census 2000 is similar to the undercount that took place in the 1990 census.

According to PricewaterhouseCoopers, one of the nation’s leading professional services firms, 169 metropolitan areas stand to lose an estimated $11.1 billion, which would amount to an average loss of $3,391 per undercounted individual for affected jurisdictions. The study is reportedly the first comprehensive analysis of how the upcoming census could affect the allocation of federal funds to states, metropolitan areas and center counties of metropolitan areas during the period between 2002 and 2012.

The study shows the six hardest hit metropolitan areas include some of the nation’s most populous regions—New York City, Los Angeles-Long Beach, Riverside-San Bernardino, San Diego, Houston and Miami. Each of these areas would lose more than $300 million over the next decade. The New York City metro area is estimated to lose $2.3 billion while the Los Angeles metro area would lose $1.8 billion. The Houston metro areas would lose $488 million while the Riverside-San Bernardino metro area would lose $441 million. Also, the San Diego metro area would lose $ 372 million and the Miami metro area would lose $302 million. (See page 17 for impact on selected cities.)

Collectively metropolitan areas would suffer a greater loss than states because they “would not only share in the states losses, but would also lose funds to other areas within the state because of the high relative undercount of urban centers,” said Dr. Peter Merrill who heads PricewaterhouseCoopers’ National Economic Consulting group. And according to Gilbert F. Casellas, Presidential Co-Chair of the Monitoring Board, the “study confirms that a 2000 undercount would result in federal funds being sent to places where the need is not the greatest.”

Dr. Merrill also explained that actual funding losses could be significantly higher than projected because data were not available to analyze all of the affected Federal programs or any of the state programs distributed based on census data. The study is based on the same 15 programs analyzed by the General Accounting Office in its 1999 report on the impact of the 1990 census undercount. These include Medicaid, Foster Care, Social Service Block Grants, Substance Abuse Prevention and Treatment Block Grants, Child Care and Development Block Grants and Vocational Education Block Grants.

The hardest hit states include California which would lose an estimated $5 billion, Texas which would lose $2 billion, and Florida which would lose $500 million. Overall, the study found that 26 states would lose a minimum of $9.1 billion. Even in states that are projected to be counted relatively well in the 2000 census, the study estimates that poorly counted counties within those states would suffer a net loss of federal funds. For example, the study projects that Massachusetts and Illinois will experience relatively low undercount rates but Suffolk County (Boston) will lose an estimated $154 million and Cook County (Chicago) will lose $219 million.

 In 1990, the U.S. Census Bureau estimated the net national undercount rate was 1.59 percent of the population or approximately 4 million people. PricewaterhouseCoopers estimates that the undercount rate will be 1.75 for Census 2000 or approximately 5 million people. Considering that  $185 billion in federal funds are allocated to state and local governments based on their relative share of the U.S. population, it is easy to understand how a significant undercount can cause local areas to lose an enormous amount of federal funds over a ten-year period.

To address the undercount problem in the 2000 census, the Bureau plans to conduct an Accuracy and Coverage Evaluation (ACE) survey, a scientific analysis that will measure the accuracy of the actual census count by determining which areas and demographic groups have been undercounted or over counted and to what extent. Based on information from the ACE survey, the Bureau will make adjustments in each local area’s census count for any undercounting or over counting. In the end, the Bureau will publish two set of numbers, one showing each local area’s population from the unadjusted actual head count, and another showing the population adjusted for undercounting and over counting.

The Supreme Court ruled last year that the actual head count numbers must be used for purposes of reapportionment but the adjusted numbers may be used for redistricting and distributing federal funds. However, legislation has been introduced in several state legislatures to prohibit the use of adjusted census numbers for redistricting. The Conference has long supported the use of modern scientific methods to improve the accuracy of the census.

A complete copy of the Pricewaterhouse Cooper report can be accessed via the web at www.cmbp.gov