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Embargoed for Release: March 9, 2000
Contact: John Chambers 301-713-6672


PRICEWATERHOUSECOOPERS PROJECTS $11 BILLION LOSS IN FEDERAL FUNDS TO STATE AND LOCAL GOVERNMENTS IF CENSUS 2000 IS "UNDERCOUNTED"

Study Confirms Economic Importance of Completing Census Forms

 

WASHINGTON - PricewaterhouseCoopers, one of the nation's leading professional services firms, has determined that economic harm to states, counties, and metropolitan areas could occur over the next 10 years if Americans fail to fill out and return their Census 2000 questionnaires.

PricewaterhouseCoopers, at the request of the Presidential members of the U.S. Census Monitoring Board, conducted the first comprehensive analysis of how the upcoming census could affect the allocation of Federal funds among the states, metropolitan areas, and center counties of metropolitan areas during the period covered by Census 2000, fiscal years 2002-2012.

The study found that a population "undercount" similar to that which occurred in 1990 would cost 26 states a minimum of $9.1 billion. States with the largest numerical undercounts would be hit the hardest. California would lose more than $5 billion, Texas nearly $2 billion, and Florida $500 million.

Even in states that are projected to be counted relatively well this year, poorly counted counties within those states would suffer a net loss of Federal funds. For example, Massachusetts and Illinois are projected to have relatively low undercount rates, but Suffolk County (Boston) is estimated to lose $154 million and Cook County (Chicago) would lose $219 million.

Indeed, when analyzed at the metropolitan area level, PricewaterhouseCoopers found that 169 metro areas stand to lose $11.1 billion an average of $3,391 per uncounted individual. Six metropolitan areas would each lose more than $300 million in Federal funds. These include New York City; Los Angeles-Long Beach, Riverside-San Bernadino, and San Diego in California; Houston in Texas; and Miami in Florida. The New York City metropolitan area alone would lose $2.3 billion, while Los Angeles County would lose $1.8 billion.

"This study confirms that a 2000 undercount would result in Federal funds being sent to places where the need is not the greatest," said Gilbert F. Casellas, Presidential Co-Chair of the Monitoring Board. "Americans need to know that the fair return of tax dollars to local communities depends on everyone mailing back their census forms."

Added Dr. Peter Merrill, head of PricewaterhouseCoopers' National Economic Consulting group, "Metropolitan areas would not only share in state losses, but would also lose funds to other areas within the state because of the high relative undercount of urban centers."

He said the 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. "Our projected funding distortions should be treated as conservative," he said.

In conducting its analysis, PricewaterhouseCoopers applied the 1990 demographic undercount rates to the latest population estimates published by the U.S. Census Bureau in order to estimate the 2000 undercount rates. PricewaterhouseCoopers then calculated the projected funding levels for approximately 82 percent of the largest population-based Federal programs, using the FY 2000 Current Services Budget as a baseline.

The complete PricewaterhouseCoopers report, including specific results by program and year for every area of geography measured can be accessed via the web at www.cmbp.gov or www.pwcglobal.com.

Mr. Casellas and the other Presidential members of the Monitoring Board - California Lt. Governor Cruz M. Bustamante, Dr. Everett M. Ehrlich, former Undersecretary of Commerce for Economic and Business Affairs, and Lorraine A. Green, former Deputy Director of the Office of Personnel Management stressed that the Census Bureau is committed to counting every person in the country.

"The 2000 census plan is the largest and most sophisticated peacetime mobilization in American history," said Ms. Green. "Hopefully, the results of this study will persuade more Americans to participate in the census." Indeed, a recent national poll sponsored by the Monitoring Board found that Americans who are undecided about participating became much more motivated to do so after learning that the census determines where Federal dollars get spent.

Dr. Ehrlich pointed out that the PricewaterhouseCoopers study shows that the Census Bureau's planned Accuracy and Coverage Evaluation (ACE) survey is "an essential insurance policy" in the event of an undercount.

The ACE program is an extensive scientific analysis that will measure the accuracy of the actual enumeration, including which areas and demographic groups have been undercounted and to what degree. The Bureau's use of such modern statistical methods has been endorsed by the National Academy of Sciences and other nonpartisan experts, but certain political interests remain opposed to correcting a census undercount. Yet, as Dr. Ehrlich said, "PricewaterhouseCoopers has observed that an incomplete or uncorrected census would result in fewer services for families and communities in need."

Lt. Governor Bustamante added, "This is not a question of partisan politics. This is a question of fairness and good government. Each of us, as taxpayers, has the right to expect that those federal dollars are distributed fairly."

Approximately $185 billion in Federal funds are allocated each year based on each state's respective share of the U.S. population, as determined every 10 years by the census. The PricewaterhouseCoopers study examined the same 15 programs analyzed by the General Accounting Office in its 1999 report on the funding impact of the 1990 census undercount. The eight programs most affected by the census are Medicaid, Foster Care, Rehabilitation Services Basic Support, Social Services Block Grants, Substance Abuse Prevention and Treatment Block Grants, Adoption Assistance, Child Care and Development Block Grants, and Vocational Education Block Grants.

Census Day 2000 is April 1.


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