Formula Programs

A total of 100 federal programs providing grants at the state and local levels use population-related data in formulas that allocate all or part of program grant money. While these programs had total estimated obligations of about $116 billion in fiscal year 1991, the amount of funding influenced by population data was substantially less than that because some programs allocated only a small portion of their total grants according to population data. Of the 100 programs, 30 use data elements for which the decennial census is the only source of information. While hard to predict precisely, the general effect of using adjusted 1990 census population for federal funding purposes would likely be small as a percentage of total funding. Using 1990 adjusted population data in place of the decennial census figures, GAO simulated allocations for three major federal programs--Social Services Block Grant, certain Federal Aid-Highway Programs in which population is a factor, and Medicaid. GAO found that the use of adjusted data would redistribute less than half of a percent of total funding. Some individual states, however, would incur estimated changes of more than $1 million in their allocations; the effect of such differences becomes more substantial when applied over an entire decade. Redistribution of funds to localities could have a greater impact. Because of the time involved to complete the necessary methodological research, the Census Bureau believes that any intercensal population estimates incorporating a correction for census undercoverage could not be made available before mid-1992 or early 1993. GAO summarized this report in testimony before Congress; see: Potential Impact of Using Adjusted Census Counts for Federal Formula Programs, by L. Nye Stevens, Director of Government Business Operations Issues, before the Subcommittee on Government Information and Regulation, Senate Committee on Governmental Affairs. GAO/T-GGD-92-5, Nov. 13, 1992 (six pages).

GAO found that: (1) in fiscal year (FY) 1991, 100 federal programs providing grants at the state and local levels used population data directly or indirectly to allocate at least some portion of their grant funds; (2) during FY 1991, the 100 programs had total estimated obligations of about $116 billion; (3) since some programs allocated only a portion of their total grants through formulas that included population data elements, the amount of funding influenced by population data was less than that total; (4) the effect of substituting 1990 adjusted population data for the decennial census data in federal funding formulas would be relatively small, because of the multiple variables involved in determining fund allocations and the fact that most federal funding formulas use data aggregated at a state level; (5) since more time has been available to perfect the methodology for adjustment, and estimates were not produced for very small geographic areas, the Bureau might be able to adjust intercensal population estimates for the FY 1990 census net undercount; and (6) any data incorporating a correction for census net undercounts will not be available before mid-1992 or early FY 1993, because of the time involved to complete the necessary methodological research.