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Inevitable Shifts in Federal Funds

Fiscal year 2010 is drawing near and with it the decennial census. The decennial census is the heart of determining the nations' population. In addition to providing a count of the population every ten years and serving as a basis for population estimates made during the years the between the censuses, the census is also used to allocate billions of dollars to state and local governments.

On October 29, 2007, the Government Accountability Office stated that in 2000 eighty-five percent of federal government obligations in grants to state and local governments were distributed on the basis of formulas that use the census results. As states budgets begins to solidify over the next fiscal year, the need for an accurate population count is imperative since countless federal grant programs (Medicaid, TANF, etc) rely directly or indirectly on population measures.

For example, in fiscal year 2004 the federal government allocated $1.7 billion to states in block grant funds under the Social Services Block Grant program (SSBG). When allocations were recalculated using statistical population estimates from the 2000 Accuracy and Coverage Evaluation, an independent sample survey used to estimate the number of people that were over- and undercounted in the census, $4.2 million in block grant funds for SSGB would have shifted. In other words, twenty-seven states and the District of Columbia would have gained $4.2 million and 23 states would have lost a $4.2 million, based on the simulation of the funding formula for the SSBG. The largest shifts in the simulation were for Washington, D.C., which would have gained $67, 000 in grant funding and Minnesota which would have lost $344,000.

GovWin's Take

  • As the government becomes more visible with the allocation of monies, new methods may be implemented to assure accurate census population counts. This may lead to more IT initiatives and policy changes for the U.S. Census Bureau to aid in precise population counts.

  • As budget crunches are on the horizon in the next few fiscal years, it is crucial that states head discussions and solutions for improvement for the U.S. Census Bureau to ensure they are receiving accurate amounts of money.

  • Formula grants affect a number of major programs (Medicaid, TANF, etc) that are important to vendors. The fluctuation of funds being allocated to these programs determines the amount of money allocated toward future IT purchases for those states.

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