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The 2020 Census and Its Likely Impact on State and Local Government Finances

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.

By Stephen R. Rolandi
March 11, 2021

For the last few years, there has been a great deal of interest, anxiety and controversy over the 2020 National Census. The Census is mandated by the Federal Constitution (see Article I, Section 2), and has been conducted every ten years since 1790. The 2020 Census was the first United States census to offer options for persons to respond online or by phone, in addition to the option to respond on a paper form, as was done in prior census enumerations.

Title 13 of the United States Code (USC), requires that all persons in the United States age 18 years of age and older are obligated to answer census questions, and to do so honestly. On Census Reference Day, which was April 1, 2020, the resident population of the United States—the 50 states, the District of Columbia and excluding overseas territories, military members stationed abroad and civilian United States citizens living abroad)—was projected to be approximately 329.5 million, or roughly 20 million more than the population count recorded for the 2010 Census. This represents a nearly 7% increase in the population of the United States.

The Census is vitally important in determining a state’s representation of seats in the House of Representatives, and by extension its representation in the Electoral College, covering elections from 2022 to 2030. The Census data is used by state officials to redraw boundaries not only for congressional districts, but also for state legislative and school districts.

The New York Times recently reported (see, “Delay in Census Data Could Affect Elections for Congress in 2022,” NYT, February 12, 2021) that the delivery deadlines have been delayed first by the COVID-19 pandemic and then by the previous administration’s interference, such that this data might not be available until late September 2021, potentially causing problems for re-apportionment processes.

As public administrators, we need to be aware that the 2020 Census will have a profound effect on state and local government finances, particularly when one considers that states and localities have been ravaged by the impact of the COVID-19 pandemic.

The Census creates over 52 datasets and statistical indicators (such as income measures, poverty thresholds and the Consumer Price Index (CPI) for over 300 required Federal spending programs that rely on data derived from the decennial status, to guide the geographic distribution of funds to states, counties, cities and households. The bottom line is that results from the 2020 Census will determine how over $500 billion in federal funds are distributed to state and local governments annually. This year, the census will also play a role in the targeting of funds from the various Federal stimulus spending bills, such as the CARES Act.

Some of these programs include:

  • Medicaid.
  • Medicare.
  • Head Start.
  • Foster Care.
  • State Children’s Health Insurance (CHIP) Program.
  • Women, Infants and Children nutrition (WIC) Program.
  • Various Federal transportation (FHWA/FTA) and housing programs.

In the area of intergovernmental relations (IGR), specifically grants to states and local governments, census data can be used to derive spending formulae for specific programs, depending on how the programs are structured. The data can also be used for Federal matching rates, reimbursement rates or other program features that may affect funding to the states. The key thing to remember here is that state and local governments (unlike the Federal government) are required by their state constitutions and statutes to balance their budgets every year—so federal grants can indeed be vital in constructing state and local government budgets.

In addition, data results from the census help governments decide where to site hospitals, schools, bus routes, senior citizen and day care centers and various other types of facilities.

Such data is also valuable for local planning agencies in providing information on changing neighborhoods and demographics. Census data helps businesses decide where to locate their branches in communities.

It is a natural response for states and local governments to be concerned what the late release of census data may mean for mandated reapportionment and independent redistricting commission efforts. They likewise need to be concerned how the late release of census data may impact on their ability to meet mandated state and local government budget deadlines, at least for the first year following release of census data.

Some states and local governments may be better able to handle the effects of late census data and attendant potential reductions in grant aid than others. One can only hope that some states have sufficient budgetary reserves and a recovering national/local economy may tide things over for a short term period.

Time will tell. Stay tuned.

Author: Stephen R. Rolandi “retired” in 2015 after serving with the State and City of New York. He holds BA and MPA degrees from New York University, and studied law at Brooklyn Law School. He teaches public finance and management as an Adjunct Professor of Public Administration at John Jay College of Criminal Justice (CUNY) and Pace University. Professor Rolandi is a Trustee of NECoPA; President-emeritus of ASPA’s New York Metropolitan Chapter and was Senior National Council Representative for 4 terms. He has also served on many other association boards in New York City, Westchester County (New York State) and Washington, DC.

You can reach him at: [email protected] or [email protected] or at 914.536.594 or 212.237.8000.

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