Federal funding formulas and the 1980 census

Distribution of federal funds has achieved equal status with Congressional reapportionment as a motivation and justification for the Census of Population and Housing. This article describes the effects that U.S. population redistribution during the 1970s, as measured by the 1980 Census, will have on the spatial distribution of federal grants-in-aid provided to state and local governments through programs with formula-based funding systems. The conclusion is that funding changes will not match population changes. The overall redistribution of federal grants-in-aid to state and local governments occurring in response to incorporation of 1980 Census population counts into federal funding formulas will be far less than the level of population redistribution since 1970. Use of intercensal data, formula specifications, limited geographic specificity in many formula allocations, and nonformula determinants of formula-based grants all weaken the relationship between Census-measured population change and the receipt of federal funds at the local level. Despite all the intervening factors, it is probably that in many programs there will be some redistribution of funds when the 1980 Census counts are incorporated into the allocation formulas. But the importance of measurement errors and threshold and reclassification effects may equal that of true population change in determining the funds received by local communities.