Census adjustment and the distribution of federal spending

In 1989, programs that use population counts to determine the distribution of their funds transferred $236 per capita to state and local governments. If the 1990 census were adjusted to reflect undercounting, about 40% of state and local governments would receive increased grants averaging $56 per miscounted person; other jurisdictions would lose an almost equal amount of grant money. The surprisingly small reallocations arise because 1) total funds allocated by population are essentially fixed; 2) allocations depend on other factors in addition to population; and 3) programs vary as to whether they allocate funds in direct or inverse proportion to population.