[House Hearing, 105 Congress]
[From the U.S. Government Publishing Office]



 
              OVERSIGHT OF METROPOLITAN STATISTICAL AREAS
=======================================================================

                                HEARING

                               before the

                 SUBCOMMITTEE ON GOVERNMENT MANAGEMENT,
                      INFORMATION, AND TECHNOLOGY

                                 of the

                              COMMITTEE ON
                           GOVERNMENT REFORM
                             AND OVERSIGHT
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED FIFTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 29, 1997

                               __________

                           Serial No. 105-79

                               __________

Printed for the use of the Committee on Government Reform and Oversight











                       U.S. GOVERNMENT PRINTING OFFICE
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              COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT

                     DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York         HENRY A. WAXMAN, California
J. DENNIS HASTERT, Illinois          TOM LANTOS, California
CONSTANCE A. MORELLA, Maryland       ROBERT E. WISE, Jr., West Virginia
CHRISTOPHER SHAYS, Connecticut       MAJOR R. OWENS, New York
STEVEN SCHIFF, New Mexico            EDOLPHUS TOWNS, New York
CHRISTOPHER COX, California          PAUL E. KANJORSKI, Pennsylvania
ILEANA ROS-LEHTINEN, Florida         GARY A. CONDIT, California
JOHN M. McHUGH, New York             CAROLYN B. MALONEY, New York
STEPHEN HORN, California             THOMAS M. BARRETT, Wisconsin
JOHN L. MICA, Florida                ELEANOR HOLMES NORTON, Washington, 
THOMAS M. DAVIS, Virginia                DC
DAVID M. McINTOSH, Indiana           CHAKA FATTAH, Pennsylvania
MARK E. SOUDER, Indiana              ELIJAH E. CUMMINGS, Maryland
JOE SCARBOROUGH, Florida             DENNIS J. KUCINICH, Ohio
JOHN B. SHADEGG, Arizona             ROD R. BLAGOJEVICH, Illinois
STEVEN C. LaTOURETTE, Ohio           DANNY K. DAVIS, Illinois
MARSHALL ``MARK'' SANFORD, South     JOHN F. TIERNEY, Massachusetts
    Carolina                         JIM TURNER, Texas
JOHN E. SUNUNU, New Hampshire        THOMAS H. ALLEN, Maine
PETE SESSIONS, Texas                 HAROLD E. FORD, Jr., Tennessee
MICHAEL PAPPAS, New Jersey                       ------
VINCE SNOWBARGER, Kansas             BERNARD SANDERS, Vermont 
BOB BARR, Georgia                        (Independent)
ROB PORTMAN, Ohio
                      Kevin Binger, Staff Director
                 Daniel R. Moll, Deputy Staff Director
         William Moschella, Deputy Counsel and Parliamentarian
                       Judith McCoy, Chief Clerk
                 Phil Schiliro, Minority Staff Director
                                 ------                                

   Subcommittee on Government Management, Information, and Technology

                   STEPHEN HORN, California, Chairman
PETE SESSIONS, Texas                 CAROLYN B. MALONEY, New York
THOMAS M. DAVIS, Virginia            PAUL E. KANJORSKI, Pennsylvania
JOE SCARBOROUGH, Florida             MAJOR R. OWENS, New York
MARSHALL ``MARK'' SANFORD, South     ROD R. BLAGOJEVICH, Illinois
    Carolina                         DANNY K. DAVIS, Illinois
JOHN E. SUNUNU, New Hampshire
ROB PORTMAN, Ohio

                               Ex Officio

DAN BURTON, Indiana                  HENRY A. WAXMAN, California
             J. Russell George, Staff Director and Counsel
                Mark Brasher, Professional Staff Member
                 John Hynes, Professional Staff Member
                          Andrea Miller, Clerk
           David McMillen, Minority Professional Staff Member













                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on July 29, 1997....................................     1
Statement of:
    Hinchey, Hon. Maurice D., a Representative in Congress from 
      the State of New York......................................    27
    Holden, Hon. Tim, a Representative in Congress from the State 
      of Pennsylvania............................................     5
    Hunter, Hon. Duncan, a Representative in Congress from the 
      State of California........................................    17
    Katzen, Sally, Administrator, Office of Information and 
      Regulatory Affairs, Office of Management and Budget........    38
    Mink, Hon. Patsy T., a Representative in Congress from the 
      State of Hawaii............................................     9
    Redmond, Hon. Bill, a Representative in Congress from the 
      State of New Mexico........................................    24
    Spar, Ed, executive director, Council of Professional 
      Associations on Federal Statistics; and Alvin Marshall, 
      member of the board of directors, Schuylkill Economic 
      Development Corp...........................................    73
Letters, statements, etc., submitted for the record by:
    Davis, Hon. Danny K., a Representative in Congress from the 
      State of Illinois, prepared statement of...................    35
    Hinchey, Hon. Maurice D., a Representative in Congress from 
      the State of New York, prepared statement of...............    29
    Holden, Hon. Tim, a Representative in Congress from the State 
      of Pennsylvania, prepared statement of.....................     7
    Horn, Hon. Stephen, a Representative in Congress from the 
      State of California, prepared statement of.................     3
    Hunter, Hon. Duncan, a Representative in Congress from the 
      State of California, prepared statement of.................    18
    Katzen, Sally, Administrator, Office of Information and 
      Regulatory Affairs, Office of Management and Budget:
        Memorandum dated May 5, 1994.............................    59
        Prepared statement of....................................    43
    Maloney, Hon. Carolyn B., a Representative in Congress from 
      the State of New York, prepared statement of...............    32
    Marshall, Alvin, member of the board of directors, Schuylkill 
      Economic Development Corp.:
        Letters concerning people who feel strongly about 
          becoming an MSA........................................    84
        Prepared statement of....................................    94
    Mink, Hon. Patsy T., a Representative in Congress from the 
      State of Hawaii:
        Letters dated July 25, 1997..............................    10
        Prepared statement of....................................    15
    Redmond, Hon. Bill, a Representative in Congress from the 
      State of New Mexico, prepared statement of.................    25
    Spar, Ed, executive director, Council of Professional 
      Associations on Federal Statistics, prepared statement of..    76

















              OVERSIGHT OF METROPOLITAN STATISTICAL AREAS

                              ----------                              


                         TUESDAY, JULY 29, 1997

                  House of Representatives,
Subcommittee on Government Management, Information, 
                                    and Technology,
              Committee on Government Reform and Oversight,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 9:30 a.m., in 
room 2154, Rayburn House Office Building, Hon. Stephen Horn 
(chairman of the subcommittee) presiding.
    Present: Representatives Horn, Sununu, Maloney, and Davis 
of Illinois.
    Staff present: J. Russell George, staff director and chief 
counsel; Mark Brasher and John Hynes, professional staff 
members; Andrea Miller, clerk; and David McMillen, minority 
professional staff member.
    Mr. Horn. The Subcommittee on Government Management, 
Information, and Technology will come to order.
    A metropolitan area is an area with a large population 
center that is economically and socially integrated with 
adjacent communities. The Office of Management and Budget 
designates and defines metropolitan areas following a set of 
official standards. These standards were last modified in 1990.
    Metropolitan area designations are used as a framework for 
the Federal statistical system. They are also important to 
local community leaders for promoting a community as a business 
district. State governments use metropolitan areas to make 
communities eligible for programs that may be focused on urban 
or rural districts. The private sector uses metropolitan areas 
to develop sales territories and market new products, among 
other uses.
    Some have argued that Federal standards for population 
density and contiguous population requirements do not take into 
account variances such as geographic barriers. Certain kinds of 
economic activity, such as intensive mining, may disqualify a 
community from metropolitan area designation because of the 
contiguous population requirement.
    In addition, some communities have argued they face unfair 
barriers to recognition because they are squeezed between 
several existing metropolitan areas. For example, a requirement 
that 15 percent of workers commute to a single metropolitan 
area may be unattainable if the community has several 
surrounding metropolitan areas that each draw 10 percent.
    The communities and their elected representatives argue 
that ignoring these anomalies is unfair. It can reduce access 
to government programs because State governments often use 
Federal metropolitan designations. Designation as a 
metropolitan area also allows Federal funding to go directly 
through the local agency rather than through the State 
government.
    This hearing will allow Congress to examine these and other 
issues surrounding this important statistical designation. We 
will receive testimony from Members of Congress, administration 
officials involved in administering Federal statistical 
operations, and others in the private sector who are affected 
by the issue.
    We are fortunate to be joined by Representatives Tim Holden 
from Pennsylvania, Patsy Mink of Hawaii, Duncan Hunter of 
California, and Maurice Hinchey of New York. We are equally 
fortunate to be joined by Sally Katzen, Administrator, Office 
of Information and Regulatory Affairs, Office of Management and 
Budget; Mr. Ed Spar, executive director, Council of 
Professional Associations on Federal Statistics and Mr. Alvin 
Marshall, member of the board of directors, Schuylkill Economic 
Development Corp.
    We thank all of our witnesses for being with us today and 
we look forward to your testimony.
    [The prepared statement of Hon. Stephen Horn follows:]



    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Horn. Why don't we just go in the order of the Members 
that are on the agenda.
    Mr. Holden.

STATEMENT OF HON. TIM HOLDEN, A REPRESENTATIVE IN CONGRESS FROM 
                   THE STATE OF PENNSYLVANIA

    Mr. Holden. Good morning, Mr. Chairman, and we thank you 
very much for holding this very important hearing.
    We come before you today representing a bipartisan 
coalition of Members of Congress stretching across America from 
New York to Hawaii, and their respective communities. The issue 
at hand is the need to change the standard for the 2000 Census, 
allowing counties with 100,000 population or more to be 
designated as a metropolitan statistical area.
    Under the standards established for the 1990 census, 
metropolitan statistical area status could be conferred on a 
county by having, A, an urbanized area with a core population 
of 50,000 people and a county population of 100,000 people; B, 
a contiguous population of 50,000 people in a county of at 
least 100,000 people; or C, an area contiguous to a previously 
designated MSA with an out-migration of at least 15 percent of 
the population to the previously designated MSA.
    Applying this criteria to all of the counties in our 
coalition makes the existing standards questionable at best and 
unfair in the least.
    In my home county of Schuylkill, years of both deep mining 
and strip mining have resulted in steep slopes that are 
undevelopable, and thus do not allow us to meet the density 
requirements and the contiguous population figures necessary 
under the current standard. In arguing that these areas are not 
indeed undevelopable, Government agencies have pointed to the 
houses built on cliff sides on the West Coast as a method of 
comparison. Building on a cliff side in California to overlook 
the Pacific Ocean is far different than building on a strip 
mine slope to overlook old abandoned mines.
    Schuylkill County is currently fighting hard to overcome 
decades of high unemployment due to the decline of the coal 
industry. Unemployment in the area has gone from a high of 22 
percent in the 1960's to a current level of 8 percent due to 
the diligence and hard work of its people. The county has a 
population of 153,000 and yet is still denied MSA status due to 
antiquated standards.
    Metropolitan statistical area status is enjoyed by hundreds 
of counties throughout the United States, several of whom 
possess fewer than the 50,000 contiguous density requirement 
and have a county population of less than 100,000. These 
communities are granted MSA status because 15 percent of their 
population commute to an already designated MSA.
    Again, I compare this standard to Schuylkill County where 
22 percent of the population commutes outside the county to 
work. However, because the traveling is divided among three 
areas--Reading, Harrisburg, and Allentown--the 15 percent 
requirement is not met. Where is the fairness in this standard? 
Where is the equity in this standard? What valid justification 
is there for this arbitrary 15 percent figure?
    Fairness for communities to compete for growth and 
development depend heavily on the adoption of this standard. 
Advertising executives, marketing experts, manufacturers, and 
individuals looking to locate retail stores begin their search 
and purchases with MSAs.
    We are requesting this additional standard be added to 
allow all counties with a population of 100,000 or more people 
to be designated as a metropolitan statistical area.
    I would like to acknowledge the work of my fellow members 
of this coalition in organizing this bipartisan group and 
acknowledge the great efforts on the part of my constituents in 
both the public and private sector.
    Mr. Chairman I thank you for taking the time to hold this 
hearing this morning.
    Mr. Horn. Thank you very much.
    [The prepared statement of Hon. Tim Holden follows:]



    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Horn. Congresswoman Mink.

 STATEMENT OF HON. PATSY T. MINK, A REPRESENTATIVE IN CONGRESS 
                    FROM THE STATE OF HAWAII

    Mrs. Mink. Thank you very much, Mr. Chairman. And I too 
thank you for this opportunity to testify in support of a 
change in the metropolitan statistical area standards to allow 
12 new counties to qualify. Current regulations should be 
modified to allow a simple definition, that areas with 
populations of at least 100,000 people be approved as MSAs.
    Twelve counties are unable to qualify for MSA status 
because they do not meet the density or contiguous population 
requirements, despite the fact that these counties have 
populations well over 100,000 people. The proposed change is 
necessary to restore fairness to the MSA designation process.
    One definition already allowed under the current standard 
is that at least 15 percent of the area's population commute to 
a recognized MSA. Accordingly, 16 communities now designated 
have populations of less than 100,000 people.
    The Hawaii congressional delegation supports this change, 
and I would like to submit for the record copies of joint 
letters signed by my delegation to the chair and ranking member 
expressing this support. Our interest in this matter is that 
Maui County and the big island, Hawaii County, in the State of 
Hawaii should and could be included as MSAs if this change were 
made.
    Mr. Horn. Without objection, those letters and other 
material will be inserted in the record.
    [The information referred to follows:]



    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mrs. Mink. Thank you.
    In 1990, neither Maui County nor Hawaii County contained a 
city or urbanized area of 50,000. Kahului was counted at 16,000 
and Hilo, at 37,000. If you have visited Maui, you know that 
Kahului and Wailuku are contiguous towns and their joint 
populations might very well qualify Maui County.
    According to the Census Bureau, without a regulatory 
change, the only method under which these counties could gain a 
MSA status would be through the contracting of a special census 
to show that an urbanized area could be defined around Kahului 
or Hilo. A special census is a complicated and expensive 
process that these counties could not afford.
    As we prepare for the 2000 Census, standing regulations 
should be changed to allow a simple requirement that areas 
containing more than 100,000 people be deemed acceptable as 
MSAs. Any assistance you may provide to accomplish this change 
would be deeply appreciated by my constituents, and I thank you 
for this opportunity to testify.
    As you know, the whole idea of contiguity, as prescribed by 
the regulations, simply doesn't fit in my situation because, 
like my colleague here who described the abandoned coal fields, 
I do have the Pacific Ocean separating my populations.
    Thank you.
    Mr. Horn. Thank you.
    [The prepared statement of Hon. Patsy T. Mink follows:]


    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Horn. The gentleman from California, Mr. Hunter.

 STATEMENT OF HON. DUNCAN HUNTER, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF CALIFORNIA

    Mr. Hunter. Thank you, Mr. Chairman. Thank you for holding 
this hearing. I want to thank my colleague, Mr. Holden, for 
being the gentleman who at least from our office perspective, 
started this effort; and we quickly joined on. I want to thank 
Congresswoman Mink for her strong efforts, and Congressman 
Redmond for his efforts on this.
    Mr. Chairman, it is clear that MSA status is a standard of 
economic focus. And if you have it, you tend to get more 
economic focus and, therefore, more economic development than 
if you don't have it. So it's important, and I think its 
importance is illustrated by the community of Pocatello, ID, 
which I understand, once becoming an MSA after the 1990 census, 
has seen an interest in business locations increase by 20 
percent. In my county in Imperial County, CA, which is over the 
coastal range from San Diego County, we have an unemployment 
rate that hovers between 20 and 30 percent. We desperately need 
MSA status.
    I think the second point here has been well made by my 
colleagues and that is that there is not a logical reason for 
the denial of MSA status based on noncontiguity, I guess you 
would call it, noncontiguous communities, because these 
communities being noncontiguous is often a function of the 
economic nature of the community that we are talking about. In 
Mr. Holden's description, he talked about the steep slopes that 
are the result of mining. In my area, we have a major 
agriculture county, and we have--as the county developed and 
grew--very productive farmland, some of the most productive 
farmland in the world, lying between these communities.
    So we have a series of strong communities in Imperial 
County which, if they were not separated by this extremely 
productive, privately held farmland, would very possibly have 
melded into a contiguous community, thereby inviting MSA 
status. But they did not, and it is good that they have not, 
because we grow a great deal of the produce for this Nation in 
that county.
    Nonetheless, I think that the MSA status is logical and is 
justified in my county as in the counties of my colleagues.
    So I also have, Mr. Chairman, a number of letters that I 
would like to offer for the record, and I would hope that the 
committee would move forward and give us this designation which 
is so needed by the communities in Imperial County.
    Mr. Horn. Without objection. Those letters and materials 
will be put into the record.
    Mr. Hunter. And I offer my statement too for the record.
    Mr. Horn. That is automatic.
    [The prepared statement of Hon. Duncan Hunter follows:]



    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Horn. Mr. Redmond, the distinguished new colleague from 
New Mexico.

 STATEMENT OF HON. BILL REDMOND, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF NEW MEXICO

    Mr. Redmond. Good morning, Mr. Chairman, and thank you for 
allowing me to be here this morning; and members of the 
Subcommittee on Government Management, Information, and 
Technology, fellow Members of Congress, ladies and gentlemen of 
the audience. I am grateful to have this opportunity to express 
my views regarding the changing standards for the definition of 
metropolitan statistical areas.
    Like most of you this morning, I too believe that changing 
the MSA standards would positively impact many communities 
nationwide, including my home State of New Mexico. I believe 
that the city of Farmington in San Juan County, New Mexico, 
with MSA status, would be vital to stimulate the economic 
growth in that area. It is plagued with high unemployment and 
underemployment. There is a portion of San Juan County, on the 
Navajo reservation, where we run between 30 and 40 percent 
unemployment, and it has been that way for almost 30 years.
    As Congress' newest Member, I recently came to Washington 
with several goals, one of which is aimed at improving the 
employment opportunities in my home State of New Mexico. By 
receiving MSA status, San Juan County would be placed in a 
preferred position among national marketing directors and would 
be able to attract hotels, restaurants, and retail 
establishments. According to the 1990 census, a substantial 
portion of San Juan County workers are employed already in the 
service industries, so this would be an asset to the community.
    In addition to increased employment opportunities, a change 
in the MSA status would result in additional revenue for roads, 
homes funded through Housing and Urban Development, which is 
very important, and also Medicare reimbursements. The potential 
for improvements for the infrastructure is vast. The 
measurement of the epicenter often is not an indication of the 
population density of the region as it is in northern New 
Mexico. A recent conversation that I had with Farmington Mayor 
John Taylor revealed strong community support for MSA status 
and Mayor Taylor said that the MSA status could greatly improve 
the quality of life in San Juan County.
    Like many other communities in the Nation, San Juan 
deserves the ability to compete on a level playing field for 
Federal funds; and I support and I strongly encourage my 
colleagues to support the proposal that would change the Office 
of Management and Budget MSA standards for the 2000 Census to 
include all the counties with a population of 100,000 or more.
    And I thank you, Mr. Chairman.
    Mr. Horn. Thank you.
    [The prepared statement of Hon. Bill Redmond follows:]



    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Horn. We are now joined by our distinguished colleague 
from New York, Mr. Hinchey.

   STATEMENT OF HON. MAURICE D. HINCHEY, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF NEW YORK

    Mr. Hinchey. Thank you very much, Mr. Chairman. I very much 
appreciate the opportunity to be here this morning, and I very 
much appreciate the fact that you are conducting this hearing 
on an issue that is of great importance to the communities that 
are represented by myself and the other members here on the 
panel before you this morning.
    As you know, the current census regulations for 
metropolitan statistical areas require either an urbanized area 
with a core population of 50,000 people and a county population 
of 100,000 people, or a contiguous population of 50,000 people 
in a county of at least 100,000 people, or an area contiguous 
to a previously designated MSA with at least a 15 percent 
commuter rate to that previously designated metropolitan 
statistical area. These criteria put one of the counties that I 
represent in the 26th Congressional District in New York, 
namely Ulster County, at a distinct and perhaps insurmountable 
disadvantage.
    First, most municipalities in this particular county, 
Ulster, were incorporated more than a century ago, and in some 
cases, two or three centuries ago. As you can imagine, cities 
and towns of that age have much smaller boundaries than, for 
example, relatively new cities in the western parts of the 
country. In terms of meeting the core population and contiguity 
requirements, the communities of Ulster County are 
disadvantaged. Outer, more suburban areas incorporated within a 
western city's boundaries are incorporated into separate 
townships and villages. In the district that I represent, the 
core city in this particular county, the city of Kingston's 
more recent incorporation was at the turn of this century, and 
New York State law strongly discourages future annexation. In 
fact, as a practical matter, it is impossible.
    Second, this particular county, Ulster, faces difficulties 
in meeting the commuter rate requirements into other MSAs 
because of the congestion of our region in New York. Ulster 
County is within close proximity to three other designated MSAs 
and a reasonable distance to the New York metropolitan region. 
While Ulster has a commuter rate higher than 15 percent, 15 
percent of the population does not commute to any one MSA. But 
that higher rate of 15 percent finds themselves commuting into 
a number of metropolitan statistical areas, including the 
metropolitan area of New York City.
    Finally, the efforts of the residents of Ulster County to 
protect the integrity of its communities effectively prohibit 
Ulster County from becoming an MSA. Ulster County is a 
scenically rich and historically important area. Because we 
have made a concerted effort to preserve the unique character 
of our region, instead of promoting strip mall development up 
and down the main thoroughfares, we fail to meet the census 
contiguity requirements. The Census requirements seem designed 
for areas with steady, consistent geography. With its wetlands 
and rolling hills and open rural areas, the topography of 
Ulster County cannot fit these particular designations and 
requirements. For these reasons and others, we believe that 
changes to the metropolitan statistical area requirements are 
needed for the Census which will take place in 2000.
    To the letter of the law, Ulster County has and may always 
have difficulty in meeting the current requirements as they 
presently exist, yet the county has a population of more than 
165,000, a population as much as 150 percent higher than other 
MSAs. In the spirit of the law, I believe Ulster County and 
other counties represented here deserve to be qualified for MSA 
status.
    We clearly have a community of interest surrounding our 
primary city, the county seat, Kingston. Kingston, New York, is 
the center of commercial, civic, and cultural activity in this 
area. The fact that the natural growth of the city's 
surrounding population clusters is slightly farther away than 
in other parts of the county should not preclude the county 
from MSA status and the benefits that flow from that 
designation.
    The bottom line is that any Census regulations of this kind 
are arbitrary and, I think, need more flexibility, Mr. 
Chairman, than they currently have. As my colleagues and I have 
explained, there are communities across this country that 
deserve this designation, but are precluded from it due to 
their own unique characteristics.
    Without some flexibility in the regulation, the Census is 
also precluding these communities from certain economic 
development advantages. I realize that economic development was 
never the intent of the MSA status, MSA status was never 
designed to help promote economic development, but in practice, 
MSA status is an important tool frequently used by the private 
sector in making a variety of economic decisions. Changes to 
the Census regulations are sorely needed to ensure that these 
communities can compete with counties of comparable size. We 
request Census regulations be changed to allow counties with 
populations of at least 100,000 people to be designated as 
metropolitan statistical areas.
    Again, Mr. Chairman, I just want to personally thank you 
for your attention to this issue. It is one that is important 
to a large number of the people that I represent, and I think 
that the committee has before it a number of reasons why this 
designation ought to be changed. And I hope and know, as I know 
you, Mr. Chairman, that it will get your careful and 
considerate deliberation; and I thank you very much.
    [The prepared statement of Hon. Maurice D. Hinchey 
follows:]



    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    Mr. Horn. Well, we thank all five of you for testifying.
    We are joined by the ranking minority member on the 
committee, Mrs. Maloney. Do you have any comments?
    Mrs. Maloney. I congratulate all of my colleagues for 
coming forward. Mr. Hinchey from the great State of New York, 
you put forward a very forceful testimony and I look forward to 
the other remarks. Thank you.
    I ask that my opening remarks be put in the record as read.
    Mr. Horn. They will be without objection.
    [The prepared statements of Hon. Carolyn B. Maloney and 
Hon. Danny K. Davis follow:]



    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    Mr. Horn. Mr. Sununu.
    Mr. Sununu. I have no opening statement, Mr. Chairman. I 
certainly appreciate the testimony that has been presented 
here, and I look forward to the testimony from Ms. Katzen as 
well.
    Thank you.
    Mrs. Maloney. May I just ask one question? Very briefly, 
could you just go down the line and just answer one question. 
What do you see your communities gaining if they are designated 
metropolitan areas? In just a brief answer, what would you gain 
if you were designated one?
    Mr. Holden. Mrs. Maloney, I believe that the gain that 
would come from the Federal Government directly would be 
minimal. I think there might be some changes in reimbursement 
to health care providers, but I think the gain from the private 
sector, the investment and economic development, is what our 
communities would gain.
    Mrs. Mink. I think my response would be the same. I don't 
think that there are large potential Federal grants. There 
might be a few at HUD in CDBG and programs like that, but, 
basically it is being listed as a significant area for 
potential development, and my two counties that are affected 
would be, I think, dramatically assisted if they were included 
in this designation.
    Thank you.
    Mr. Hinchey. Mrs. Maloney, I agree with my colleagues that 
there would not be any significant alteration of relationships 
between these communities and the Federal Government in any 
really material way. However, there are benefits which would 
flow to the communities as a result of MSA designation, as a 
result of their interaction with the private sector.
    A number of major economic entities in the private sector 
base decisions about locations and various things of that 
nature--advertising--on the designation of MSAs. They will, for 
example, routinely consult the directory of metropolitan 
statistical areas, and they will focus their attention on those 
MSAs. If you live in a community that is not designated as an 
MSA, therefore, you do not get that attention and the economic 
benefits that flow from it.
    Now, if you happen to live in a community such as the one 
that I described, which is a very old community, settled really 
back in the 17th century in some cases, even in the 16th 
century, and you have municipalities that were incorporated in 
the 18th century, then you find that the arbitrary requirements 
that are laid out for MSAs--and I don't mean that in a 
derogatory way; arbitrary in the sense that you could pick any 
number of criteria and use them--these criteria simply do not 
favor old, established communities. Therefore, this particular 
area that I represent finds itself at an economic disadvantage 
vis-a-vis other communities in other parts of the country.
    So it is really an issue, I think, of fairness and justice 
and equanimity that we are asking you to address here.
    Mrs. Maloney. Is it sufficient to wait until the 2000 
Census to make these changes, or should they be made 
beforehand? I'll just add another question to it.
    Mr. Hinchey. Well, I would just say, the sooner, the 
better. But I addressed my remarks to the centering around the 
2000 Census because that is the next convenient time when these 
changes could be made.
    Mr. Hunter. I think Mr. Hinchey has walked through this 
pretty effectively. An MSA is a standard of economic focus, if 
you will. And when people are making decisions for advertising, 
business expansion, and other areas of economic development, 
they say, show us the MSAs; bring the MSAs, for example, in 
southern California or bring the MSAs in New York or wherever. 
If you are not an MSA, you are not a focus; you are not 
identified as an area where there are lots of people that want 
to buy lots of things or do lots of business. And so you are a 
blank spot, if you will, on the map for a lot of large 
businesses and advertisers.
    Mr. Redmond. San Juan County is the only county in my 
entire district that will benefit from this and we have on the 
Navajo reservation between 30 and 40 percent unemployment and 
some of the most dismal poverty statistics in the Nation. And 
the city of Farmington is what is referred to as a border town 
because it borders the reservation.
    Basically, this is going to make a correction in the data. 
The region is large enough population-wise to be qualified for 
an MSA because of the amount of people that are there, even 
though the epicenter itself does not have the required number 
of people. The city of Farmington on a weekend will swell to 
over 100,000 people as Native Americans come off the 
reservation to do marketing, but when you actually count 
residents, we don't have the population base necessary to 
become an MSA.
    I think that as far as economic development goes, many of 
the young Native American people that are able to get a college 
education--they end up finding they have to leave the community 
and separate themselves from their families. If we can become a 
focus for economic development, as Congressman Hunter, has 
said, we will be able to keep the Navajo culture more intact 
and keep Navajo families intact. So there is not only an 
economic side to it; there is a cultural, familial side to this 
that we will benefit from.
    Mr. Horn. Mr. Redmond, does your district already include 
all of the Navajo reservation?
    Mr. Redmond. No, the Navajo reservation is spread over 
three States, and I'm not familiar with the border towns on the 
Arizona side or on the Utah side.
    Mr. Horn. I am thinking of the Navajo reservation as in New 
Mexico. You have all of it?
    Mr. Redmond. Yes.
    Mr. Horn. Because it is the size of the State of West 
Virginia. And I remember holding a hearing there when I was 
vice chairman of the U.S. Commission on Civil Rights and in 
1973 there were 136,000 members of the tribe. I don't know what 
it is now.
    Mr. Redmond. It is the largest Native American tribe in the 
Nation.
    Mr. Horn. But you are absolutely right on the unemployment 
situation there. A lot of work needs to be done.
    Mr. Redmond. Farmington is a border town that, on a 
weekend, when people come to town to do business the town 
swells to over 100,000 people and that is just a variable. It 
is not accounted for in the current formula.
    Mr. Horn. In terms of my own bias in this, I think you have 
a real point on what you say. I think our problem is that the 
Federal Government does not usually recognize the tremendous 
use that is made of certain types of Federal actions in terms 
of the private sector.
    The ZIP Code, which is under the administration of the U.S. 
Postal Service, is a good example. I have been working for 3 
years to try to get a city of 9,000 within my district that is 
completely surrounded by the second largest city in Los Angeles 
County, and we cannot get it because three ZIP Codes come out 
of the inner city of the largest city that completely distort 
the city of Signal Hill.
    So I am very sympathetic to what you are talking about, and 
I think Federal officials are going to have to realize, and 
Congress who authorizes this, that when we authorize certain 
types of choices in terms of statistical data, they are used 
for other reasons than the Federal Government might have 
collected them. However, that's the reality and we need to be 
in touch with reality, and so I think you made a very good 
case.
    I would extend to you the invitation, since this hearing 
won't be that long--we have essentially three more witnesses, 
but the principal one is the administrator of the Office of 
Information and Regulatory Affairs, the very able Sally Katzen; 
she will be up next. If you would like to stay, we will have a 
dialog here.
    I believe that putting the witnesses--as she knows--that 
have something they want to do with the Federal official that 
can do it, or not do it, and getting closure on these things. 
So if you would like to stay around, you are welcome. We will 
make room for Mrs. Katzen and her two bright assistants that 
are in this area.
    So we can swear you in. She lives up here; we built a room 
for Mrs. Katzen, our witness Friday and this afternoon.
    Mr. Holden. I have some other records that I would like to 
submit for the record.
    Mr. Horn. Without objection, they will be included at this 
point.
    You know the routine, and have Mrs. Wallman and Mr. 
Fitzsimmons join you.
    [Witnesses sworn.]
    Mr. Horn. The clerk will note that all three witnesses have 
affirmed. We are glad to see you again, and we will be glad to 
see you again this afternoon.

STATEMENT OF SALLY KATZEN, ADMINISTRATOR, OFFICE OF INFORMATION 
    AND REGULATORY AFFAIRS, OFFICE OF MANAGEMENT AND BUDGET

    Ms. Katzen. It is a pleasure, as always, to be here.
    Mr. Horn. You are a very good witness.
    Ms. Katzen. Mr. Chairman and members of the subcommittee, I 
appreciate the opportunity to appear before you today to 
discuss the metropolitan areas program. I am accompanied today 
by Katherine Wallman on my left, who is the Chief Statistician 
of the United States. She is the head of the statistical policy 
branch of the Office of Information and Regulatory Affairs at 
the Office of Management and Budget. On my right is James 
Fitzsimmons, who is the chief of the population distribution 
branch, Bureau of the Census, who leads much of our 
metropolitan areas work on behalf of the Federal statistical 
system.
    As you know, I have a lengthy written statement that goes 
into a lot of detail, and I would request that that be 
incorporated in the record at the appropriate place.
    Mr. Horn. It will be automatically done.
    Ms. Katzen. Let me try to summarize what I think are the 
more salient points of that statement during this brief oral 
testimony.
    I believe that the official metropolitan areas program is a 
success story, a statistical success story that is now nearly 
50 years old. Shortly after World War II, it became clear that 
the value of data produced at the metropolitan level by the 
Federal Government agencies would be greatly enhanced if the 
agencies used a single set of definitions for the Nation's 
metropolitan areas. This is a concept that appears in a number 
of our statistical projects, and consistency among Federal 
agencies is desirable.
    The predecessor of OMB, the Bureau of the Budget, led the 
effort to develop standard metropolitan areas in time for their 
use in the 1950 decennial census. The purpose of the 
metropolitan areas is the same today as it was when they were 
first defined. The classification provides a nationally 
consistent set of definitions for collecting, tabulating, and 
publishing Federal statistics.
    Stated differently, OMB establishes and maintains 
metropolitan areas solely for statistical purposes; and in 
reviewing and revising metropolitan areas, OMB does not take 
into account or attempt to anticipate any public or private 
sector nonstatistical uses that may be made of the definitions.
    Now, while the basic concept has remained the same since 
the end of World War II, there have been changes in the 
standards themselves. They are reviewed and revised preceding 
each decennial census, so we are currently entering the period 
when this work must be undertaken to complete the standards 
that will be employed in the first decade of the 21st century. 
Periodic review of the standards is necessary to ensure their 
continued utility and to be certain that area definitions can 
be implemented using criteria that are both relevant and 
measurable.
    The definition of metropolitan areas is a function of 
applying the standards selected to the data that are produced 
by the Census Bureau. This process takes place on a 
comprehensive basis each 10-year period after the new 
population, commuting, and other data are available from the 
decennial census. It is relatively straightforward process of 
applying existing standards to the data. It is not a matter of 
submitting a request for designation or otherwise applying, if 
you will, for permission to call yourself an MSA or appealing 
to the exercise of discretion. We simply take the standards and 
apply them to the data.
    We do this during the intercensal years as well. Typically, 
this occurs when there is a change in the populations, which 
are data that are made available to us. These data are used 
along with the commuting data from the previous decennial 
census because that is not updated in the intercensal years. 
Typically, this annual process will produce one or two new 
metropolitan areas, and OMB issues a bulletin on or around June 
30th of each year indicating whether there are new or reused 
metropolitan areas. There was no such bulletin in 1997 because 
there were no metropolitan area changes as a result of the 
application of existing standards to the newest data.
    The concept of a metropolitan area is that of a core area, 
consisting of a large population nucleus, together with 
adjacent communities that have a high degree of integration 
with that core. That is a concept to which I will continually 
return as we discuss these standards, because what it says is 
that a metropolitan area has a core and that the outlying areas 
are related to that core.
    Metropolitan areas themselves are of three types. One, 
metropolitan statistical areas, which are known as MSAs; two, 
consolidated metropolitan statistical areas, CMSAs; and three, 
primary metropolitan statistical areas, PMSAs. The bases for 
types of areas and the numbers of them are set forth in my 
written statement.
    While there are permutations and variations, again, I want 
to emphasize the basic concept is a central city and the county 
or counties in which it is located, together with outlying 
counties if they have enough commuting to the central counties 
and meet other criteria. It is also important to remember that 
the geographic units used in defining metropolitan areas are, 
for the most part, political areas established under State and 
local laws.
    Having heard the previous panel, I would note that there is 
substantial discretion available at the local level for 
defining the boundaries of various counties, and this has both 
pluses and minuses for our program. A county could be drawn to 
be very, very large and could pick up huge tracts of land with 
different degrees of population density. Or in the case that we 
heard from Mr. Hinchey of New York, local communities have the 
option of local annexation to increase the size of some of 
their boundaries; and local annexation is not an infrequent 
occurrence. Stated another way, there is a certain amount of 
discretion at the State and local level which then gets 
incorporated because we use, for the most part, that data for 
our standards.
    The other issue that was discussed by the preceding panel 
is the uses of metropolitan areas. As I mentioned, OMB 
establishes the metropolitan area designations for statistical 
purposes only. We recognize that some agencies use the areas 
for a variety of nonstatistical purposes, including 
determinations about eligibility and benefit levels in certain 
Federal Government programs. In some instances, that is the 
result of legislation in which Congress chose to incorporate 
the metropolitan area definition in the authorization of the 
program activities for the agency.
    There may be other instances where a Federal Government 
agency elects to use metropolitan areas in a nonstatistical 
program, and if so, it is then, in our view, the agency's 
responsibility to ensure that the definitions are appropriate 
for that use. In addition, as the chairman noted, it is quite 
frequently the case that what is done for Federal purposes is 
then used in some way by the private sector.
    In reality, we recognize that there are many private sector 
uses of metropolitan area definitions. For example, the areas 
are ranked by population size and used for market analysis and 
advertising purposes. I would note that OMB has no control over 
the use to which this standard is put by the private sector, 
nor the appropriateness of the use.
    Finally, there was a question about the timing of changes 
that should or could occur. As I mentioned at the outset, there 
has been traditionally a review of the metropolitan area 
standards preceding each decennial census. We are now 2\1/2\ 
years before Census 2000, and therefore we have already begun 
the work of reviewing the metropolitan area standards to 
determine whether they are appropriate or require changes at 
the beginning of the next century.
    While I cannot predict what aspects will be revised, I can 
tell you that the review will be comprehensive, thorough, and 
open-minded. We have already begun to explore some of the 
issues. The Census Bureau has entered into contracts with four 
universities to explore some of the subject matters and it held 
an open conference in November 1995, attended by 
representatives of Federal, State, and local government 
agencies and the private sector.
    The conference participants identified a number of issues 
which they thought were important to review in the next 2\1/2\ 
years: whether the Federal Government should define 
metropolitan/non-metropolitan areas; the geographic units to be 
used in defining those areas; the criteria to be used to 
aggregate the units in defining statistical areas; whether 
there should be hierarchies or multiple sets of areas in the 
classification system; the kinds of entities that would receive 
official recognition in the new system; whether a system should 
reflect statistical rules only or allow a role for local 
opinion; the frequency of updating; and territorial coverage.
    Now, at the conference, there was some agreement--indeed, 
in some instances, substantial agreement--on some of the 
points. First, there was substantial agreement that the Federal 
Government should indeed define standard areas at the 
metropolitan and nonmetropolitan level. While many people now 
have the means to define areas for their own purposes, thanks 
to computers and a wealth of geographic information system 
software, areas defined by the Federal Government still offer 
the advantages of comparability to a wide community of users.
    Second, there was agreement at the conference that there 
should be areas defined using the county as the fundamental 
unit because of data availability and familiarity. There was 
also support for areas based on smaller units. Although some 
suggested 5-digit ZIP Code areas, others favored census tracts 
and others favored minor civil divisions. These are areas which 
we will be exploring. Most individuals at the conference 
regarded commuting data from the decennial census as the best 
measure to determine the extent of the areas, but other sources 
of information were identified and are worthy of being 
reviewed.
    There was also strong agreement that statistical areas 
defined following the next Census should cover the entire area 
of our country, and that the areas could better account for the 
components of the continuum of settlement than do the current 
metropolitan areas and their nonmetropolitan residual concept 
that is used.
    Moving from the work that has already been done in the 
conference to getting a revised set of standards in place 
before Census 2000 is the task that we face for the next 2\1/2\ 
years. It is, we believe, a challenging assignment. In addition 
to the research and testing that must be undertaken to explore 
suggested alternatives, this period will feature periodic 
solicitation of public comment and responses to the views that 
are expressed.
    I want to underscore that there will be substantial 
opportunities for public comment as we proceed over the next 
few years. The proposed metropolitan area standards review 
project schedule provides for the first solicitation of public 
comment in November 1998, following a year-long program of 
research and evaluation that we are now beginning. At that 
point, new standards will not have been drafted. We will seek 
views on proposed options. A second solicitation of public 
opinion will take place in July 1999, following preparation of 
draft standards. And we plan to conduct at that point at least 
one public hearing.
    I can tell you now that OMB is committed to a thorough, 
open review of the metropolitan area standards, and that we 
will consider all subjects that have been and will be raised 
because such a review is critical for the public and private 
data users in the first decade of the new millennium.
    I am happy to answer any questions from the Members or my 
new panel members.
    [The prepared statement of Ms. Katzen follows:]




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    Mr. Horn. Well, we thank you.
    Mr. Sununu, do you have any questions?
    OK, Mrs. Maloney?
    Let me ask you one question here on that commuting 
standard. It is commuting in one direction, as I recall it; is 
that correct?
    Ms. Katzen. The concept, you will remember, is a central 
area with outlying areas that are integrated with it. So you 
would like to see whether a county has commuting to a 
particular central city. There are instances where there will 
be commuting to several different identified metropolitan 
areas, and that's actually one of the roles of local opinion, 
which is to see whether a county with commuting to two or three 
places wants to be part of one or the other of the metropolitan 
areas.
    Mr. Horn. Well, you certainly see that in California. In 
urban California, you've got a 360-degree commuting area with 
most cases.
    Mr. Fitzsimmons. Local opinion comes into play if there is 
approximately equal and qualifying commuting to more than one 
metropolitan area.
    Mr. Horn. I don't see what local opinion has to do with it. 
It seems to me that local behavior is what matters, not 
opinion. Where did the opinion bit come in?
    Mr. Fitzsimmons. Well, local behavior is taken into account 
in the actual commuting patterns. If a county is qualified 
based on commuting patterns they have--if qualified to be in a 
metropolitan area, but it qualifies in two different 
metropolitan areas at the same strength, essentially then OMB 
solicits local opinion as to which one it wants to go to.
    Ms. Katzen. I should note that our solicitation of local 
opinion is done through contacts to the congressional 
delegations. We do not go out and do sample surveys in the 
local areas but rather contact the congressional delegations 
that are affected. As Jim was mentioning, this is done where 
there are, in effect, two equal choices; rather than having OMB 
arbitrarily assign a particular outlying county to one area 
rather than the other, where the county qualifies for both, we 
seek congressional guidance in the form of local opinion.
    Mr. Horn. There are two simple ways that most States can 
give you the data, and one is obviously a ZIP Code analysis of 
the employees in the surrounding area as to, where do their 
employees live. In southern California people think nothing of 
driving a 140-mile round trip to hold a job in Long Beach, CA. 
They come from Riverside, San Bernardino by the hundreds, by 
the thousands, and that is certainly one way to get it.
    The other is the State Department of Highways, CalTrans in 
our case. You can see the flow moving in a certain direction in 
traditional working hours and make certain judgments about 
where traffic from point A is going to point B. This kind of 
thing. And it seems to me there is a way to get these data.
    But what concerns me is when you say these data are solely 
for statistical purposes, I don't think that's right. These 
data are to analyze what is happening in America and when you 
see their use by the private sector, it seems to me we should 
just recognize reality.
    Mr. Holden, do you want to ask some questions?
    Mr. Holden. Thank you, Mr. Chairman.
    First, Ms. Katzen, I would like to thank you for your 
testimony and you and Dr. Fitzsimmons for your attention to 
this issue. You have been very helpful to me as I have been 
trying to explain to my constituents what hurdles we need to go 
over to be recognized as a metropolitan statistical area. And I 
know that you are in the process of promulgating your 
regulations for the next Census, and I know that you are going 
to be taking into consideration all the testimony that we have 
presented today and all of the correspondence that we have sent 
on to you.
    I would just like to take this opportunity again to 
reiterate some of the problems I think occurred in 1990 
regulations. And that is, I understand the need for uniformity, 
to have standards throughout the country; however, we are a 
large Nation and our geography is different and there are areas 
where it is impossible, in my opinion, to use the same 
standards in Pennsylvania as in California. And I would ask to 
you consider that again as you are promulgating your 
regulations for 2000.
    Also, on the commuting factor, I believe that the 
designation of an MSA area for a county commuting 15 percent of 
the population benefits the commuting county, not the county 
receiving the commuters. So, therefore, when counties have an 
excess of 15 percent, such as Schuylkill County where we have 
22 percent, I would ask you to take into consideration that the 
eastern part of the country is crowded. Our population areas 
are close together, and there are many areas where the people 
commute to different areas adjacent to their home county; so I 
would ask you to consider those also. I know that we have 
talked about this before.
    Ms. Katzen. I would note, as I think the chairman knows, 
that I was originally born and raised in Pittsburgh, and 
therefore have some familiarity with the problems of strip 
mining and other activities in Pennsylvania generally.
    I appreciate your understanding of the need for uniformity. 
And I was struck by the fact that all the members of the 
preceding panel acknowledged the role of standards and 
recognized that there is a need for some consistency. How they 
are applied is the issue that we are grappling with.
    The other point that I would just like to make is that 
there is a sliding scale in determining whether an outlying 
county would be part of an MSA. The greater the amount of 
commuting, the lesser the amount of population density 
required. So we do try to adjust for some of those factors. But 
I think, as you have mentioned, there are other considerations 
that we will be looking at as well. We have appreciated very 
much the support that we have had from Members of Congress and 
we expect to be in touch with a number of them over the next 
2\1/2\ years to be able to work with them as we go through the 
process of reviewing the standards.
    So I thank you also for your help.
    Mr. Holden. And I believe you have answered this question, 
but maybe just clarify it for the record.
    I gather this information is purely for statistical 
reasons; there was never any budgetary consideration given that 
would affect HCFA reimbursement or HUD reimbursement. Is that 
what you said in your testimony?
    Ms. Katzen. That is correct. We do it for statistical 
purposes. There are some Federal agencies that use these areas 
because of legislation. And I think HCFA and HUD are two of 
those for which Congress has incorporated the concept of 
metropolitan areas into their statutory requirements.
    During my tenure at OMB, Leon Panetta, who was then the 
Director of OMB, sent a memorandum to the heads of departments 
and agencies reminding them that if they used these standards 
or they used these areas in their programs without a 
legislative mandate, it is their responsibility to assure that 
those standards are appropriate for the purposes for which they 
are using them, and offered the assistance of our office to 
consult with them.
    We have been in touch with some of the agencies on some of 
the issues, and I'm happy to give you a copy of that memorandum 
as well.
    Mr. Holden. Thank you.
    [The information referred to follows:]



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    Mr. Horn. Mr. Hunter, do you have any questions?
    Mr. Hunter. Yes, thank you, Mr. Chairman.
    And thanks for being here, testifying, and letting us be on 
the panel here with you. How many MSAs are there, just 
generally?
    Ms. Katzen. 278 metropolitan areas. This information is in 
my written testimony.
    Mr. Hunter. OK.
    Ms. Katzen. --277. I'm sorry; I am off by one. There are 
277 separate metropolitan areas in the United States and Puerto 
Rico; 258 are MSAs, 19 are CMSAs, and within the 19 CMSAs, 
there are 76 PMSAs that are identified.
    Mr. Hunter. OK. Thank you. I think you made my point in 
your answer.
    We are talking about 12 counties that, were the contiguity 
requirement not in place, would be MSAs. What is interesting I 
think about this problem is that this is a classic problem 
where you have something which is precise, which is numbers, 
statistics, that is integrated with something which isn't 
precise, which is vague definitions, theories, and ideas. I'm 
looking at the idea of a core area with highly integrated 
satellites.
    Who defines what is a highly integrated satellite. In 
thinking about that, I think about Imperial County in my 
district. Imperial County is highly removed from any other 
population center. If you get in your car in San Diego, you 
drive 120 miles to get to the population in Imperial County. 
Yet the three major communities, starting with Brawley, drive 
another 10 or 15 miles to the south, you see Imperial, another 
5 miles and you're in El Centro. Because there's a few acres of 
farmland in between these three areas, which are just a few 
miles apart, they're considered, ``not contiguous.'' Yet the 
people that live in those counties, in those communities within 
Imperial County, because we are so far removed from any other 
population center in southern California, are much closer in 
terms of business relationships, social relationships, and 
every other type of relationship than people, for example, who 
would live in the city of San Diego's metropolitan area--Chula 
Vista and National City--where they are literally right next 
door. But because they are in a huge metropolitan area have 
very little integration with the guy that lives five blocks 
down the street.
    So the question is, isn't it kind of arbitrary? If those 
two pictures on the wall are Brawley and El Centro and they're 
15 miles apart, the mere fact that you don't have a couple of 
subdivisions making it contiguous, is that really a function of 
science and higher thinking, or is it just kind of a result of 
a bureaucracy that doesn't recognize people? Because in the 
end, in a 100,000-person county, you have got 100,000 people. 
Why is that contiguity so critical?
    Ms. Katzen. You raise a very interesting dilemma there, 
which I would like to address somewhat indirectly. The issue 
for some of these counties is not so much whether they are 
highly integrated or contiguous, but whether there is a central 
city or central core to which they are, in effect, attached--
whether there is a ``there'' there in the core concept.
    I say that because there is absolutely nothing wrong with 
sprawling communities that have a strong sense of community. 
Indeed, many would say that that is the American way. But the 
concept of a metropolitan area is one that starts with the 
concept of a core city, and it is the outlying areas that are 
attached to it. If there are a number of outlying areas but 
there is no central city, there is no central metropolitan 
area, and it would not satisfy the concept of metropolitan 
area.
    Mr. Hunter. I guess that's my point. Though, I think that's 
a distinction without a meaning. I mean, what does that mean? 
Does that mean that you don't have a central metropolitan opera 
or you don't have a central police station? If you have three 
separate but equal communities that are divided by a few acres 
of farmland that aren't in a circle as a core, but they're on a 
linear strip because of the way that the particular geography 
and economic operation of that community happens to be, what's 
the difference? You have still got 100,000 buyers. You still 
have 100,000 shoppers. You still have 100,000 workers. You 
still have 100,000 homeowners.
    Why is the concept of a core or a circle--maybe that comes 
from Washington, DC, where everything spreads out from the 
Capitol, and you have this wheel and the hub and the spokes 
that go around it. But in terms of people and the impact of 
their lives on one another, they don't have to live in a circle 
or a core.
    Ms. Katzen. There is nothing magical----
    Mr. Hunter. Just a little argument.
    Ms. Katzen. That's all right. This is important.
    There is nothing magical about the configuration, whether 
it be a circle or a triangle or a square.
    Mr. Hunter. What does ``core'' mean?
    Ms. Katzen. Core is something that is focused, a 
metropolitan urban center that, by the local definition, is a 
city, town, or county. Now, you know----
    Mr. Hunter. Let's go beyond an arbitrary political 
subdivision. What is a focus?
    Ms. Katzen. Regrettably, once one goes beyond the 
standards, one is potentially on a slippery slope. Let me just 
say, I am trying to defend----
    Mr. Hunter. What we are talking about is whether or not the 
standard is arbitrary. I agree that you have got to have 
standards. I think Tim is, too.
    Ms. Katzen. I am in a position now where we are undertaking 
a review, and we will be looking at the various recommendations 
and suggestions, exploring them both on a public comment basis 
and on a research basis. And I no more want to say, what is 
here cannot be changed, than to say, now we are going to change 
it this way. So my comments are intended to describe what we 
are doing, and to give you the best explanation that I can of 
how we have gotten to this particular point, and to engage in a 
discussion which should not, I hope, be viewed as my being 
negative or affirmative on any particular point.
    On the substance, I think it is important to recognize--and 
several of the panel members and you have--that where you have 
some precision, if you say 15 percent, well, what if it is 14 
percent? What if it is 13 percent? What if it is 12, 11, 10? 
Regrettably, there are times when we have standards, and 
departures from those standards may appear to be arbitrary. 
They may also give meaning to the application of those 
standards. And it is an issue that we have to wrestle with, 
just as we have to wrestle with the chairman's issue of the 
private sector uses of these, even though we do not design them 
for the private sector.
    But once you acknowledge that there are standards and once 
you acknowledge you are talking about 100,000 as the population 
of an urbanized area, what if I have, then, some Congressman or 
other person comes to me and says, ``OK, I have an urbanized 
area that has 98,000, and I have got one that has 96,000, and I 
have one that has 94,000?''
    Mr. Hunter. At least at this point you are talking about 
truth in advertising, because then if you change an MSA to say 
that it is now going to be 95,000 or more, when an advertiser 
says, bring me the MSAs, he knows that when he gets that MSA, 
there is 95,000 out there.
    We have counties that have over 100,000 people. So they 
have as many counties as all the other MSAs. They are not 
pulled from the MSA files because they're shaped wrong, the 
communities in them are shaped wrong, and there is some blurry 
and vague idea that can best be done with hand gestures about a 
core that we haven't met. And I would submit that in all 
matters logical, we do meet that.
    So we want to be more precise than I think you folks do 
because we actually want to go on numbers, real numbers. We 
think that the standard, logical, nonarbitrary number is to use 
the population of a county which is 100,000 folks. So I 
understand you have got--Mr. Chairman, thank you for letting us 
indulge in this, and thanks for suffering us here.
    But I guess my last question would be, is there any logic 
in having this contiguity requirement, which often it is simply 
a function of who's got the strip malls or housing developments 
that follow down this--generally it's usually a freeway or a 
main street or the throat of a particular community to link 
them together as opposed to cases where you don't have 
contiguity simply because you have farmland or mines in 
between.
    Is there any logic there when you have the same number of 
people?
    Ms. Katzen. Again, I would have to say that based on the 
current standards, the concept of a----
    Mr. Hunter. But is there logic in the standard?
    Ms. Katzen. I believe there has been and that it has well 
served the Federal Government and the State and local 
governments who use this information. You speak about 
advertising and truth in advertising, which I wholeheartedly 
support. Metropolitan statistical areas were designed and 
developed so that we could gather data about education levels, 
income, poverty, housing, other statistical information, 
aggregate information on a comparable basis----
    Mr. Hunter. And the county gives you on that.
    Ms. Katzen [continuing]. To determine for those areas that 
qualify as metropolitan areas and those that are not so 
defined. That may or may not be the best, in some platonic 
sense or altruistic sense, gathering of data or use of data, 
but it is the purpose for which they have been undertaken for 
the last half century. We will be looking at whether that is 
the approach that we should be pursuing in the next 2\1/2\ 
years, and I hear very clearly there are strong sentiments that 
we must broaden our horizons as we do our work.
    Mr. Holden. If I could just followup, Mr. Chairman. Thank 
you for your indulgence. You talked about the core population. 
I would just say that Schuylkill County we have the city of 
Pottsville, the only city in the county. It is where the county 
government sits. It is where two major hospitals are located. 
It is absolutely the center of commerce in Schuylkill County. 
But because of the geographical barriers, we were unable to 
achieve that, and because of the need, in your opinion, to 
have, you know, national standards, I believe that maybe a set 
number for the population would be the best way to be fair in 
this matter.
    Mr. Horn. I agree with Mr. Holden on that. It is one thing 
to designate 100,000, but then to put these things arbitrarily 
that you are moving commuting in one way, I just couldn't 
believe it. You look at the growth of California, Los Angeles 
County. The second largest city in America, is the city of Los 
Angeles, 3 million people. Los Angeles County has 10 million 
people. It has 88 cities and right adjacent to it is one of the 
great postwar growth areas known as Orange County.
    The city of Costa Mesa and its shopping center takes in 
more sales tax than the whole city of San Francisco. So you 
want to talk about where people are moving in cars in Los 
Angeles and Orange County. They are going to the mall in Costa 
Mesa and they come from Beverly Hills. They come from PV, Palos 
Verdes, and all of this. Those are things that have nothing to 
do with the 50-year-old standard of the postwar where there was 
one core city around America and then suddenly freeways came 
and people said let's get out of the core city. Let's go to the 
suburbs and have a little white picket fence and green grass 
and et cetera. And we all know the story.
    Now you have urbanized areas that are way beyond the core 
city, and eventually in 50 years, you will have contiguousness 
between the city of San Diego, which Mr. Hunter comes near, and 
Los Angeles. You will have one solid urban area, and only the 
Tehachapi Mountains will prevent it from going up and taking in 
Bakersfield. A little hard to build in the Tehachapis. But you 
look at Sacramento right now, you have people from Stockton to 
Sacramento. You don't know it when you drive. The houses are 5 
miles off, but they are contiguous right up to the city of 
Sacramento and it doesn't make sense when we have a 50-year-old 
standard that isn't in keeping with the patterns that people 
are doing. Whether we like it or not, economic patterns have 
substantially changed in 50 years.
    I just thought, how many times do I go into the core city 
of Los Angeles? I don't go there more than twice a year. When I 
was not a Member of Congress, when I was there full time, I 
didn't go in there more than twice a year. I go to the airport 
and I take off in a plane, but as I have told many hearing 
panels in California, I have never even bought a newspaper in 
the airport, so what is my contribution to the city of Los 
Angeles as the core city? Zilch is my contribution to it. So I 
am very sympathetic growing up on a farm, living in urban 
America. I've seen the patterns change. That formula hasn't 
seen the patterns change.
    Ms. Katzen. I don't mean to be unsympathetic. As I said 
earlier, I felt it important to try to set forth what the 
standards are now, what they are based on, the concepts that 
they rest on, the purposes that they serve, and the uses to 
which they are put. In the next 2\1/2\ years we will have a 
chance to see whether that makes sense for the new millennium 
and we will be rethinking all aspects of it.
    One of the issues is whether the Federal Government should 
continue to define metropolitan areas. We are talking about 
metropolitan areas in the old-fashioned, if you will, concept 
of a metropolis, which means, if I have my Latin or Greek 
right, a metropolis--that is sort of a city in the, if you 
will, old-fashioned sense. And we are now talking about 
economic areas. We are talking about social areas. We are 
talking about different things which, as I said, may well be 
the American way.
    I think all of these questions could be, should be, and 
will be part of our review. But at the beginning of the review, 
when I do not want to prejudge any of the issues, I simply 
wanted to lay out the predicate for where we are now and how it 
is now functioning without prejudging the outcome.
    Mr. Horn. Yeah, obviously the simple way is take the 
critical mass of 100,000 and say, hey, you have got a lot of 
people here.
    Mr. Hunter. A whole lot of people.
    Mr. Horn. I come from San Benito County, which then had 
13,000 people and I looked the other day, it now has 40,000 
people and I think there are too many people that have come to 
that county. I want them to stay in urban America, frankly. But 
those are a lot of feelings that those of us have when we 
remember Green Mountains without houses slipping down them. Any 
other questions?
    Mr. Hunter. Mr. Chairman, thank you for indulging us, and 
Ms. Katzen, thank you for putting up with our questions here. I 
hope to work with you.
    Ms. Katzen. I look forward to that. I look forward to 
working with both of you and your colleagues as well.
    Mr. Horn. Mr. Davis, the gentleman from Illinois, do you 
have any questions?
    Mr. Davis. No, thank you, Mr. Chairman. I do have a 
statement.
    Mr. Horn. It will be put in the record as if spoken at the 
very beginning following Mrs. Maloney's.
    We thank our Members of Congress. We have another panel 
more economically oriented from the private sector that will 
show us the use of some of these data. And if you would like to 
sit with that panel, Ms. Katzen, we welcome you.
    Ms. Katzen. I am due back here at 2 o'clock, sir. I think I 
will do something else.
    Mr. Horn. We appreciate you coming here this morning. Thank 
you very much.
    All right. We are now on our last panel for the morning. 
And this will probably be the shortest hearing we have ever 
held on anything. Mr. Spar, Mr. Marshall, will come forward. We 
are in business. Gentlemen, as you know, raise your right hand.
    [Witnesses sworn.]
    Mr. Horn. Both witnesses have affirmed. Let us start with 
Mr. Ed Spar, the Executive Director of the Professional 
Association on Federal Statistics. Welcome, Mr. Spar.

     STATEMENTS OF ED SPAR, EXECUTIVE DIRECTOR, COUNCIL OF 
  PROFESSIONAL ASSOCIATIONS ON FEDERAL STATISTICS; AND ALVIN 
MARSHALL, MEMBER OF THE BOARD OF DIRECTORS, SCHUYLKILL ECONOMIC 
                       DEVELOPMENT CORP.

    Mr. Spar. Good morning, sir, I will extract from my 
testimony and request that the full testimony be put in the 
record.
    Mr. Horn. It is automatic with every witness in the record 
the minute we introduce you.
    Mr. Spar. Not that we speak with each other, but it was 
COPAFS that hosted that conference that Ms. Katzen mentioned. 
So we really do cooperate an awful lot. My comments really come 
from the private sector. Before joining COPAFS, I was president 
of a company called Market Statistics and we produced 
publications that reached over 60,000 marketing and sales 
executives around the United States.
    Metropolitan areas are certainly one of the most important 
constructs of the private sector. Companies use them to develop 
sales territories, to develop sales quotas, test new markets, 
to delineate sites for expansion, use in advertising, and on 
and on and on.
    Rankings are used as cutoff points. It is typical to see an 
advertising agency use the top 10, 25, or 50. Sales people, who 
make their livelihoods basically through commissions, 
rightfully so, believe that they know the sales territories 
best and one of the reasons that metropolitan areas is so 
important to them is that they see them as fair. They are based 
upon standards that are consistent for everyone. Essentially, 
they are areas that are not manipulated.
    I would say that metropolitan areas are more used than 
almost any other government construct. That includes Bureau of 
Economic Analysis areas, consolidated areas, and urbanized 
areas. Metropolitan areas also are the basis for almost all the 
other types of areas that the private sector creates such as 
Rand McNally trading areas and radio listening markets. Oddly 
enough, they are not used for television markets which are more 
based upon the construct of viewing and I will get back to that 
a little later. The strengths are obvious. They are a good 
measure of urban concentration. They delineate socioeconomic 
segments fairly well and from a private sector point of view, 
since you are always updating them in the private sector, they 
are good for the purpose of being able to find or because you 
can find a lot of data.
    The problems are, of course, that once you have got the 
area, they don't change over a 10-year period. The second is 
they cover the entire country. Third is when you finally do get 
a change after 10 years, they are a significant change and 
there are an awful lot of them and sort of abrupt.
    What is needed, I believe, is a better geographic 
segmentation of the metropolitan area. My first example is the 
concept of a suburb. We all talk about a suburb, but there is 
no definition of a suburb in terms of metropolitan areas. From 
a private sector point of view, what you have really got is an 
inner core. I call it an inurban. Then you have got an urban 
area, then you have got a suburban area. Then after that, what 
you consider an ex-urban area, a term I think Spectorski came 
up with in the 1950's. But it is that part that is no longer 
urban, but not really rural yet. And then finally you have the 
rural areas. You have got this sort of continuum which is 
something that you are not able to get currently from the 
metropolitan area construct.
    Because of this kind of a problem, what is happening is the 
private sector has been moving more and more away from using 
metropolitan areas, although they wouldn't like to, as I said 
this, because they are standards and they are consistent. What 
has happened is that you find that private sector companies are 
now starting to use television markets because they cover the 
entire Nation, or they use some of these rather sexy, if you 
would, constructs that have been developed by private sector 
vendors based upon clusters. And what they are, some of the 
names are kind of cutesy.
    You will find ``Shotguns and Pickup Trucks'' is one 
cluster; very descriptive. On the other side of the spectrum 
you would find something like ``Fur Coats and Stationwagons.'' 
This helps people define the area conceptually and since it 
covers the entire Nation, they are able to use them across all 
uses.
    Anyway, if I might, let me give you my Buck Rogers approach 
where I think the solutions might lie from a private sector, 
again, perspective. I think the entire Nation should be 
covered. I think how it should be covered is by building 
blocks. You startup from block groups or tracts or ZIP Codes. I 
don't think you should abandon the county, but the county 
should be constructed as you move your way up. This would allow 
you, if you think of it conceptually, think of it conceptually, 
to think about it as concentric circles. They are not really 
circles, obviously, but you have this inner core and then it 
goes on and on and on. So finally what you have got essentially 
is the whole Nation covered by a whole series of areas. I 
almost see them in terms of their being in conflict with each 
other.
    The other suggestion, I think, coming out of the private 
sector is that they have to be updated annually. There is just 
too much that goes on. We have heard testimony there is so much 
that goes on right now that to have an area updated once every 
10 years doesn't make any sense. You've got to have it so that 
a county or perhaps even a piece of a county--well, no, I think 
you have to keep the county concept whole, but a county could 
move from one area to another area based upon how things have 
changed. Put another way, essentially what I see is a set of 
dynamic areas which would enable the private sector to see how 
flows take place.
    Finally, I think there could be a stronger working 
relationship between the public and the private sector. I don't 
have a clue how this would necessarily work right now. 
Obviously, the standards that the Federal Government have have 
to be extremely strict, but I do believe they could make better 
use of the geographic information technology, the demographic 
updating technology that the private sector has developed. 
Again, this is something that would have to be worked out.
    What I am not suggesting is that the private sector create 
metropolitan areas. That would be about the worst thing that 
could happen. One, obviously nobody would want to do it. But 
second of all, without the standard, if you would, this 
official standard, then this whole problem of something that is 
comparable for everybody that you could rely upon, that would 
be lost.
    I certainly want to compliment OMB, who over the years, 
have produced absolutely great work and they have been very 
open about this process. Also, I think the Census Bureau whose 
task it is to go through the rigorous intellectual work to get 
this done must be complimented for their work. This has been a 
very open and cooperative process. And although the private 
sector grumbles an awful lot about it, I want to assure you 
that they're grateful. Thank you, sir.
    [The prepared statement of Mr. Spar follows:]



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    Mr. Horn. We thank you, and now we have Mr. Marshall. A 
member of the board of directors of the Schuylkill Economic 
Development Corp.
    Mr. Marshall. Good morning, Chairman Horn, members of the 
committee, Members of Congress, and ladies and gentlemen of the 
audience. I live and work in Schuylkill County, PA. I happen to 
be the former chairman and I am presently a board member, as 
you mentioned, of the Schuylkill Economic Development Corp., 
which is our local industrial development agency. I am also the 
chairman of the MSA Community Fairness Coalition.
    I am here today on behalf of all of the members of 
Schuylkill County, who live in Schuylkill County and want to 
thank you very much for holding this hearing and to give us the 
opportunity to present our views of Schuylkill County on the 
importance of gaining MSA status and on the criteria that we 
believe are unfortunately most unfair in precluding county 
communities such as Schuylkill County from attaining MSA 
status. Even though we exceed the minimum population 
requirements as currently designated, we are still nevertheless 
precluded from achieving MSA status.
    Schuylkill County, as you heard, is a county of 153,000 
people. We are located on the southern boundary of the 
Pennsylvania anthracite region. We are also located midway 
between Philadelphia and Harrisburg, and we lie 50 miles from 
Allentown and Reading. All of those communities are MSAs.
    Our community has worked extremely hard and admittedly has 
been relatively successful in rebuilding the local economy of 
Schuylkill County from what at one time was a 22 percent 
unemployment level in the early 1960's, after the decline of 
the anthracite coal industry. Today, proudly, our unemployment 
stands at 8 percent, but that's still not enough. We are still 
trying and we have been successful in attracting industries, 
including some major Fortune 500 companies to locate plants in 
our community, but we still find ourselves with an ongoing need 
to create additional jobs to make our unemployment level closer 
to State and national levels which are below 8 percent.
    We also continue to strive to get our average wage rates 
higher so that more of our constituents can enjoy better 
schools, better living conditions, and a better quality of life 
in general.
    As we compete in the national and international marketplace 
for new jobs and for job retention, we continue to find 
ourselves at a definite competitive disadvantage because of our 
inability to obtain MSA status. Even though our community is 
significantly larger than a number of communities that already 
have MSA status, because of the current criteria that requires 
the contiguous core population of 50,000, which you have heard 
so much about this morning, and based on what we consider to be 
unfair developmental land standards, or again because of this 
need to have a 15 percent commutation pattern of workers to one 
single destination, Schuylkill County has been unfairly 
precluded from satisfying current MSA standards or the 
application of those standards.
    This has resulted in what I call a competitive 
disadvantage. I previously mentioned the efforts of our 
community that we have made over the last 40 years to 
reconstruct our local economy. Our degree of success has been 
the result of a truly public-private partnership between local 
investment--and I might add the workers themselves have 
contributed to local industrial community drives to create new 
plants and new jobs. In fact, we have local job-creating pools 
through State, county, and Federal agency grants and we have 
also benefited, frankly, from low-interest loans that financed 
the renaissance.
    Despite all of these efforts, during the most recent years, 
it has become readily apparent that without MSA status it is 
exceedingly difficult if not truly impossible for Schuylkill 
County to recruit good paying jobs to the area we live in.
    That old adage, ``If you build it, they will come,'' may be 
good for Hollywood, but it doesn't necessarily apply to 
Schuylkill County and our revitalization efforts. We are one of 
those communities that are surrounded by MSAs to which 22 
percent of our people commute every day, but not 15 percent in 
one direction. And that's why we have been hurt terribly, we 
believe, by the failure to achieve MSA status.
    The significance of MSA status, you have heard today in the 
private sector, is most important. I would point out two 
communities, if I may, that achieved MSA status in the 1990 
census and the results that we are aware of to those 
communities.
    Greenville, NC, is one of them. This received MSA status in 
1990 as a result of the census and they received and realized a 
significant acceleration of expansion of both national retail 
chains in and to their community. This expansion was preceded, 
I might add, by national restaurant companies that created a 
shopping and a dining environment which has been most important 
to the growth of their community. The increased data and the 
information that arises from MSA status delivers to those 
communities a method of improved planning activities and it 
allowed Greenville to present current statistics to new 
companies coming into their area to relocate there. Without MSA 
status, Schuylkill County has been denied all of these benefits 
to our definite disadvantage.
    Pocatello, ID, is another community that recently attained 
MSA status. They experienced a 20 percent increase in phone 
requests and true inquiries from companies desiring to locate 
in a new MSA area. Their experience saw the location of four 
new businesses within a very short period of time after they 
achieved MSA status, one of which was a disposable medical firm 
that expects to expand 600 manufacturing jobs in the next 3 
years. Statistical information has been more frequently 
updated, which allows the dissemination of much more current 
information to new prospects. Housing funding was increased and 
reimbursement for health care services also increased.
    We believe in good conscious that similar benefits and 
results will become available to Schuylkill County with MSA 
status, as has been achieved by Greenville and Pocatello, ID. 
It is our belief that if we attain MSA status it is critical to 
our efforts to rebuild our local economy. The current standards 
of core population and the commuter patterns simply do not 
apply, in our opinion, in a fair and equitable fashion across 
the communities of America. The members of the MSA Fairness 
Coalition, the 12 communities that are here represented today, 
are all in the same situation. They are being prejudiced, we 
believe, unfairly by the fact that they cannot qualify.
    Representative Holden was very careful in explaining the 
land configuration problems that Schuylkill County faces. The 
land capable of being developed in one section of our country 
with high density and few land options does not fairly 
represent practical investment or any developmental potential 
in other communities such as Schuylkill County.
    The ravages of the coal industry, unfortunately, have left 
certain areas practically undevelopable from an economic 
standpoint. Notwithstanding either the definition or the 
application of standards have called that land developable and 
we are unable to expand the contiguity of the core city, 
Potsville, to reach that 50,000 population level.
    Standards, we believe, must be based on fairness and equity 
for communities to compete for jobs. But to compete with a 
distinct disadvantage places communities such as ours in a 
position where it is practically impossible to gain good jobs 
and move local communities forward or to improve the quality of 
life.
    We have a core city that can achieve a goal if the 
standards change. We believe and we respectfully ask the 
members of this committee to respond to the plea of Schuylkill 
County and the 11 other communities that are part of the MSA 
fairness coalition to allow you to change the communities so 
that none of us suffer from the disadvantage we now suffer.
    By changing the government standards for MSA status so that 
all communities of 100,000 or greater people will qualify for 
MSA status, you will level the playing field and you will give 
us the equal status that eliminates our competitive 
disadvantage and allows us to compete in the economic 
development marketplace as equals.
    I might add, Mr. Chairman, that we have over 350 letters 
from local people who feel that strongly about becoming an MSA 
that we would like admitted in the record.
    Mr. Horn. We certainly will take a look at it. And if we 
can include them, we will.
    [Note.--Additional letters can be found in subcommittee 
files.]
    [The letters referred to follows:]



    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Marshall. Thank you, I would be pleased to answer any 
questions and I thank you very much for allowing us and 
Schuylkill County to be represented here.
    [The prepared statement of Mr. Marshall follows:]



    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Horn. While they are here, let me extend the invitation 
to Mrs. Wallman and Mr. Fitzsimmons please join us here. You 
can ask questions and they can ask questions and I think we 
will get some closure on this. Why don't you come back to the 
table and we welcome you.
    One of the problems obviously is the current definition, 
and I guess I would ask our friends from Census and OMB, what 
are the options one might think about when you have got the 
100,000 mark having been met, and then you have either 
commuting in one direction--and, of course, I'm saying why not 
commuting in several directions? What is the standard that the 
commuting means when you have the 100,000?
    Ms. Wallman. Mr. Chairman, you are going to see me rely 
extremely heavily on my colleague from the Census Bureau, Mr. 
Fitzsimmons, who is indeed an expert. I would note that the 
commuting actually is not unidirectional, and Jim will give a 
little more explanation of that.
    Mr. Horn. Good.
    Mr. Fitzsimmons. Commuting under the present standards, in 
fact, is measured in both directions. By ``both,'' I mean from 
a county possibly qualifying for outlying county status to a 
central county and the reverse; commuting is measured to the 
central county and from the central county.
    Mr. Horn. Well, that is really one direction. You are going 
to the place.
    Mr. Fitzsimmons. Meaning it is not multiple metropolitan 
areas? Yes. The key there is that OMB's practice has been to 
define individual metropolitan areas rather than metropolitan 
classes or you might come up with a different term, classes of 
counties. So in defining individual metropolitan areas, if you 
have some commuting from a county to each of three or four 
surrounding metropolitan areas, which metropolitan area would 
you put the county in if it doesn't qualify to any of the four?
    That's the question posed by the current standards. And 
they prevent it. You could think in terms of classes of 
counties based on different kinds of characteristics instead, 
but the current standards are ones about defining individual 
metropolitan areas.
    Mr. Horn. What were some of the options when this standard 
was developed? What was another way to look at that? And why 
did the Census Bureau settle on that particular one-way 
standard to and from a particular area?
    Mr. Fitzsimmons. Metropolitan areas were developed before 
the 1950 census. They followed from work that had been done for 
several decades before that in defining an entity called the 
metropolitan district at the Census Bureau. Metropolitan areas 
were actually developed by the Office of Management and Budget 
with an interagency committee.
    Beyond that, I don't know what other considerations they 
had in defining areas with regard to whether they considered 
classes of counties. The standards were evolving. They were 
going from something called metropolitan districts, again, to 
metropolitan areas, but they were still defining individual 
metropolitan areas. It was also a different time. The commuting 
patterns were different before 1950 than they are now and 
that's part of the reason why all of this is up for evaluation 
between now and Census 2000.
    Mr. Horn. Are there some options that people are 
considering that haven't been brought up this morning? And if 
so, what are they just for the record?
    Mr. Fitzsimmons. The full range of options is out there, 
including not using commuting measures at all: using population 
densities as a surrogate for commuting, for example, and as a 
larger measure of activity patterns.
    I think in the flows that you were talking about earlier, 
you were not limiting yourself to journey to work and daily 
commuting, which is what has been used to date. It has been 
suggested, for example, that we could look at population 
density as a surrogate for the web of activity that involves 
not just journey to work, but the other journeys that people 
take on a daily or weekly basis. That is one of the proposals.
    Mr. Horn. Which would include shopping, entertainment, 
recreation, all of those options?
    Mr. Fitzsimmons. That immediately poses measurement 
problems, but, yes, that has been proposed.
    Mr. Horn. There is certainly a lot of truth to that. We 
talk about the soccer moms and often they are leaving a 
particular home area to get to a recreational or an artistic 
cultural function with the children and then coming back to 
that home area and it does contribute to the economy to some 
extent.
    Mr. Fitzsimmons. Yes, though, again, we will come up 
against the hard rock of measuring these things in a way that 
they can be applied across the United States.
    Mr. Horn. Well, conceivably since the Census Bureau 
believes in sampling to some extent, couldn't one sample in 
this area?
    Ms. Wallman. Mr. Chairman, I think it is fair--I am not 
going to get into the sampling discussion right now.
    Mr. Horn. I am just saying here is a place to apply it.
    Ms. Wallman. Well, there actually is a proposal that the 
administration has asked the Congress to look at with respect 
to a more frequent updating of some of our basic demographic 
information, known as the American Communities Survey. I am 
sure you have been exposed to that at some point.
    Mr. Horn. No, I would like you to tell me about it.
    Ms. Wallman. You would like me to tell you about the 
American Communities Survey? I could do my best, and I have 
colleagues here who probably could fill in if I make any 
errors. But the general concept is over the next decade to look 
toward having annual information of the type that we have 
traditionally gathered through the decennial census long form, 
so that we have more up-to-date information for use in 
allocation of Federal funds. This surely is one of the concerns 
that we would have. There are a number of other areas that 
could be explored as well.
    One of the issues that has come up recently is if we were 
to stick with our thoughts about commuting data, would the 
American Communities Survey provide a vehicle--I make the pun 
unintentionally--to have more up-to-date information on 
commuting.
    My colleague, Mr. Spar, has indicated that maybe we should 
update the metropolitan areas more frequently. We need data in 
order to do that, depending upon what constructs we would 
decide to use.
    Mr. Horn. The question often comes up about these subcounty 
areas or submetropolitan district, metropolitan consolidated 
whatever it is. Obviously, two come to mind that people do use 
for various purposes and those are the census tract and the ZIP 
Code.
    Could you just for the record, for the average citizen and 
the average Congressional Member, sort of differentiate between 
what goes into picking a particular census tract. And in 
relation to your knowledge, although it isn't, I guess under 
your jurisdiction, to what extent does a ZIP Code overlap or 
have different criteria? I would just like to get it spelled 
out simply and I know you will do that in a very fine way.
    Ms. Wallman. Mr. Chairman, I will do that most effectively 
if I defer to one of my colleagues.
    Mr. Horn. Well, some colleague?
    Ms. Wallman. Mr. Spar or Mr. Fitzsimmons may know the 
answer to this question more than I do.
    Mr. Spar. There is really no relationship between the two, 
sir. The tract is obviously a government definition that is 
pretty much consistent over time. The idea being it gives you a 
chance to see how things change socioeconomically. I'll get in 
trouble by saying this, but I have no belief that the ZIP Code 
is geography.
    Mr. Horn. Then, what do you think it is?
    Mr. Spar. I believe it is nothing more than a bunch of 
carrier routes for delivery of the mail. You, sir, said that 
you came from a small farming area. Then you are aware of the 
fact that this line is mythical that goes from point A to point 
B in terms of trying to designate what a ZIP Code looks like. 
There is no real geography that you follow along the road to 
make that square. On the other side, you have got a building 
that can have five ZIP Codes in it. Floors 34 through 37 could 
be one ZIP Code.
    Mr. Horn. I am sorry, I missed hearing that last part.
    Mr. Spar. You could have a building that has three or four 
ZIP Codes in it. The Empire State Building or the World Trade 
Center has more than one ZIP Code in the building because of 
this concentration, if you will, of mail delivery. All a ZIP 
Code is is a means of delivering the mail. There is really no 
relationship between those two. The way I'd put it, one is 
geography and one is just a construct.
    Mr. Horn. In your judgment, should there be another concept 
behind the ZIP Code besides simply delivering the mail?
    Mr. Spar. Probably not, because the problem would be trying 
to get the data.
    Mr. Horn. The fact is the insurance industry uses ZIP Code 
to set their rates; right?
    Mr. Spar. Yes, they do. Oh, yeah, they use it for all kinds 
of measures and there are firms that update ZIP Code 
information and the Census Bureau even tabulates once every 10 
years from the decennial census at the ZIP Code level. All the 
point I am trying to make as long as we don't think of them as 
a picture of geography, they are very valuable to aggregate to 
get an idea of what a subcounty area might be like. Same for 
the tract, if you could update the tracts.
    Mr. Horn. Well, that's what I want to get at. What is the 
most useful for various purposes? We've got two subgroups here, 
a census tract and a ZIP Code. They're done by different 
agencies for different purposes. Now, if you as a demographer, 
which you are, had to pick and choose between one of them, what 
would be the most useful of the two for most of the data-
gathering reasons in the private sector as well as the public 
sector?
    Mr. Spar. I would opt probably for block groups within 
tracts.
    Mr. Horn. You would go for what?
    Mr. Spar. A block group, which is a subset of a tract. A 
tract is made up of a bunch of block groups and then the tract 
itself, and buildup, because----
    Mr. Horn. You are talking about this census tract?
    Mr. Spar. Right, exactly right. And then build those up. 
Those are geographies that we can actually find a crosswalk, 
Third Street and 7th Avenue kind of situation. I would prefer 
to use those and have those updated more frequently than every 
10 years. Be able to build inner cores, if you would, and then 
move out. The entire Nation is tracted, which would enable such 
a construct to take place. One other thing----
    Mr. Horn. I would like to ask Mr. Fitzsimmons if you could 
give to me a simple way that you develop a census tract and 
what was the basic purpose when a census tract was designed. 
Was that simply to take the census or to see change in an area 
or what?
    Mr. Fitzsimmons. Yes, they are statistical areas defined by 
the Census Bureau with local participation. I'm not an expert 
on census tracts, but they have a range of population within 
which they fit to keep them roughly equal in size across the 
Nation.
    Mr. Horn. Well, what's the range roughly?
    Mr. Spar. 4,000 people.
    Mr. Horn. 4,000 people per tract?
    Mr. Spar. Yeah, and the idea being when they start to 
really grow, then they split them. Census tracts aren't changed 
unless there is really a need to do so. Detroit had to redesign 
their entire area at one point because of all the shifting that 
went on in the inner city, but if you don't have major 
changes--New York City is an example. There has been little 
change in the actual tracts in New York City over the last--I 
think they started in 1950.
    Mr. Horn. In a sense, we have 50 years of data by census 
tract in most areas of the United States where there wasn't 
rapid change?
    Mr. Spar. Certainly, for the central cities. And then over 
time they started to track the entire Nation. I am correct, 
Jim? I think in 1990?
    Mr. Fitzsimmons. The 2000 Census will have a completely 
tracted United States. In 1990, there was a combination of 
these tracts and block numbering areas outside of metropolitan 
areas. In earlier times only metropolitan areas would have had 
tracts within them.
    Mr. Horn. Let me round this out. I am just curious, does 
this buildup in the bottom simply 4,000 at a time and spread 
out? Do you draw a geographic line around the 4,000? Is that 
the way it works? You go from some center point in, let's say, 
core city and start building census tracts outward or is there 
some relationship to race, ethnicity, age, whatever, in these 
tracts that you're trying to develop?
    Mr. Fitzsimmons. No, they're based on total population.
    Mr. Horn. Simply population and nothing else. Not type of 
population?
    Mr. Fitzsimmons. No.
    Mr. Horn. So, let's face it, registrars of voters probably 
use census tracts in a way to develop some of their districts 
simply because of the population. If you assume there is a 
certain relationship between voters, there might be due to some 
population mostly kids in the area now and not enough people 
for the registrar to put a polling booth in a census tract, but 
just cutting across their own lines. So I'm curious how census 
tracts are used by people in the marketing business, shall we 
say. Is this just a happenstance, and since there is no real 
formulation of who goes into a census tract except sheer 
numbers?
    Mr. Spar. What the private sector has done is they have 
updated these geographies. They have taken various demographic 
techniques and they update age, race, sex, income, et cetera. 
And these updates actually go down to as low as the subtract 
area, the block group. They then reallocate all of this so the 
final determination, this market area, is a grouping wherever 
probable of known geographies like tracts, but now you 
basically have updated information and you have got a market 
segment.
    The market segment, as I said before, could be some cluster 
of areas, but the advantage from the private sector point of 
view is that you can--you're not constrained by counties, 
you're not constrained by the data that you have got from the 
public sector where the only thing it is updated for all 
intents and purposes is population. The private sector takes a 
totally different approach to the creation of areas. They are 
freer. They have less constraints.
    Mr. Horn. But you could, with that stability of the tract 
in terms of numbers, unless split, you could have a real 
snapshot of change as it occurs over time in terms of 
economics, taxation, and all the rest of the things, 
presumably, that the economic side would mirror to some degree 
what is going on in that tract.
    Mr. Spar. That's exactly what the private sector does.
    Mr. Horn. Well, any other questions? Mr. Marshall, would 
you like to ask any questions?
    Mr. Marshall. No, sir, I would not.
    Mr. Horn. OK. How about members of the administration, 
would they like to ask any questions?
    Mr. Fitzsimmons. Sir, I would just add that census tracts 
and ZIP Codes have both been suggested as possible units to use 
in defining metropolitan areas and nonmetropolitan areas in the 
future. They are options that will be explored.
    Mr. Horn. I will suggest again, I think one of the best 
groups in America that we ought to be hiring during the census 
are the postal workers. They walk these territories. They know 
what is real and what is unreal in terms of some residences. 
Some people have 26 people living in a residence. That will 
never be picked up on much of your sampling or your mailing or 
anything else. And yet that postal worker will know from long 
experience who is around the neighborhood. And it seems to me 
there ought to be a real opportunity there. This is after 
hours, pay them whatever, and that would be good for the postal 
workers, and I think you would have a very accurate count. Much 
more than I think we do now, very frankly.
    Are there any other subcodes, areas besides the ZIP Code 
and the census tract that we ought to have some understanding 
of? Is that it? Basically, the ZIP Code, presumably, for 
delivering mail?
    Mr. Fitzsimmons. There was a third one that escapes me at 
the moment that's also been suggested.
    Mr. Horn. Why don't we just put it in the record?
    Ms. Wallman. It's in the record.
    Mr. Fitzsimmons. It's in the written testimony.
    Mr. Horn. Mr. Davis, do you have any questions?
    Mr. Davis. Thank you very much, Mr. Chairman. You know you 
sometimes baffle me about your knowledge and wisdom when you 
start talking about 26 people in one building or one house. It 
sounds like you have been in the communities that I'm familiar 
with. And where I live. And I didn't know that you knew about 
those. But----
    Mr. Horn. Trust me, I do.
    Mr. Davis. Thank you. Mr. Marshall, I could feel your 
testimony.
    Mr. Marshall. Thank you, sir.
    Mr. Davis. I mean when the group decided who they wanted to 
come down and make the case, I guess they couldn't have done 
better in terms of selecting a person. Could you tell me--I 
want to see if I could see it--just what would your community 
get in benefit if it did, in fact, receive the MSA designation?
    Mr. Marshall. We believe what Schuylkill County would gain 
is principally more in the private sector than from what I will 
call government assistance. Through research, we have learned 
that there are certain funding elements that would come through 
housing and urban development, and other perhaps government 
agencies that would be directly available to Schuylkill County. 
But that is not really the true significance of what we see MSA 
status to be. Mr. Spar detailed greatly the benefit to a 
community such as ours.
    We are shut out from having availability of national 
companies and national retail chains even considering 
Schuylkill County because we are not listed on the national MSA 
lists and they are significant. We have not been able to yield 
growth in both, as I said, the retail area and the industrial 
area.
    Our ability to gain economic development has in effect been 
stunted, not shortchanged, but stunted in the sense that not 
being in an MSA eliminates, again, our community from even 
being considered by a Fortune 500 company who won't look at 
anybody who is not an MSA. Our community has suffered the 
ravages, unfortunately, of the coal industry which after World 
War II significantly died. We have been fighting an uphill 
battle for years. Quite honestly, we have been trying to attain 
MSA status, I am told, for 20 years, and because we cannot meet 
the criteria merely because of the configuration of our county, 
we have been shut out.
    What MSA status would bring to Schuylkill County, as I said 
earlier, is the ability to let us compete on a level playing 
field with Harrisburg, Reading, Allentown, Philadelphia, MSA 
communities that surround us. They have created an enclave 
which has excluded Schuylkill County from being able to compete 
in the private sector. That's what we would gain, not 
necessarily increased government funding.
    Mr. Davis. It is like some of us if we don't go home on 
weekends and things like that to our districts, although they 
all know we exist. When we are out of sight, we are out of 
mind. And even though we are real, if you're not on the chart, 
you're not on the list. Then you're not really considered----
    Mr. Marshall. Exactly. A good analogy is having a degree, 
but not getting on the list for a job. Being shut out unfairly, 
we believe.
    Mr. Davis. So private sector concerns weigh just as heavily 
or perhaps even more heavily than considerations in 
relationship to interaction with government or governmental 
agencies.
    Mr. Marshall. Absolutely, sir. Without question.
    Mr. Davis. If there were to be changes in the designation, 
would it be of any real value to have those changes occur prior 
to the taking of the 2000 year Census or would it be better to 
see if there might not be a way to move ahead and make 
adjustments before then?
    Mr. Marshall. I believe the expression ``the sooner the 
better'' was used here today. Unquestionably, benefits would 
flow as soon as Schuylkill County could be designated as an 
MSA. And right now, yes, without question, we believe that if 
it could be done tomorrow, there would be benefits flowing to 
all 12 communities that are part of the MSA coalition with no 
detriment to the Federal Government.
    Mr. Davis. Mr. Spar, you have heard the testimony. What 
would your reaction be?
    Mr. Spar. Well, two things. First, I think it certainly 
should wait until the 2000 Census so that we have the latest 
information in order to be able to fairly delineate these 
areas. But there is an irony which is, I just don't believe the 
entire Nation should be classified one way or another. In other 
words, I see almost every county in the United States having a 
degree of metropolitanness, if you would.
    Under that scenario, I think Mr. Marshall might be quite 
unhappy with me, because you are no longer exclusive. You no 
longer have a special delineation because you are now 
metropolitan and somebody isn't. Everybody is to some degree 
metropolitan, which I think is the right way to go on this.
    So I think there's--I have a different approach to the 
problem. I certainly agree with you. In fact, I believe that 
your county to a good degree is a metropolitan type of county, 
along with many, many others. But I would see you in one of 
these areas that would fit the entire range of the Nation. That 
might be very different than the way you would like to see it.
    Mr. Davis. Let me just pursue, Mr. Spar, a little bit. Give 
your direction. It seems to me that one of the reasons that the 
MSA designation came about or was developed in the first place, 
was to try and identify core population groups. How would the 
utilization of smaller entities such as ZIP Code areas and that 
kind of thing, how that would impact upon the one reason at 
least for the designation?
    Mr. Spar. First of all, it would enable you to have a 
better delineation. What would happen is that you could use 
small geographies to be able to give you a better breakout of 
the core, if you would. I'll give you an example. If you have a 
small metropolitan area, the central city has a downtown core, 
and probably most of that central city is suburban. It's 
usually only in the large metropolitan areas where you have 
this very large area and you don't have a suburban area until 
you get to the next county. That is not the case probably in 
the vast majority of metropolitan areas, but we don't have any 
way of differentiating that right now.
    You can only differentiate that if you use the geography 
below the county level. I think I am answering the question. It 
allows you this ability to get this core construct as 
juxtaposed to the balance of the area. I think that answers it.
    Mr. Davis. Would there, then, be anything that we would 
call something other than having been designated? I mean, would 
that affect other definitions?
    Mr. Spar. Oh, for sure, absolutely. I think what you're 
going to have here is the whole metropolitan definition is 
going to be completely different and you will still have the 
city, but rather than just saying you have the city of X, 
you'll have what I call for lack of a better phrasing, in-urban 
core of city X, and then you will have the urban surrounding 
part of city X, and then you will have the suburban part of 
city X. See what I'm saying? I see this as basically a 
continuum across the Nation.
    You could argue that just about any county in the United 
States, 3,142 counties in the United States, has some degree of 
metro-politanness. How do we bring them together? That's not an 
easy--I don't have any ready answer for that.
    Mr. Davis. Since the consideration still has some time, 
could I just ask, and this is perhaps my last question, if each 
one of you might consider, are there other things that could be 
looked at in terms of shared information with OMB before the 
census is taken? And would it be put into the hopper or the pot 
as this question is being considered? So if there are other 
possibilities or other items that could be looked at, would you 
each share those if you have got some?
    Mr. Spar. I had mentioned in my opening remarks that I 
believe there's been a lot of good work done in the private 
sector in terms of geographic information systems and in terms 
of the ability to update demographic data. I don't suggest that 
OMB or the Census Bureau use all of these--these data or all of 
these constructs, but I think there might be some public-
private partnership that could be developed that would aid the 
government in updating these areas in terms of small 
geographies and in terms of more often.
    Mr. Davis. And let me just say, if the changes that we are 
talking about were, in fact, made, and the affected communities 
were able to get their designations, do you see any other 
groupings that would express concern or opposition in terms of 
how those changes might affect them?
    Mr. Spar. Sure. With trepidation, sir, one of the areas 
that I would be concerned about, that comes to mind immediately 
would be redlining. If you are using small constructs, one has 
to be very, very careful that what we are not doing here is 
defining ghettos. Something I've thought about quite often, and 
struggle with. That's scary. And I think that has to be taken 
into account. One has to look at that very closely. However, 
census and OMB decide to change these areas.
    Mr. Marshall. I realize that there needs to be uniformity, 
but I've always believed that some classification of counties 
based on the configuration of the local communities would be 
meaningful here. Schuylkill County happens to be a fourth class 
county. We can't really compare ours for example to 
Philadelphia which is a first class county. But we are treated 
on the same level as they are.
    I believe that benefit might be gained by smaller 
communities that are homogenous, and we are, and commuting 
patterns within Schuylkill County will prove that the core 
community that they looked for is now there, even though it 
might be wider than the contiguous land area that they look 
for. They have drawn arbitrary lines. And I don't mean this as 
a criticism, but they have these objective standards that 
really are not fairly applied.
    So I would look really to some form of classification that 
would give smaller counties an opportunity of qualifying on a 
better basis from that standpoint.
    Mr. Davis. I thank you all very much, and I certainly would 
suggest that OMB is wrestling and I think moving in some very 
positive and direct ways to try and clarify these issues and I 
appreciate the work that you're doing. Thank you very much, Mr. 
Chairman.
    Mr. Horn. I take it, Mr. Marshall, when you say a fourth 
class county, you're talking about Pennsylvania law?
    Mr. Marshall. Pennsylvania law.
    Mr. Horn. What is the sequence? About six classes?
    Mr. Marshall. I think there are eight classes.
    Mr. Horn. Some States just assign a class to every city or 
population in ascending or descending order.
    Mr. Marshall. I don't know what the criteria is.
    Mr. Horn. To make law that presumably applies to that 
county, which it wouldn't in a completely rural county.
    Mr. Marshall. We lump fourth to eighth class counties under 
one segment of our law, so there obviously must be some 
relationship.
    Mr. Horn. I am familiar with your area, being that 
Potsville is the home of John O'Hara and Potsville was also the 
home of a close friend of mine who was a great political 
scientist and reporter when he was there, and that is James 
Rikley. I don't know if you have ever run into Jim.
    Mr. Marshall. We are also the home of Union beer.
    Mr. Horn. You are the home of a lot of things. You do face 
some real problems with those anthracite piles. They probably 
haven't changed much since I was there and you have got a tough 
time. So we are sympathetic with you.
    One of our fine professional staff members noted this, Mr. 
Fitzsimmons. ``Census tracts were developed as administrative 
units to balance the workload of conducting the census. They 
remain useful for that purpose, but have maintained constant 
boundaries wherever possible to facilitate comparisons across 
time.'' Is that a pretty accurate statement?
    Mr. Fitzsimmons. I am sorry, you are reaching beyond my 
expertise with census tracts today.
    Mr. Horn. Is that pretty much what your understanding is?
    Mr. Spar. Yes, yes, sir.
    Mr. Horn. At least we have got you two generalists seated 
next to two statisticians of the United States and the 
demographer in the private sector. What more can I ask for this 
morning?
    Well, we thank you all for coming. I think it has been a 
very enlightening discussion. We have all learned a lot and I 
want to thank the staff that put this together starting with J. 
Russell George against the back wall there, staff director for 
the Subcommittee on Government Management, Information, and 
Technology. The staff member particularly responsible for this 
hearing is my colleague on your right, Mark Brasher, 
professional staff member; and John Hynes, professional staff 
member; Andrea Miller the majority clerk; David McMillen, 
professional staff member for the minority; and Jean Gosa, the 
clerk for the minority. We have four free laborers here known 
as interns, bright college students, Darren Carlson, Jeff Cobb, 
John Kim, Grant Newmann, and our court reporter, Joe 
Strickland. And we thank you all, and with that, this hearing 
is adjourned.
    [Whereupon, at 11:37 a.m., the subcommittee was adjourned.]
    [Additional information submitted for the hearing record 
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