[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]








           CENSUS DATA AND ITS USE IN FEDERAL FORMULA FUNDING

=======================================================================

                                HEARING

                               before the

                  SUBCOMMITTEE ON INFORMATION POLICY,
                     CENSUS, AND NATIONAL ARCHIVES

                                 of the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                              JULY 9, 2009

                               __________

                           Serial No. 111-23

                               __________

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


  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                               index.html
                     http://www.oversight.house.gov



           CENSUS DATA AND ITS USE IN FEDERAL FORMULA FUNDING

=======================================================================

                                HEARING

                               before the

                  SUBCOMMITTEE ON INFORMATION POLICY,
                     CENSUS, AND NATIONAL ARCHIVES

                                 of the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                              JULY 9, 2009

                               __________

                           Serial No. 111-23

                               __________

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


  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                               index.html
                     http://www.oversight.house.gov




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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                   EDOLPHUS TOWNS, New York, Chairman
PAUL E. KANJORSKI, Pennsylvania      DARRELL E. ISSA, California
CAROLYN B. MALONEY, New York         DAN BURTON, Indiana
ELIJAH E. CUMMINGS, Maryland         JOHN M. McHUGH, New York
DENNIS J. KUCINICH, Ohio             JOHN L. MICA, Florida
JOHN F. TIERNEY, Massachusetts       MARK E. SOUDER, Indiana
WM. LACY CLAY, Missouri              JOHN J. DUNCAN, Jr., Tennessee
DIANE E. WATSON, California          MICHAEL R. TURNER, Ohio
STEPHEN F. LYNCH, Massachusetts      LYNN A. WESTMORELAND, Georgia
JIM COOPER, Tennessee                PATRICK T. McHENRY, North Carolina
GERRY E. CONNOLLY, Virginia          BRIAN P. BILBRAY, California
MIKE QUIGLEY, Illinois               JIM JORDAN, Ohio
MARCY KAPTUR, Ohio                   JEFF FLAKE, Arizona
ELEANOR HOLMES NORTON, District of   JEFF FORTENBERRY, Nebraska
    Columbia                         JASON CHAFFETZ, Utah
PATRICK J. KENNEDY, Rhode Island     AARON SCHOCK, Illinois
DANNY K. DAVIS, Illinois             ------ ------
CHRIS VAN HOLLEN, Maryland
HENRY CUELLAR, Texas
PAUL W. HODES, New Hampshire
CHRISTOPHER S. MURPHY, Connecticut
PETER WELCH, Vermont
BILL FOSTER, Illinois
JACKIE SPEIER, California
STEVE DRIEHAUS, Ohio
------ ------

                      Ron Stroman, Staff Director
                Michael McCarthy, Deputy Staff Director
                      Carla Hultberg, Chief Clerk
                  Larry Brady, Minority Staff Director

   Subcommittee on Information Policy, Census, and National Archives

                   WM. LACY CLAY, Missouri, Chairman
PAUL E. KANJORSKI, Pennsylvania      PATRICK T. McHENRY, North Carolina
CAROLYN B. MALONEY, New York         LYNN A. WESTMORELAND, Georgia
ELEANOR HOLMES NORTON, District of   JOHN L. MICA, Florida
    Columbia                         JASON CHAFFETZ, Utah
DANNY K. DAVIS, Illinois
STEVE DRIEHAUS, Ohio
DIANE E. WATSON, California
                     Darryl Piggee, Staff Director












                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on July 9, 2009.....................................     1
Statement of:
    Finkbeiner, Carleton, mayor, city of Toledo, OH; Robert 
      Bowser, mayor, city of East Orange, NJ; Arturo Vargas, 
      executive director, National Association of Latino Elected 
      and Appointed Officials; and Jamie Alderslade, director of 
      external relations, the Social Compact, Inc................   159
        Alderslade, Jamie........................................   199
        Bowser, Robert...........................................   175
        Finkbeiner, Carleton.....................................   159
        Vargas, Arturo...........................................   180
    Mesenbourg, Thomas, Acting Director, U.S. Census Bureau; 
      Robert Goldenkoff, Director, Strategic Issues, U.S. 
      Government Accountability Office; Todd Richardson, 
      Associate Deputy Assistant Secretary, Policy Development, 
      U.S. Department of Housing and Urban Development; Donald 
      Moulds, Acting Assistant Secretary, Planning and Education, 
      U.S. Department of Health and Human Services; and Stuart 
      Kerachsky, Acting Director, National Center for Education 
      Statistics, U.S. Department of Education...................    84
        Goldenkoff, Robert.......................................    90
        Kerachsky, Stuart........................................   138
        Mesenbourg, Thomas.......................................    84
        Moulds, Donald...........................................   115
        Richardson, Todd.........................................   107
Letters, statements, etc., submitted for the record by:
    Alderslade, Jamie, director of external relations, the Social 
      Compact, Inc., prepared statement of.......................   201
    Bowser, Robert, mayor, city of East Orange, NJ, prepared 
      statement of...............................................   177
    Clay, Hon. Wm. Lacy, a Representative in Congress from the 
      State of Missouri, prepared statement of...................     3
    Finkbeiner, Carleton, mayor, city of Toledo, OH, prepared 
      statement of...............................................   163
    Goldenkoff, Robert, Director, Strategic Issues, U.S. 
      Government Accountability Office, prepared statement of....    92
    Kerachsky, Stuart, Acting Director, National Center for 
      Education Statistics, U.S. Department of Education, 
      prepared statement of......................................   140
    Maloney, Hon. Carolyn B., a Representative in Congress from 
      the State of New York, prepared statement of...............   214
    McHenry, Hon. Patrick T., a Representative in Congress from 
      the State of North Carolina:
        Bipartisan report........................................     9
        Prepared statement of....................................    77
    Mesenbourg, Thomas, Acting Director, U.S. Census Bureau, 
      prepared statement of......................................    86
    Moulds, Donald, Acting Assistant Secretary, Planning and 
      Education, U.S. Department of Health and Human Services, 
      prepared statement of......................................   117
    Richardson, Todd, Associate Deputy Assistant Secretary, 
      Policy Development, U.S. Department of Housing and Urban 
      Development, prepared statement of.........................   109
    Vargas, Arturo, executive director, National Association of 
      Latino Elected and Appointed Officials, prepared statement 
      of.........................................................   183
    Watson, Hon. Diane E., a Representative in Congress from the 
      State of California, prepared statement of.................    80

 
           CENSUS DATA AND ITS USE IN FEDERAL FORMULA FUNDING

                              ----------                              


                         THURSDAY, JULY 9, 2009

                  House of Representatives,
   Subcommittee on Information Policy, Census, and 
                                 National Archives,
              Committee on Oversight and Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 3:10 p.m., in 
room 2247, Rayburn House Office Building, Hon. Wm. Lacy Clay 
(chairman of the subcommittee) presiding.
    Present: Representatives Clay, Maloney, Watson, McHenry, 
and Westmoreland.
    Also present: Representative Kaptur.
    Staff present: Darryl Piggee, staff director/counsel; Frank 
Davis, professional staff member; Jean Gosa, clerk; Charisma 
Williams, staff assistant; Leneal Scott, information systems 
manager; Dan Blankenburg, minority director of outreach and 
senior advisor; Adam Fromm, minority chief clerk and Member 
liaison; and Chapin Fay, minority counsel.
    Mr. Clay. The Information Policy, Census, and National 
Archives Subcommittee will now come to order. Good afternoon 
and welcome to today's hearing entitled: ``Census Data and Its 
Use in Federal Formula Funding.''
    Today's hearing will examine the impact of using census 
data on local recipients in Federal funding allocation 
decisions. On our first panel, we will hear from Federal 
department witnesses who will testify about how select Federal 
Government agencies use census data in their funding formulas. 
Our second panel is comprised of local government officials and 
private agencies who will tell us about their knowledge and 
experience with census data and their recommendations to 
improve the use of census data in Federal formula funding.
    Without objection, the Chair and ranking minority member 
will have 5 minutes to make opening statements followed by 
opening statements not to exceed 3 minutes by any other Member 
who seeks recognition.
    Without objection, Members and witnesses may have 5 
legislative days to submit a written statement or extraneous 
materials for the record.
    I will begin with my opening statement.
    The purpose of today's hearing is to examine how census 
data are used in Federal funding program calculations and 
whether these Federal funding formulas fairly distribute 
Federal moneys to States, cities, and local governments. We 
will consider many important issues today including what 
criteria are used in these Federal funding formulas, whether 
Congress and agencies factor in the under-count of certain 
communities in these calculations, and what steps Congress and 
the administration can take to improve census data and the 
present formulas.
    Census data are used by over 180 Federal programs in 
determining funding levels to cities, counties, and States. 
These Federal allocations to local governments and States 
topped over $375 billion in 2007 alone. Federal programs that 
use census data in their funding formulas include Title I 
education appropriations, Medicaid, and Community Development 
Block Grants.
    This subcommittee is concerned about HUD's Community 
Development Block Grant program in particular, especially with 
regard to recent developments in Toledo, OH. In 2008, the Mayor 
of Toledo challenged census estimates and successfully added 
over 20,000 city residents to Toledo's population. However, 
with this increase in population, Toledo lost over $290,000 
dollars in Community Development Block Grant funding. It is 
counter-intuitive for HUD to provide Toledo with less Federal 
funding because the Census Bureau increased the city's under-
counted population number.
    Other Federal funding formulas such as Medicaid 
redistribute hundreds of millions of dollars among States when 
census under-count data are corrected. Federal funding formulas 
like Medicaid and Community Development Block Grants are 
sensitive to the under-count, which causes Federal funds to be 
mis-allocated to cities and States, hurting traditionally 
under-counted populations such as low income children and 
immigrant communities.
    Census data are used for a large majority of all Federal 
funding formulas. There needs to be clarity and transparency as 
to how census data are used and if these Federal funding 
formulas truly serve their targeted communities. Today's 
hearing will address these issues and reveal existing problems, 
solutions, and what further research needs to be done with 
census data and its use in Federal funding formulas.
    Let me thank all of our witnesses for appearing today. I 
look forward to their testimony.
    I now yield to the distinguished ranking minority member, 
Mr. McHenry of North Carolina, for 5 minutes.
    [The prepared statement of Hon. Wm. Lacy Clay follows:]


    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Mr. McHenry. Thank you, Mr. Chairman. Thank you for holding 
today's hearing. I want to begin by thanking again Mr. 
Mesenbourg and Mr. Goldenkoff for reappearing before the 
committee. It is good to have you back. For the other 
witnesses, thank you so much for agreeing to testify and being 
here today.
    As the chairman has already stated, the data collected by 
the Census Bureau is vitally important to the calculation of 
funding levels and appropriations in Federal programs at the 
congressional level and by Federal agencies themselves. Data 
are also used by State and local governments to allocate 
resources and services, and by the private sector to determine 
where to invest and develop industry.
    The subject of today's hearing underscores the importance 
of filling out the decennial census form when it arrives on 
April 1, 2010. It is vitally important to the American people 
that everyone in this country respond to that form. It is not a 
partisan issue. It is simply a matter of having an accurate 
picture of who is in this country on census day 2010. This is 
very important. It is a very core Constitutional principle that 
we have an accurate count of who is here in this country.
    With having a short form only census, it makes it even 
easier for the American people to participate. So Members of 
Congress should advocate for participation. Everyone within 
Government should advocate for participation. We are grateful 
for community groups who are involved to ensure that people 
participate as well.
    I would also like to thank the chairman for having this 
hearing today. We last met in March. I know that we have racked 
up address canvassing, as Mr. Mesenbourg has related to the 
Congress. From the accounts we have gotten, it has gone very 
well. We are very grateful for that. That address canvassing, 
as Mr. Mesenbourg has previously said, is a cornerstone to the 
2010 census.
    I hope that we can have Mr. Mesenbourg or the new Director, 
whenever the Senate determines that they will actually act, 
then we can actually get the new Director in. But approximately 
140,000 census workers took to America's streets this spring to 
verify addresses and assemble the Bureau's list of where 
decennial forms will be sent and where, if needed, enumerators 
will visit in 2010.
    On separate occasions, Chairman Clay and I have stated that 
we both have unanswered questions about this vast canvassing 
effort. The outcome of the decennial census depends largely on 
this step in the operation and so there is an obvious need to 
review and assess its successes and failures. Certainly, the 
GAO and the Census Bureau, we would love to have you back. Mr. 
Chairman, I would certainly think we would both learn a lot 
from that hearing. It is my hope that we can bring you back 
again soon to evaluate this step of the process.
    That said, today's hearing is an important opportunity for 
the committee to ensure that the census data and Federal 
funding formulas are fair, accurate, and effective.
    Chairman Clay, I thank you for bringing this issue to the 
forefront about the inequities of Community Development Block 
Grant programs. I do share your concerns.
    As for how census numbers affect the CDBG, I would like to 
point out that the funding formula involves many factors. In 
the 109th Congress, this subcommittee published a bipartisan 
report dealing with that funding formula. I ask unanimous 
consent to submit this for the record.
    Mr. Clay. Without objection, the document is submitted into 
the record.
    [The information referred to follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. McHenry. It is still regarded as a strong road map of 
how to improve the CDBG program by addressing the need as well 
as ensuring that we have the proper numbers.
    So with that, Mr. Chairman, I thank you for having this 
hearing today. I appreciate your leadership and thank you for 
your friendship.
    [The prepared statement of Hon. Patrick T. McHenry 
follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Mr. Clay. Thank you so much, Mr. McHenry. Be assured that 
as soon as the new Director is confirmed by the Senate, they 
will momentarily be before this committee. So thank you.
    I would like to recognize the gentlewoman from California 
for 3 minutes.
    Ms. Watson. Thank you, Mr. Chairman. Thank you so much for 
holding today's important hearing examining the role census 
data plays in the formulas used for distributing Federal funds. 
I look forward to hearing from today's witnesses about the 
mythologies behind these formulas and the steps being taken to 
promote the census, improve participation, and decrease the 
differential under-count to ensure that Federal funds are 
appropriated to the areas in America where they are needed 
most.
    Since the establishment of the decennial census in 1790, 
every census has experienced an under-count. According to the 
Government Accountability Office, the 2000 census missed an 
estimated 2 percent of the U.S. population, a disproportionate 
number of which were minorities, low income households, and 
children. My district in particular has traditionally been 
under-counted due to a lack of mutual understanding and 
engagement with local constituencies.
    This under-count is troubling because without accurate 
population data, it is impossible to ensure that we have a 
complete view of our Nation's demographics, that Americans have 
proper representation in State and Federal Governments, and 
that Federal grants are targeted to where they are needed most.
    According to the Census Bureau, for the fiscal year 2007, 
over $400 billion was allocated through Federal grants and 
direct assistance programs based on formulas reliant on data 
from the 2000 census. The amount of critical Federal funding at 
stake reinforces the importance of an accurate and 
comprehensive 2010 census count for local, State, and tribal 
governments.
    Mr. Chairman, I would like to thank today's panelists for 
their cooperation with our proceedings and for your leadership 
in ensuring that the 2010 census provides the most complete 
enumeration of our population in American history.
    Thank you and I yield back.
    [The prepared statement of Hon. Diane E. Watson follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Clay. Thank you so much. I also want to recognize a 
guest here who will serve on the panel here, my good friend 
Marcy Kaptur from Ohio. Thank you for coming today. If you have 
any opening statement, you can be recognized for 3 minutes.
    Ms. Kaptur. I wanted to thank you very much for the 
opportunity to sit in.
    Our community of Toledo, OH in the Ninth District well 
knows the importance of the census and the distribution of the 
tax dollars that our citizens send here to Washington and then 
by formula are sent back home.
    On the second panel I will have the pleasure of introducing 
our Mayor and his team, who have traveled very far, Mayor 
Carleton Finkbeiner. I would like to recognize him now. He is a 
12-year Mayor of our city and the first strong Mayor in 
Toledo's history. We are very proud of him. No one has fought 
harder for accurate census counts than he has, having been 
someone who helped to do the census when he was a youngster and 
having seen what actually happened when people went out into 
the field. So we look forward to his testimony this afternoon.
    I thank you very much for the time.
    Mr. Clay. You are very welcome. We look forward to your 
service on this committee today. Without further ado, I want to 
start by introducing our first panel.
    We will first hear from Mr. Thomas Mesenbourg who is 
currently serving as the Acting Director of the U.S. Census 
Bureau. He has more than 36 years of Census Bureau experience 
and now oversees the day to day operations of the Federal 
Government's perennial, preeminent statistical agency.
    Next we will hear from Mr. Robert Goldenkoff, a Director on 
the U.S. Government Accountability Office's Strategic Issues 
team. He has over 20 years of program evaluation experience 
with GAO and is currently responsible for reviewing the 2010 
census and Government-wide human capital reforms.
    Our third witness is Mr. Todd Richardson, the Associate 
Deputy Assistant Secretary in the Office of Policy Development 
for the U.S. Department of Housing and Urban Development. At 
HUD, he leads a team of staff responsible for analyzing current 
data and drawing on the results of past research to assist the 
Secretary with making informed policy decisions.
    Our next witness is Mr. Donald Moulds, the newly appointed 
Principal Deputy Assistant Secretary for Planning and 
Evaluation in the U.S. Department of Health and Human Services. 
In this capacity, he provides leadership, direction, and 
management of policy research, analysis, evaluation, and 
coordination of Department-wide science and data policy 
activities and issues.
    Our last witness on the first panel, Mr. Stuart Kerachsky, 
is the Acting Commissioner of the National Center for Education 
Statistics in the U.S. Department of Education. His career has 
been devoted to applying the best scientific methods to 
bringing information and evidence to bear on improving social 
programs.
    Let me thank all of you for appearing today before the 
subcommittee. It is the policy of the committee to swear in all 
witnesses before they testify. I would like to ask each witness 
to please stand and raise your right hands.
    [Witnesses sworn.]
    Mr. Clay. Thank you. You may be seated. Let the record 
reflect that the witnesses answered in the affirmative.
    Each of you will have 5 minutes to make an opening 
statement. Your complete written testimony will be included in 
the hearing record. The yellow light in front of you will 
indicate that it is time to sum up. The red light will indicate 
that your time has expired. When you hear this, that means shut 
it off. [Laughter.]
    Mr. Mesenbourg, you may proceed with your opening 
statement.

 STATEMENTS OF THOMAS MESENBOURG, ACTING DIRECTOR, U.S. CENSUS 
  BUREAU; ROBERT GOLDENKOFF, DIRECTOR, STRATEGIC ISSUES, U.S. 
 GOVERNMENT ACCOUNTABILITY OFFICE; TODD RICHARDSON, ASSOCIATE 
DEPUTY ASSISTANT SECRETARY, POLICY DEVELOPMENT, U.S. DEPARTMENT 
    OF HOUSING AND URBAN DEVELOPMENT; DONALD MOULDS, ACTING 
ASSISTANT SECRETARY, PLANNING AND EDUCATION, U.S. DEPARTMENT OF 
    HEALTH AND HUMAN SERVICES; AND STUART KERACHSKY, ACTING 
   DIRECTOR, NATIONAL CENTER FOR EDUCATION STATISTICS, U.S. 
                    DEPARTMENT OF EDUCATION

                 STATEMENT OF THOMAS MESENBOURG

    Mr. Mesenbourg. Chairman Clay, Ranking Member McHenry, and 
members of the subcommittee, thank you for the opportunity to 
discuss the role that data produced by the Census Bureau plays 
in Federal funds distribution. I appreciate the subcommittee's 
attention to this important issue and I am pleased to be 
testifying alongside four of the agencies that use our data.
    This helps make an important distinction. The Census Bureau 
is not involved in developing, administering, or evaluating the 
funding formula or the programs that use our data. However, the 
Census Bureau through the decennial census, the American 
Community Survey, and our Population Estimates Program is the 
producer of many of the data sources used by agencies in their 
funding formula. Our job is to produce the most accurate and 
complete data possible.
    Today I will focus my testimony on how the Census Bureau 
produces the three major data sources used for funding 
formulas. The decennial census program includes both the 2010 
census and the detailed demographic, social, economic, and 
housing characteristics information produced by the American 
Community Survey. The American Community Survey collects data 
monthly for population and housing characteristics that 
previously were collected in the decennial census long form. Of 
course, we publish that data annually.
    The Population Estimates Program produces population 
estimates for the Nation, States, counties, cities, and towns 
on an annual basis. These population estimates update the most 
recent decennial counts each year with new information using 
births, deaths, and net migration information. The population 
estimates are used in many formulas to allocate funding. They 
are also used in the production of the final American Community 
Survey estimates released to the public. Thus the quality of 
the official population estimates and the American Community 
Survey are inextricably linked to the accuracy of the decennial 
census.
    Federal agencies that administer grants and other Federal 
funds allocation programs typically use a mix of the decennial 
census, population estimates, and information from the American 
Community Survey. I make this point to stress the importance of 
the upcoming 2010 census. Our Governments Division recently 
analyzed 140 Federal grant and direct assistance programs for 
fiscal year 2007 and concluded that over $400 billion are 
distributed annually using one or more of these Census Bureau 
data sources. There is no better way to emphasize the 
importance of the 2010 census for local, State, and tribal 
governments than by acknowledging this.
    In the years between the decennial censuses, the Population 
Estimates Program of the Census Bureau produces the official 
population estimates for the United States. They are considered 
estimates because they are population figures that do not arise 
directly from a complete count. They are determined by using 
available data, for example, from available administrative 
record data on births and deaths as well as information from 
the IRS to track net migration flows. The estimates rely 
heavily on data from the latest available decennial census as 
those census data serve as the basis on which the population 
estimates are constructed.
    Again, though, the most important contributing factor to a 
State's estimated population at any given point in time is the 
count of that State's population in the most recent decennial 
census. To ensure the population estimates are as accurate as 
possible, it is important and critical to have an accurate 
census count upon which the estimates can be built. To that 
end, we encourage everyone to participate in the 2010 census.
    In closing, I want to stress that the Census Bureau's goal 
is to produce complete and accurate data that meet the needs of 
our customers. For Federal funds allocation, the single most 
important contribution the Census Bureau can make is to count 
everyone, count them once, and count them where they usually 
reside. This is the daunting challenge but we are committed to 
making the 2010 census the most successful ever.
    Thank you for this opportunity to testify.
    [The prepared statement of Mr. Mesenbourg follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Clay. Thank you, Mr. Mesenbourg. Mr. Goldenkoff, you 
are recognized.

                 STATEMENT OF ROBERT GOLDENKOFF

    Mr. Goldenkoff. Chairman Clay, Ranking Member McHenry, and 
members of the subcommittee, thank you for the opportunity to 
be here today to discuss the role that population data plays in 
the allocation of Federal funds to States and localities.
    In my written statement, we reported that in past years the 
Federal Government has annually distributed over $300 billion 
in Federal assistance through grant programs using formulas 
driven in whole or in part by census population counts. 
According to a new Census Bureau study, this figure is now over 
$400 billion for fiscal year 2007. What is more, the American 
Recovery and Reinvestment Act will obligate an additional $161 
billion to Federal grant programs for fiscal year 2009, 
including some programs that depend to some extent on census 
population data to determine the amount of Federal assistance.
    As agreed with the subcommittee, my testimony describes how 
census data are used in the allocation of Federal formula grant 
funds and how the structure of the formulas and other factors 
can affect those allocations. In particular, I want to stress 
two key points. First, although population counts play an 
important role in the distribution of Federal funds, other 
factors such as the design of the grant formulas can mitigate 
the effect that any population changes have on funding levels.
    Second, because population estimates are important for 
Federal funding allocations and the decennial census is the 
foundation for these estimates, an accurate enumeration in 
2010, including the reduction in the historic under-count of 
minority and other populations as well as a complete count of 
communities affected by Hurricane Katrina and other natural 
disasters, is absolutely essential.
    Federal grants use various sources of population data in 
their funding formulas. The largest of these is the decennial 
census, which the Census Bureau conducts every 10 years.
    The Bureau also estimates the population for the years 
between censuses, known as post-censal estimates. For example, 
the allocation formula for Social Services Block Grants, which 
help States fund day care, health, substance abuse, and 
numerous other programs, uses the most recent post-censal 
population estimates to distribute funds.
    Another source of population data is the Bureau's American 
Community Survey, which provides detailed annual data on 
socioeconomic characteristics for the Nation's communities. It 
is used to allocate Federal funds for such programs as the 
Section 8 Housing Voucher Program, which is aimed at increasing 
affordable housing choices for very low income households.
    A third source is the Current Population Survey, which is 
conducted by the Census Bureau for the Bureau of Labor 
Statistics. CPS data are used to allocate funds for programs 
under the Workforce Investment Act of 1998, which provides work 
force development services to employers and workers.
    Among funding formulas that rely on population data, the 
degree of reliance varies. On the one hand, the Social Services 
Block Grant formula allocates funding based on States' 
population relative to the total U.S. population. On the other 
hand, some formulas such as Medicaid use population plus one or 
more other variables to determine funding levels.
    As the completeness and accuracy of population data can 
modestly affect grant funding streams and other applications of 
census data, the Bureau has used a variety of programs to 
address possible errors in population counts and estimates.
    Importantly, however, while accurate population data play 
an important role in allocating Federal assistance, various 
grant-specific factors can also affect the distribution of 
Federal funds and can mitigate the impact of population 
changes. For example, some grant programs including Medicaid 
employ floors in order to mitigate the outcome that would 
result if a particular grant allocation were determined by the 
funding formula alone. Further, in order to prevent funding 
losses from a formula change, programs can include hold 
harmless provisions guaranteeing a level of funding that is 
based on a prior year's funding.
    In conclusion, while population data play an important role 
in allocating Federal assistance through formula grant 
programs, the design of a grant can also affect funding 
allocations and in some cases can mitigate or entirely mute the 
impact of a change in population. Further, shifts in 
population, inaccuracies in census counts, and methodological 
problems with population estimates can also impact the 
distribution of Federal grant money.
    Nevertheless, given the importance of census data as a 
baseline for post-censal estimates used for grant programs as 
well as for congressional apportionment and redistricting, 
counting the Nation's population once, only once, and in the 
right location in 2010 will be absolutely critical.
    Mr. Chairman, this concludes my remarks and I will be glad 
to answer any questions that you or other subcommittee members 
may have.
    [The prepared statement of Mr. Goldenkoff follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Mr. Clay. Thank you so much for your testimony, Mr. 
Goldenkoff. Mr. Richardson, you are recognized for 5 minutes.

                  STATEMENT OF TODD RICHARDSON

    Mr. Richardson. Thank you. Chairman Clay, Ranking Member 
McHenry, and members of the subcommittee, thank you for 
inviting me to testify today.
    HUD annually allocates directly or through guided 
competitions more than $10 billion to cities, counties, States, 
Indian tribes, and other grantees using several different 
formulas based on census data. The Community Development Block 
Grant program, proposed for fiscal year 2010 to allocate nearly 
$4.2 billion, allocates the largest share of the dollars.
    CDBG is a relatively complicated dual formula with one 
formula allocating toward communities that have growth and 
higher poverty and other formula allocating to communities that 
generally have old housing and population loss. These formulas 
rely on five variables from the Census Bureau. From census 2000 
data, we have persons in poverty, overcrowded households, and 
housing units built prior to 1940. These variables are fixed 
until we integrate American Community Survey data in fiscal 
year 2011. From annual Population Estimates data, including 
updated data as a result of challenges, we have the number of 
persons and a variable called growth lag.
    I am going to talk a little bit about growth lag because it 
affects the question that you raised about Toledo. The growth 
lag variable is used to fund communities that have had 
historically declining populations. If a community that has 
historically declining populations does a population challenge 
that shows its population is actually larger than we had 
thought it was, the net result on the CDBG formula, unlike most 
formulas, is to result in a funding change that would reduce 
funding under the CDBG program. So that is a little unusual in 
terms of how formulas operate. But that has been in place since 
1977 when the formula was put in place.
    Mr. Clay. I am going to ask you to explain it in more 
detail when we get to the questioning period. But go ahead.
    Mr. Richardson. Absolutely. Other programs that allocate 
funding using the basic CDBG formula are the Emergency Shelter 
Grant Program and the guiding initial pro-rata need allocation 
for the Continuum of Care homeless program competition.
    Separate formulas relying on census data largely sample 
data from the census 2000. They include the HOME, Native 
American Housing Block Grant, Indian CDBG, Section 202, and 
Section 811 programs. The Housing Trust Fund, created in HERA 
and proposed by the President to receive $1 billion for fiscal 
year 2010 would also be allocated to States using special 
tabulation data on housing needs.
    In 2010, as you know, the Census Bureau plans to publish 
the first 5-year data products based on American Community 
Survey data collected in 2005 through 2009. Beginning in fiscal 
year 2011, HUD plans to use ACS 5-year average data in place of 
the census 2000 sample data that are used to allocate most of 
the funding for the programs I just described.
    Our understanding is that the 5-year ACS data will be 
weighted to the average of the population controls over the 5-
year period. This is a very good thing since it leads to an 
integration of updated population and updated counts for all of 
the variables for each formula on an annual basis. That said, 
the initial move to the ACS data in fiscal year 2011 is very 
likely to cause some significant changes in allocation amounts 
for program grantees.
    Quality of data is only half of the equation in allocation 
formulas. Quality of the formula is equally important. Because 
housing and community development needs are not static, it is 
important to regularly assess whether these formulas need 
updating so they remain well targeted to the intended needs and 
treat all grantees fairly.
    In 2005, HUD published a report that identified some 
problems with how the CDBG formula targets funds. The 2005 
report demonstrates some stark examples of how the CDBG formula 
is currently not as fair as it could be. It over-funds some 
less needy places, it under-funds some very needy places, and 
it allocates very different grant amounts to places with 
similar needs. The current formula on average will target more 
funds to the most needy communities but does so much less so 
than it did when it was developed in the 1970's.
    There are several problems with the current formula 
including the use of housing built before 1940 as a proxy for 
population loss, aging infrastructure, and dilapidated housing. 
While this may have worked in the 1970's, since the 1970's the 
more distressed communities have torn down that old housing 
while the less distressed communities have retained it. This 
leads to a shift in dollars from distressed communities to less 
distressed communities.
    Other variables like poverty are good measures but they 
create some anomalies such as college towns getting large 
grants because of the large number of students that are counted 
in poverty and the growth lag variable which generally targets 
places that are losing populations. There are some well off 
communities that have been static in population since 1960 that 
get significant grants as well.
    The other problem is that this is a dual formula. A dual 
formula creates some anomalies in itself, funding similarly 
needy communities at very different amounts.
    As you are well aware, changing the CDBG formula to correct 
its targeting problem is politically challenging. If funding is 
held static or declining, a change in the formula that results 
in increases in funding for some communities also results in 
decreases for others. Fiscal year 2010, however, offers a rare 
opportunity to change the CDBG formula without causing a 
funding decrease for any community relative to the fiscal year 
2009 allocations. This is because for fiscal year 2010 
President Obama has proposed to fully fund CDBG at $543 million 
more than the amount funded in 2009. This gives us an 
opportunity to implement a hold harmless provision.
    Thank you.
    [The prepared statement of Mr. Richardson follows:]

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    Mr. Clay. Thank you. Mr. Moulds.

                   STATEMENT OF DONALD MOULDS

    Mr. Moulds. Good afternoon, Chairman Clay, Ranking Member 
McHenry, and distinguished members of the subcommittee. Thank 
you for the opportunity to appear before you today to discuss 
the topic of how data from the U.S. Census Bureau are used by 
the Department of Health and Human Services in the allocation 
of Federal program funds through formula grants.
    HHS is the U.S. Government's principal agency for 
protecting the health of all Americans and providing essential 
human services, especially for those who are least able to help 
themselves. We administer more than 300 programs covering a 
wide spectrum of activities and representing almost a quarter 
of all Federal outlays.
    HHS administers more grant dollars than all other Federal 
agencies combined and awards approximately 60 percent of the 
Federal Government's grant dollars. In fiscal year 2008, HHS 
awarded nearly $265 billion in grants representing 38 percent 
of total Departmental spending. The Centers for Medicare and 
Medicaid Services awarded the largest amount of grant dollars 
and the National Institutes of Health awarded the largest 
number of grants.
    For most of the formula grants administered by HHS, the 
grant allocation formula and data elements are specified in 
statute. Attached to my written statement is a table listing 
the HHS-sponsored grants that specified the used of data from 
the Census Bureau in allocating grant funds.
    I would like to highlight a few examples of how HHS uses 
specific census data elements in grant programs. They are 
representative of a variety of grant programs administered by 
HHS as well as the types of census data that are used in 
calculating grant award amounts in carrying out statutory 
intent.
    The first is the Child Care and Development Fund, which is 
the primary Federal program specifically devoted to providing 
families access to child care and improving the quality of 
child care. Grants are awarded to States through three 
component funding streams, two of which rely on the use of 
Census Bureau data in their funding formulas. One allocates 
block grant funding to States using a formula that includes the 
State's share of the Nation's children under five. The other 
awards funding to eligible States based on their share of the 
Nation's children under age 13. Data for both children's ratios 
are obtained from the Census Bureau.
    The Congregate Nutrition Services and Home-Delivered 
Nutrition Services programs provide meals and related 
nutritional services to older individuals to help them remain 
independent and in their communities. Grants for Congregate 
Nutrition Services and Home-Delivered Nutrition Services are 
allocated to States and territories by a formula based on their 
share of the population aged 60 and over using data issued by 
the Census Bureau.
    The mission of the Maternal and Child Health Block Grant is 
to improve the health of mothers, children, and their families 
by improving access to health care, eliminating health 
disparities, and improving the quality of health care. Funding 
for one component of this program is allocated to States in 
proportion to their population of low income children relative 
to the Nation's. The formula uses census data.
    The majority of HHS's grant allocations, however, are not 
driven by Census Bureau data. For example, over three quarters 
of mandatory grant funds awarded by HHS are received by States 
through the Medicaid program. Census data are used by the 
Bureau of Economic Analysis but not by HHS to produce State and 
national per capita income data, which then are used in 
calculating the Federal Medical Assistance Percentage [FMAP]. 
State spending on covered Medicaid services is matched by the 
Federal Government at the FMAP rate.
    The authorizing statues that specify funding allocation 
formulas for HHS grant programs typically specify the use of 
either the decennial population figures or the most recent 
population estimates from the current Population Survey 
published by the Census Bureau. The statutory formulas do not 
direct the Department to use the census data that have been 
adjusted for population under-count and HHS does not make any 
adjustments of its own.
    In summary, HHS uses a variety of data from the Census 
Bureau in calculating funding levels for Federal grant 
programs. Of the 300 programs administered and managed by the 
Department of Health and Human Services, 50 are grant programs. 
Of them, census data are used to calculate funding levels in 
35. Census data are used by HHS in all cases where authorizing 
legislation dictates its use and the manner in which it is to 
be used. HHS does not exercise any discretion to adjust funding 
formulas.
    Thank you for the opportunity to testify. I would be happy 
to answer any questions you might have.
    [The prepared statement of Mr. Moulds follows:]

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    Mr. Clay. Thank you, Mr. Moulds, for your testimony. Mr. 
Kerachsky, you are recognized for 5 minutes.

                 STATEMENT OF STUART KERACHSKY

    Mr. Kerachsky. Chairman Clay, Ranking Member McHenry, and 
distinguished members of the subcommittee, thank you for the 
opportunity to appear before you today to discuss the topic of 
the use of Census Bureau data in the allocation of Federal 
formula funding of the Department of Education's programs.
    Since the mid-1960's, the National Center for Education 
Statistics has computed or provided data to other entities 
within the Department to compute Federal funding allocations of 
various Department formula grant programs. We prepare the 
allocation tabulations in a statistically accurate and 
apolitical manner.
    Most allocations for the Department's elementary and 
secondary education programs are based on the latest data for 
some relevant subset of the population. In 2009, of more than 
$50 billion that the Department of Education is spending on 
elementary and secondary education, approximately 80 percent is 
being allocated based on census calculations of population 
subgroups. Let me provide examples.
    The Elementary and Secondary Education Act of 1965 Title I 
grants to local education agencies is the single largest 
Federal elementary and secondary education program. For fiscal 
year 2009, Congress provided $24.5 billion for this program. 
From its inception, Title I's formula has been based primarily 
on the number of children ages 5 through 17 and families with 
incomes below the poverty level.
    In the spring of each year, NCES renews its interagency 
agreement with the Small Area Income and Poverty Estimates 
Branch of the Census Bureau to develop and to deliver to the 
Department school district-level Title I poverty and population 
estimates. These estimates cover most of the Nation's public 
school districts.
    Before publication, census provides the estimates to State 
agencies and gives States an opportunity to review the 
estimates and challenge them. This so-called challenge period 
allows States to present information regarding boundary changes 
that may need to be updated in the Census Bureau's geographic 
data base.
    Second, since the mid-1970's, NCES has provided assistance 
for calculation of career and technical education allocations 
under the Perkins Act. The population groups used in the 
formula have remained consistent throughout the years, ages 15 
to 19, 20 to 24, and 25 to 65, from the census's annual State 
population estimates. States' allocations are based on their 
shares of the count for each of the three age groups multiplied 
by a factor based on per capita income, which we currently 
obtain from the Commerce Department's Bureau of Economic 
Analysis.
    Next, the eligible groups for Adult Education State Grants 
have traditionally consisted of those who are aged 16 and over, 
do not have a high school diploma or equivalent, and are not 
currently enrolled in school. Until 2006, these data were 
available only from the decennial census. The Census Bureau 
will now collect these data using the American Community 
Survey, the ACS.
    Finally, the Individuals with Disabilities Education Act is 
the law authorizing funding for services to individuals with 
disabilities throughout the Nation. Under Part B, Section 619, 
services must be provided to children with disabilities between 
the ages of three through five. Under Part B, Section 611, 
services must be provided to children with disabilities between 
6 and 21. Each of these formulas requires annual population and 
poverty data of 3-through 21-year olds. These come from the 
Census Bureau's annual Population Estimates and the ACS 
respectively.
    By statute, the Department accepts the Census Bureau's data 
and does not question the incidents of over- or under-counts. 
We understand that to the extent feasible, the Census Bureau 
adjusts post-censal annual population estimates, small area 
estimates, and ACS data for known shortcomings in the prior 
decennial census. It is also our understanding that the annual 
estimates used in our formula grant allocations are informed by 
recent demographic changes that might affect the distribution 
of funds.
    In summary, these examples cited illustrate how the 
Department of Education uses the array of Census Bureau 
tabulations to distribute our formula grant funds. We have a 
history of more than 30 years cooperating with the Census 
Bureau to provide the data needed for the U.S. Department of 
Education grants.
    Thank you for the opportunity to testify and I would be 
pleased to answer any questions.
    [The prepared statement of Mr. Kerachsky follows:]

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    Mr. Clay. Thank you very much, Mr. Kerachsky. Thank you 
all. I thank all of the witnesses for your testimony today.
    We will begin the question and answer period now. Each 
Member will have 5 minutes to ask questions of the panel. I 
will begin.
    This first question is a panel-wide question. I guess it 
would have to be the last three to answer and Mr. Goldenkoff 
may have to answer, too. Do your formulas account for the 
under-count that always occurs in certain communities? Should 
they account for that? If they should or shouldn't, tell me 
why. Mr. Richardson, we can begin with you.
    Mr. Richardson. The sample data that is used in most of our 
formulas are the published sample data. So most of our 
variables for our formulas are based on the census sample data. 
To the extent those are adjusted, and generally they aren't, 
our formulas are driven by those. One exception is in the CDBG 
formula with the population variable and the growth lag 
variable, which are indeed changed each year to reflect the 
published population estimates. If those are challenged 
estimates, we include those.
    Mr. Clay. Mr. Moulds.
    Mr. Moulds. We are statutorily required to use the most 
recent census data in the vast majority of cases. There are no 
instances where we adjust. It is our view that statute requires 
us to do that.
    Mr. Kerachsky. We are similarly statutorily required to use 
the census data. But in addition, we wouldn't have a firm basis 
to adjust the data on our own, would we have the statutory 
authority to do so. We are only able to use what is presented 
to us by the Census Bureau as the best available data.
    Mr. Clay. Thank you. On that point, and we will start with 
you, do the yearly census estimates adequately adjust formula 
funding to make up for the discrepancies that result from the 
under-count?
    Mr. Kerachsky. I really can't answer that. Where we are 
allowed to use those data, and we do in some instances, our 
statisticians just simply don't have the basis to make that 
interpretation.
    Mr. Clay. But when census sends you data, don't you adjust 
for that?
    Mr. Kerachsky. Yes. We have formulas that allow us to use 
the post-censal data and we do use them in those instances. 
Yes.
    Mr. Clay. All right. How about you, Mr. Moulds?
    Mr. Moulds. Again, we don't use any adjusted data. We just 
use census data. We similarly wouldn't be in a position to 
comment on the accuracy of that data because we are not in the 
business of counting people. That would be a question that is 
probably better suited for others.
    Mr. Clay. But when data are adjusted and when data are 
corrected, don't you have an interest in getting it correct, 
too?
    Mr. Moulds. Clearly we have an interest in having 
population figures that are as accurate as possible. But again, 
we are not statutorily allowed to make those adjustments 
ourselves.
    Mr. Clay. Common sense would say do the right thing by 
adjusting the data, correct?
    Mr. Moulds. It is our view that the law tells us that we 
are required to use the actual census data. So if there were to 
be changes in how that data would be collected, those would 
have to be statutory changes that would be done by Congress.
    Mr. Clay. Or adjusted data that come in on an annual basis.
    Mr. Moulds. The annual adjusted data that come through that 
is produced by the census, we do use. I am sorry for the 
confusion.
    Mr. Clay. Mr. Richardson.
    Mr. Richardson. Well, as I noted, we do use the data that 
are adjusted for population and growth lag in the CDBG formula. 
With the American Community Survey, which we will be rolling 
that into our formula starting in fiscal year 2011. To the 
extent that census updates those numbers to reflect the current 
population estimates and any challenges that are brought 
against those population estimates, we would include those in 
our formulas going forward as we use the American Community 
Survey.
    Mr. Clay. OK. Then how do we make up for the funding 
discrepancies once you get new data? Do you adjust your 
formulas for the new data and new population like in the case 
of Toledo?
    Mr. Richardson. Actually, the CDBG formula is an unusual 
formula in that it is one of the few formulas where if you have 
a declining population you actually get more money for having 
fewer people. It is an unusual formula in that way.
    That was the case with Toledo, which successfully 
challenged its population estimates. By successfully 
challenging its population estimates, we rolled in that 
challenge. Because Toledo was receiving money because of how 
many people it had relative to 1960, when that number 
increased, it led to a smaller CDBG grant.
    The CDBG funds are intended to serve communities in 
decline. Communities that have lost a lot of population get 
substantially more than communities that have gained 
population.
    Mr. Clay. That CDBG formula can be changed here in Congress 
or by the Agency?
    Mr. Richardson. It is in statute and it has to be changed 
by Congress. President Obama's fiscal year 2010 budget proposal 
is proposing that formula actually be updated and be changed. 
We are looking forward to working with the Congress on that.
    Mr. Clay. Mr. Goldenkoff, did you have anything?
    Mr. Goldenkoff. I think, to the extent that these formulas 
compensate for the under-count, it all depends on the approach 
used to correct the data. As Mr. Mesenbourg said, the census 
data are updated throughout the decade but those updates are 
largely the result of administrative records. The extent to 
which those administrative records capture those people who 
tend to be historically under-counted, the better quality data. 
But that is an open question on how good those administrative 
records are.
    I think it is important to keep in mind that no census has 
ever been actually adjusted using statistical means to 
compensate for the differential under-count or any under-count. 
So as we have been saying, the accuracy of all these post-
censal estimates really starts with the quality of the 
decennial census. To the extent that there has always been an 
under-count and that under-count has never been adjusted, that 
affects the data going forward.
    Mr. Clay. Thank you for that response. Mr. McHenry, you are 
recognized.
    Mr. McHenry. Thank you, Mr. Chairman. Thank you all for 
your testimony.
    Mr. Mesenbourg, although the focus of this hearing is 
obviously with the American Community Survey and the data put 
out in the funding formulas in that regard, we haven't had you 
back since address canvassing was finished. Our staffs have 
been briefed from your folks at the Bureau. We thank you for 
that. I know you had a pretty strong assessment of how well it 
went. I know the GAO has a less rosy assessment. But could you 
touch on your view of how successful the address canvassing 
was?
    Mr. Mesenbourg. Certainly. We view it as a very successful 
undertaking. As you recall, a year ago there was much angst 
about our ability to make the handheld computers work. We did a 
lot of testing in December and prior to the address canvassing.
    We actually started in eight of the local census offices a 
week early. We also, rather than doing it in two waves as 
originally planned with waves of about 5 weeks each, we split 
that into five different waves and we started it in most of the 
local census offices at the same time. The result of that is we 
were pretty well 99 percent done with this nearly a month ahead 
of schedule.
    The areas that we had to wrap up had to do with areas that 
had flooding like the Red River. We had mud slides in Puerto 
Rico. We had a tornado in Kentucky. In fact, our finish date is 
July 17th. We have three assignment areas that we are 
completing right now. They are in Jackson, Mississippi, which 
faced flooding. We will complete those. In fact, we are 
helicoptering canvassers into that area because, once they can 
get into that area, they can actually walk the streets. They 
will finish that operation this week.
    So I see it as a very successful operation. We are doing 
lessons learned as a result of that.
    We had great success recruiting. The goal was to recruit 
about 700,000 folks to fill 140,000 jobs. We had 1.2 million 
applicants for those 140,000 jobs. So we probably had the most 
highly skilled work force that we have had on a decennial 
census and that was huge for us.
    Mr. McHenry. Are you on budget?
    Mr. Mesenbourg. Right now we have run about 15 percent over 
budget. A good amount of that--we are doing a detailed 
analysis, as you would expect, right now--was because we went 
into the address operation with an assumption that we would 
have 10 percent of the addresses be deletes, that we would go 
to there and we would actually remove them from the list. We 
don't have the final number on that but it is more like almost 
double, a little less than double of that.
    What that means is we are going to error in the direction 
of keeping an address on the address list rather than removing 
it. So if we have an address that we leave as delete, we are 
going to send an additional person out to verify that. That 
requires more mileage, more effort, and more enumerator time. 
We expect that most of that will be associated with the 
underestimation of the deletes.
    Mr. McHenry. We have had a lot of discussion about the 
handheld computers. Do you believe they worked?
    Mr. Mesenbourg. Yes. I believe they worked effectively. We 
had some glitches during the first startup operation. Most of 
those were associated with getting enumerators in touch with 
the help desk. But originally we were assuming something like a 
30 percent volume for help desk. It turned out to be much less 
than that. We had about a week of shakiness there but the 
handhelds performed well.
    Mr. McHenry. Mr. Goldenkoff, what is GAO's initial survey 
of how well address canvassing went?
    Mr. Goldenkoff. I think it is too early at this point to 
make any blanket statements about the overall success of 
address canvassing. I think you need to parse it out to 
different components.
    As you know, there was a lot of concern over the handheld 
devices. As Mr. Mesenbourg said, there were some initial 
glitches but the Census Bureau did an excellent job in 
overcoming those with workarounds. We were out in the field in 
about 30 different locations. I myself was out in Meridian, 
Mississippi and also New Orleans so I saw some of this myself. 
The handhelds really were very effective in helping the address 
canvassers figure out where they were and to not go over 
boundaries or into other areas. So that was a positive story.
    They also finished largely ahead of schedule, which was 
good news. One of the things that we are looking at there, 
though, was whether quality was sacrificed at the cost of 
speed. So we are looking into that.
    In terms of some other things, though, that perhaps could 
have gone better, Mr. Mesenbourg said they are over budget. 
Fingerprinting, as you know, that was an issue and is something 
that we have been looking at pretty closely. About 23 percent 
of the fingerprint cards were unreadable. My understanding is 
that those individuals whose cards could not be read or scanned 
by the FBI--so they had an initial applicant name check but 
they did not have their fingerprints reviewed by the FBI--were 
still allowed to work. So there is a security issue in that, of 
course. There is also cost, too, because basically the money 
that was spent on those fingerprints and having them reviewed 
by the FBI just went to waste.
    There were some transmission issues with the cell phone 
service in rural areas. It was not a major issue but it did 
affect some of the efficiency of the address canvassers.
    Recruiting went well. They had a very good quality work 
force, very conscientious. I think all of the GAO folks that 
were in the field were very impressed with how hard and how 
conscientiously the temporary workers did there jobs.
    So at this point, as I said, it is just too early to make 
any comprehensive or overarching statements. But we will be 
looking at each of those different components as we move 
forward.
    Mr. McHenry. Thank you.
    Mr. Clay. Thank you, Mr. McHenry. Ms. Kaptur, you are 
recognized for 5 minutes.
    Ms. Kaptur. Thank you. Thank you, Mr. Chairman, very much. 
I really appreciate being able to participate today. Thank you 
for your leadership.
    Mr. Mesenbourg, I wanted to ask you if the Census Bureau is 
aware of such communities as Toledo, OH that have suffered 
under-counting of their populations in previous years. We have 
seen what has happened in the New Orleans region.
    One of my concerns is the rising and extraordinary level of 
housing foreclosures. In these foreclosure regions like Toledo 
and obviously the New Orleans area and others, what is the 
Census Bureau doing to offer additional financial support or 
assistance training personnel that could help these types of 
communities that have been so damaged by the economy or natural 
circumstances to achieve a proper count of their populations? 
It isn't clear that these individuals who are being foreclosed 
on are leaving their communities?
    Mr. Mesenbourg. I would be glad to talk about that. Perhaps 
I should just take a second to talk about the Population 
Estimates Program and the challenge program.
    As we described before, at the national, State, and county 
level, basically we are starting with the census 2000 count. 
Then we are adding in births and subtracting deaths for that 
location, and then doing an adjustment for migration, both 
international and domestic. So for someone that immigrated into 
the United States from Europe or wherever, we use the American 
Community Survey to do that. We also look at migration within 
States and within counties, across counties, and we use the IRS 
data typically to do that. That is what we call the ADREC data 
and we believe that methodology is performing very well.
    At the sub-county level, for example for Toledo, what we 
would use is the housing unit method. So we would start with 
the estimate of the number of housing units in Toledo in 2000. 
Then we take what the occupancy rate was in 2000 and what the 
persons per household was in 2000, and we also have an 
adjustment for group quarters. Right now, the Population 
Estimates Program for this sub-county level data is using the 
census 2000 average persons per household and the census 2000 
occupancy rate.
    I can give you an example for Flint, MI of what the impact 
is of this methodology. Our 2008 population estimate for Flint, 
MI is 112,900 individuals. In the challenge method, people come 
in and tell us they have additional housing units. When they do 
that, we use the census 2000 average per persons per household 
and we use the occupancy rate. So, for example in Flint, the 
occupancy rate in census 2000 was 81.9 percent. From our most 
recent American Community Survey, which is the 3-year estimate 
spanning 2005 through 2007, the occupancy rate is 78.5 percent. 
By using the existing challenge method, which uses census 2000, 
we would have estimated a population growth in Flint of 9.3 
percent. If we actually updated that persons per household and 
the occupancy rate using the most current data, Flint would 
have had a reduction of 6.4 percent.
    So what I want to clarify is the challenge process. We 
invite any locality to challenge. Typically, of the 39,000 
jurisdictions that we publish data for, about 100 ask for a 
challenge proposal package and about 64 actually challenge. 
When they challenge, if they can come in and demonstrate to us 
that they have additional housing units, then we will go back 
and use the census 2000 persons per household and the census 
2000 occupancy rate.
    Given, as you are talking about Congresswoman, the decline 
in occupancy rate, the challenge biases the population 
estimates up. So if we flash forward a year or two, we probably 
do not want to be using the 2010 average persons per household 
or the 2010 occupancy rate. So this is one of the things that 
we have on our research agenda, to look at the housing unit 
estimate component, which is sub-county, and to also take 
another look at the challenge process itself.
    Now, what are we doing to improve the count? We are going 
to spend over $300 million on paid advertising with a huge 
increase in the advertising that goes into the local areas. 
Probably the biggest single thing we are going to do is we are 
going to have nearly 2,900 partnership specialists working in 
our local offices. We will have nearly 500 local census offices 
scattered across the United States.
    In census 2000 we had about 600 people reaching out to 
local organizations. This time it is more like 2,900. So they 
are the folks, they are the trusted voices that we want to be 
in Toledo to convince the Mayor to convince others to form a 
Complete Count Committee. We will work with you to improve that 
count. In brief, that is what we are doing.
    Ms. Kaptur. Mr. Chairman, I am sure my time has expired but 
in a community like Toledo, over 12 percent of our housing 
stock is now foreclosed and the rate is rising. I was in a 
neighborhood in Cleveland, OH, now declared the poorest city in 
America over the weekend, we were in Slavic Village, a 
neighborhood where they claim 75 percent of the homes have been 
foreclosed. I just wonder, when you go door to door and when 
you send out material, how you really find the people that used 
to live in those homes.
    Mr. Mesenbourg. So what we have done through the address 
canvassing is identify all of the addresses. If it exists, it 
is on the address list. We did not attempt to make a 
determination whether it was occupied or vacant because 
obviously that could change by April 2010. We think we have 
done a good job in terms of identifying the addresses.
    What we are doing is taking a look at our procedures for 
the non-response followup. You are 100 percent correct. If that 
is a vacant housing unit and we mail out a census form, we are 
not going to get a census form mailed back. So starting May 1, 
2010, we are going to send an enumerator out to knock on that 
door. In some cases it is obvious that is a vacant housing 
unit. In other cases, it is not so obvious. In some cases, 
maybe someone else is living there or multiple families are 
living there.
    We know that is going to be a challenge. That has to be 
part of our communication message to get trusted voices. If 
someone is doubling up in a housing unit, they need to actually 
report that accurately. If they don't, we will miss people.
    Mr. Clay. Just on that point, Ms. Kaptur, I would hope that 
the Bureau's research would bring to light that there may need 
to be different methodologies in this era of housing 
foreclosures and post-Katrina.
    I was down in New Orleans for the address canvassing. 
Believe you me, the enumerators do not have an easy time. They 
have to go up to buildings that may look vacant but there are 
electric wires going into the buildings so perhaps there is 
someone living there. They have to keep coming back day after 
day to figure it out. So their task is not easy either.
    Hopefully the research will bring us a new methodology.
    Ms. Kaptur. Thank you, Mr. Chairman. I know that we will 
have between 10 million and 20 million people in this country 
whose homes will be foreclosed by next year. That is a shocking 
figure.
    Mr. Clay. But the people are somewhere, though.
    Let me go to our colleague from Georgia, Mr. Westmoreland. 
You are recognized for 5 minutes.
    Mr. Westmoreland. Thank you, Mr. Chairman.
    Mr. Mesenbourg, I want just to clarify that. You can't do 
the 2010 census based on where people are living in 2009, 
correct?
    Mr. Mesenbourg. That is correct.
    Mr. Westmoreland. You have to wait until you send the forms 
out in 2010?
    Mr. Mesenbourg. That is correct. The address canvassing has 
been to build as complete a list of housing unit addresses as 
we can. Then that is the vehicle to help us deliver report 
forms.
    Mr. Westmoreland. That is being done with the handheld 
computers, correct?
    Mr. Mesenbourg. That was done with the handheld computers.
    Mr. Westmoreland. In prior testimony that you have given in 
front of this committee, you stated that a lot of the data that 
you get does come from local city and county governments. Is 
that correct as far as housing starts, permits, births, and 
deaths?
    Mr. Mesenbourg. Well, the construction information will 
come from the local government permit office. Information on 
births and deaths come from the vital record agencies, not from 
the local government.
    Mr. Westmoreland. But you do get some information from 
local governments?
    Mr. Mesenbourg. Certainly, in terms of the updates to our 
construction program and new construction activity. So any 
construction that has occurred since we finished address 
canvassing near the end of June and before we do the census, we 
will be getting building permits flowed to us from local 
governments. We will have an opportunity to send an enumerator 
out to actually collect information from those new units. That 
will happen in late July and August 2010.
    Mr. Westmoreland. Mr. Mesenbourg, you say that you have 
been at the Census Bureau for 36 years. Is that correct?
    Mr. Mesenbourg. That is correct. Maybe it is almost 37.
    Mr. Westmoreland. So this is not your first rodeo when it 
comes to the census. Would you say that the process of doing 
the census has gotten better over the years?
    Mr. Mesenbourg. I think it has become more challenging if 
we look at just the diversity in terms of additional languages 
and the recent economic problems that the Nation has faced. I 
think it is clear that this is going to be one of our most 
challenging censuses.
    We feel we have the procedures in place to conduct a 
successful census but we believe our partnership program 
especially is key to deliver that message, to mobilize the 
communities. I think we have all been very impressed by the 
energy of the different constituencies and how committed they 
all are to making this a successful census. I think having 
nearly 2,900 partnership specialists in the field is going to 
be key for us to connect with local areas. Of course, we will 
hire locally also. That is a key strategy.
    Mr. Westmoreland. Just to go back over a little bit of your 
Population Estimates Program, it is my understanding that you 
start off with the decennial number or the census.
    Mr. Mesenbourg. The census count, right.
    Mr. Westmoreland. Then you add births and subtract deaths, 
is that true?
    Mr. Mesenbourg. That is true.
    Mr. Westmoreland. Then I guess for the internal migration, 
let us say somebody moves from Patrick's district to a good 
congressional district in Georgia--[laughter.]
    What kind of data would you use to track that?
    Mr. Mesenbourg. For the population that is under 65, we use 
the IRS tax data to do that year to year movement. That has 
about 80 percent coverage of the population. For the population 
65 or older, we use the Medicare information. We use that 
address information on that.
    Mr. Westmoreland. OK, so that is kind of your formula for 
coming up with that. Now, how about the American Community 
Survey? Can you kind of explain how you use that?
    Mr. Mesenbourg. Well, the American Community Survey is the 
replacement for the old long form. In 1990, 2000, and previous 
censuses, one in six households got a long form. And it was 
long. It was over 50 pages. That was the source of all the 
social, economic, and household information. We have replaced 
that once in a decade long form survey with the American 
Community Survey.
    The American Community Survey samples about 250,000 
households a month and then publishes data annually. In 
September, probably September 22nd, we will produce the 2008 
estimates for all jurisdictions with a population of 65,000 or 
more. Then in December, we will produce the 3-year estimate, 
which will be 2006, 2007, and 2008, for all jurisdictions with 
a population over 20,000. Next December will be the first time 
we produce the 5-year estimate and that will go down to the 
very smallest geographic areas.
    So it is really the primary source of the social, economic 
data like poverty statistics, income, information on 
disabilities, and so on.
    Mr. Westmoreland. I have one final question, if I could, 
Mr. Chairman. I know that the population estimates that you 
have had, at least from the numbers that I have seen, that over 
the past three decades you have been really I guess plus or 
minus about 2.5 percent of the decennial number. Is that 
correct?
    Mr. Mesenbourg. That is correct. In 1990 and 2000, it was 
about 2.5 or 2.4 percent under the census number.
    Mr. Westmoreland. In 1 year it was over?
    Mr. Mesenbourg. I think both years it was under but I can 
double check that.
    Mr. Westmoreland. Both years were under a little bit? OK. 
But 2.5 percent based on the information you are getting is 
pretty darn close. I want to commend you and the people at the 
Census Bureau for the job you have done.
    I yield back, Mr. Chairman.
    Mr. Clay. We will do a second round of questioning with 
this panel. I will start with Mr. Mesenbourg.
    Tell me how does the Census Bureau notify other Federal 
departments of changes in population?
    Mr. Mesenbourg. Well, we produce the population estimates 
on a regular schedule. Let me just use the 2008 population 
estimate. So in December 2008, we provided the national and the 
State population estimate for 2008. In March 2009, we produced 
the county-level population estimates. Then, as of July 1st, we 
produced the sub-county level. So we just put those statistics 
out in the last couple of weeks.
    Mr. Clay. You share that with Federal agencies?
    Mr. Mesenbourg. It is on the Web site and I think all of 
the agencies that are using population estimates data in their 
formulas are very familiar with the release schedule.
    Mr. Clay. OK. Mr. Mesenbourg, along those same lines, is 
there a plan afoot to put a moratorium on the census challenge 
program?
    Mr. Mesenbourg. Well, the sub-county data, using our 
schedule, would come out in July 2010, basically a year from 
now. So we will put a moratorium on the 2009 challenges because 
by the time we would evaluate and produce those data, 
information from the 2010 census will be produced at the State 
level no later than December 31, 2010.
    Mr. Clay. So we are talking 6 months? How long will the 
moratorium last?
    Mr. Mesenbourg. Let me be clear. There will be no challenge 
process on the 2009 estimate because by the time we would act 
on it, we will have better 2010 census data. Now, when we come 
to calendar year 2010, then we have the estimates from the 
decennial census so we do not produce public estimates of the 
population estimates for 2010. The census counts stand as the 
count.
    Mr. Clay. Thank you so much for that response.
    Let me go to Mr. Richardson. Mr. Richardson, I and many 
others have concerns about the design of formulas that correct 
the under-count and result in an increased number in the 
population count yet and yield fewer moneys to the 
municipalities because of the increase. This is the result of 
applying a mechanism called a growth lag. The growth lag is to 
assist areas with stagnant population growth. Low income areas 
normally have population growth and wealthier areas tend to 
have fewer children and more stagnant growth.
    Can you show me where the benefit of having the growth lag 
applied to these under-counts counteracts the loss of funds in 
these poorer areas that seemingly would need the funding more?
    Mr. Richardson. I think that is an excellent point. The 
growth lag variable in the CDBG formula was developed in the 
1970's to try to address the needs of a lot of communities at 
that time that were facing significant population loss due to a 
number of factors. The formula was put into statute and has not 
been changed.
    HUD has done a number of studies looking at the different 
variables, including growth lag, and how well they target the 
need. Growth lag does have the problems you note. Communities 
that are relatively well-off communities that have had 
populations that stayed the same or gone down even because of 
smaller household sizes, they get substantial grants under the 
Community Development Block Grant Program, as do other 
communities that are seriously distressed. Saint Louis, 
Detroit, and Toledo get substantial amounts of funding because 
they have lost population since 1960.
    In the studies we have done, there are recommendations on 
how that could be fixed to make the formula so that it doesn't 
create these anomalies and so it ensures that the money is 
directed to the communities that most need it. As I noted 
earlier, President Obama in his 2010 budget proposal has 
indicated a desire to work with the Congress to try to make the 
changes to make this formula target better.
    Mr. Clay. Yes. Let us begin by you sharing those studies 
with the subcommittee.
    Mr. Richardson. Absolutely. We will provide you a copy of 
that study. In fact, I have one with me. I can leave that with 
your staff.
    Mr. Clay. Thank you so much.
    I will recognize my colleague from North Carolina, Mr. 
McHenry.
    Mr. McHenry. Thank you, Mr. Chairman. Mr. Mesenbourg, there 
has been some discussion about Hurricane Katrina. It was 
devastating and still is a devastating event for the Gulf 
Coast. Some parts of the Gulf Coast region still haven't 
recovered. The chairman discussed the difficulties of the 
address canvassing there.
    But to look at how devastating that was, it was obviously a 
horrible event for the people of the Gulf Coast, but to look at 
the data that the Census Bureau produced, I have given you two 
tables, Table 1 and Table 2, that come from your Bureau. One is 
about East Baton Rouge Parish and the other is about Orleans 
Parish. New Orleans and Baton Rouge, in essence. These are your 
population estimates for those two counties. You can see the 
massive loss of population in Orleans parish and the uptick in 
East Baton Rouge. It is obvious to deduce that some moved to 
East Baton Rouge. In Table 2, you actually determine where 
people migrated from, too.
    Could you talk about a study by three people that work for 
you, Roger Johnson, Justin Bland, and Charles Coleman, who 
tracked the dislocation of people as they left the path of 
Katrina and the aftermath?
    Mr. Mesenbourg. Certainly. Of course, Katrina posed real 
challenges to the population estimates. I talked about how at 
the county level we start with census 2000, add births, 
subtract deaths, and then use the tax records and the Medicare 
records to try to estimate migration. One of the first things 
that happened post-Katrina is that the IRS provided I think it 
was a 6-month extension in terms of filing taxes. It was clear 
that we had to come up with a different way of tracking that 
migration.
    What we did is we availed ourselves of the Postal Service 
National Change of Address record. We identified all the 
housing units and the individuals pre-Katrina. Then, using this 
postal change of address, we found out where they moved to. 
They not only moved, of course, within Louisiana. They moved to 
Houston. They moved to Atlanta.
    The study you referred to, Congressman McHenry, basically 
shows large maps of exactly where all of those people that we 
identified pre-Katrina, where they ended up.
    I guess I would see that as a demonstration that when faced 
with real challenges, the staff can come up with a way to 
produce the data. We knew we needed to do something there.
    Mr. McHenry. Are there additional administrative data that 
you used aside from the Postal Service or was that the crux of 
it here?
    Mr. Mesenbourg. It was primarily this National Change of 
Address record. Once we found out where the people had actually 
moved, then we could also leverage the other administrative 
record data. But the real challenge was to find out where they 
had migrated to from New Orleans.
    Mr. McHenry. OK. That is the Table 2. I am sorry we don't 
have it for the screens. Unfortunately, the screens are not 
working today.
    How confident are you in these estimates?
    Mr. Mesenbourg. Quite confident. I think they have been 
vetted by folks. Given the extraordinary challenges that the 
New Orleans area faced, I think this is about as good a job as 
an agency can do in terms of tracking those individuals.
    Mr. McHenry. OK. Has the Mayor of New Orleans quibbled with 
the data?
    Mr. Mesenbourg. I believe the Mayor has challenged the 
population estimate. That is not unusual. As I say, we 
typically have about 65 primarily larger cities that challenge 
the estimate.
    Mr. McHenry. So it is a pretty regular occasion?
    Mr. Mesenbourg. It is a very open procedure to challenge. 
If jurisdictions have the data to support an increase in their 
number of housing units, then typically they are going to win 
the challenge process.
    Mr. McHenry. Oh, I see. So you do incorporate that on a 
regular basis?
    Mr. Mesenbourg. Yes.
    Mr. McHenry. OK. Additionally, is it more difficult to 
track race and ethnicity following Katrina? Is that an 
additional challenge because of using different administrative 
data? Or is it hard to say?
    Mr. Mesenbourg. I don't want to give you the wrong answer. 
We provide the race data at a certain level. We do produce the 
race information at the county level. I am confident in it at 
that level. We do not produce the race data at the sub-county 
level. It is the total population that we are producing there. 
So for Fulton County, we would be confident in that number.
    Mr. McHenry. Thank you, Mr. Chairman.
    Mr. Clay. Thank you, Mr. McHenry.
    This panel will be dismissed and we will set up for the 
second panel. Thank you all for your testimony today.
    [Recess.]
    Mr. Clay. The meeting will come back to order. We will now 
hear from our second panel.
    Our first witness will be Mr. Carleton Finkbeiner, who is 
the mayor of Toledo, OH. As Mayor of Toledo, he has helped 
bring new living opportunities to the downtown area. The Mayor 
is also active in the U.S. Conference of Mayors and was a 
national chairman of Rebuild America. Thank you for being here, 
Mr. Mayor.
    Next we will hear from Mr. Robert Bowser, who is the mayor 
of the city of East Orange, NJ. It is good to see you again. 
Welcome back. Mayor Bowser is the founder of the New Jersey 
Conference of Black Mayors and was selected as president in 
2003. He is also a member of the U.S. Conference of Mayors and 
is vice chair of the 2010 Census Taskforce.
    Our third witness, Mr. Arturo Vargas, is the executive 
director of the National Association of Latino Elected and 
Appointed Officials, a national membership organization of 
Latino policymakers and their supporters. He is a nationally 
recognized expert in Latino demographic trends, electoral 
participation, voting rights, the census, and redistricting. He 
currently serves on the 2010 Census Advisory Committee. Welcome 
back to the committee, Mr. Vargas.
    Our final witness is Mr. Jamie Alderslade. He is the 
director of external relations at Social Compact, a non-profit 
agency dedicated to fostering private investment in inner city 
communities. He works on projects that utilize asset-based 
information as a platform for consensus between local 
governments, investors, and communities to promote sustainable 
investment in the under-served urban neighborhoods. Welcome, 
Mr. Alderslade.
    Welcome to all of you. Thank you for appearing today before 
the subcommittee. It is the policy of this committee to swear 
in all witnesses before they testify. I would like to ask you 
to stand and raise your right hands.
    [Witnesses sworn.]
    Mr. Clay. Thank you. You may be seated. Let the record 
reflect that the witnesses answered in the affirmative.
    Each of you will have 5 minutes to make an opening 
statement. Your complete written testimony will be included in 
the hearing record.
    Mayor Finkbeiner, you may proceed with your opening 
statement.

 STATEMENTS OF CARLETON FINKBEINER, MAYOR, CITY OF TOLEDO, OH; 
 ROBERT BOWSER, MAYOR, CITY OF EAST ORANGE, NJ; ARTURO VARGAS, 
EXECUTIVE DIRECTOR, NATIONAL ASSOCIATION OF LATINO ELECTED AND 
APPOINTED OFFICIALS; AND JAMIE ALDERSLADE, DIRECTOR OF EXTERNAL 
              RELATIONS, THE SOCIAL COMPACT, INC.

                STATEMENT OF CARLETON FINKBEINER

    Mr. Finkbeiner. Thank you, Chairman Clay. I appreciate this 
opportunity a great deal.
    I have been mayor of Toledo for 12 years. My experiences in 
attempting to get an accurate count of Toledo during that 12 
year period of time have been rather frustrating. That we why 
we hired Social Compact on the recommendation of the Mayor of 
Cincinnati, Mark Mallory, where Social Compact had helped them 
significantly.
    I think I can speak today with perhaps as much knowledge as 
any Mayor coming before you, not because I am a Mayor but 
because I was a census leader in 1970 in Toledo, OH. I want to 
tell you what I learned from that experience.
    Many of my counters were elderly females. We began the 
census count in affluent, upper middle and middle class 
neighborhoods. My elderly enumerators felt very comfortable as 
they walked up and knocked on the doors of rather spacious, 
extremely well-kept, and trendy suburban-type households. My 
enumerators enjoyed themselves immensely.
    As the weeks progressed and my enumerators completed their 
tasks in these middle class neighborhoods, they methodically 
worked their way toward central city Toledo. As they did, their 
enthusiasm began to taper off. Their gusto for enumerating poor 
neighborhoods of significant diversity became really and 
readily apparent.
    With multiple story apartment buildings as part of their 
daily agenda, I began to lose my crew. Ultimately, of the three 
dozen members of my staff that began, one remained to tackle 
central city Toledo neighborhoods. Even though others were 
brought onboard, they did not have the same degree of training 
and enthusiasm my initial crews did. I began to worry about a 
serious under-counting of the poor, the disadvantaged, and men 
and women of color.
    In the 40 years that have gone by since, there are more 
poor people than ever living in the hearts of our cities, 
including Toledo. Some are homeless men and women. Some are 
regular visitors at the shelters that provide food on a daily 
basis. Others have been released from mental hospitals and seek 
counseling and medicines. These men and women cling to the 
heart of the city where assistance is available and they are 
able to fit in as opposed to looking extremely out of the 
normal in those suburban and middle class enclaves I mentioned 
earlier.
    Fast forward to my 12 years as Mayor. I asked my 
Neighborhoods Department staff to help me estimate how many 
Jane and John Does were being left uncounted. It is the John 
and Jane Does who need the help of the Federal Government as 
well as State and local governments, 501(c)(3)'s, and non-
profit agencies.
    If people are not counted because U.S. census workers are 
tentative at best as they count the central city, marching door 
to door, apartment to apartment, homeless shelter to homeless 
shelter, how can we ensure we are identifying all of our 
citizens?
    One thing I know for sure is that there are more men and 
women living in mobile housing unit conditions in bleaker 
environments and in growing numbers today than back in 1970 
when I had my experience. These men and women desperately need 
the help of our Federal Government and our Federal agencies. 
Our responsibility is to find out how to get each and every one 
of these men and women counted by the U.S. census.
    During the past few years, there have been numerous reports 
saying that the city of Toledo, as well as Lucas County, is 
losing population. In preparation for our 2010 census, the 
staff of the Toledo Planning Commission at my direction and 
with the help of Social Compact identified over 1,400 addresses 
previously not recorded on the U.S. Census Bureau's current 
address list. This confirmed my suspicion that there was a 
population under-count of housing units from 2000 to 2007 in 
the city of Toledo.
    In fact, the adjusted estimate meant that Toledo's 
population in 2007 was actually higher than in 2000, far from 
declining as had been consistently reported over several years. 
To the credit of the Department of Commerce and the U.S. Census 
Bureau, they acknowledged that Toledo had a population of 
316,851, some 21,822 more people than the U.S. Census Bureau's 
original 2000 population estimate. The date of that 
acknowledgment was January 9, 2009. I attach a copy of the 
letter.
    To my surprise, on June 2, 2009, I was sent a letter from 
HUD's Office of the Assistant Secretary for Community Planning 
and Development. It stated that as a result of Toledo's 
successful challenge, the city will actually be receiving 
$293,585 less in Community Development Block Grant funding in 
fiscal year 2009. A copy of that letter is also attached.
    CDBG entitlement community grants are a vital source of 
funding from HUD directly to Toledo. The ability to use the 
grants flexibly allows my administration the freedom to respond 
to the very specific housing and development needs of Toledo's 
low and moderate income communities. At a time when great 
efforts are being made to stimulate the economy, CDBG funding 
serves a vitally important role in that endeavor.
    Having successfully participated in the census challenge 
program, we expected to receive a larger allocation in CDBG 
funding, particularly because there are more poor men and women 
now moving toward the centers of our cities, including Toledo, 
than ever before. If there are more people in the city of 
Toledo, as confirmed by Federal Government, with increasing 
poverty and unemployment, and ours tops at about 12 percent, 
why would the city of Toledo's CDBG allocation be reduced? I 
can only conclude that the CDBG allocation formula needs to be 
addressed to rectify the situation facing the city of Toledo.
    In closing, the city of Toledo, regardless of current 
formula allocations, will continue to strive for accurate data 
for investment and planning purposes. We will continue to work 
cooperatively with our community and the U.S. Census Bureau to 
make sure every Toledoan is counted.
    Each human being is given a name at birth. Until death, 
they are to remain a concern of a caring society. Without a 
name or an identity, they may as well be condemned to death. 
None of us want that. Therefore, let us make sure every person 
is counted.
    I have one concluding comment. A death occurred in our 
community 48 hours ago. The man that died was 68 years of age. 
He had been a homeless man in Boston for about 15 to 20 years. 
He was born and raised in Toledo. He got some aid and 
assistance when he was in Boston and his family urged him to 
come back to the family home in Toledo. Fifteen years ago he 
returned. The last 15 years, that man has made such an impact 
on life in the neighborhood in which he lived. He still looked 
very skinny, very bearded, and very disheveled and he rode a 
bike everywhere. But that man was going to Board of Education 
meetings. He was going to Social Services meetings and Criminal 
Justice meetings. That man made such a difference.
    It was about 10 days ago that he unfortunately was knocked 
off his bike by a youngster and hit his head on the pavement. 
He was in a coma for 10 days. Our community came to a stop for 
10 days while Bob was in a coma in a hospital. He died 48 hours 
ago.
    That man was once homeless. Because he was identified as a 
real person as a result of the Boston metropolitan area Social 
Services people, he came back and made a very, very significant 
contribution to Toledo the last 15 years of his life. He will 
be deeply missed. That is why every man or woman needs to be 
counted.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Finkbeiner follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Mr. Clay. Thank you so much, Mr. Mayor, for your testimony. 
Mayor Bowser, you are recognized for 5 minutes.

                   STATEMENT OF ROBERT BOWSER

    Mr. Bowser. Good afternoon, Chairman Clay, Ranking Member 
McHenry, and members of the subcommittee. I am always glad to 
be in Washington to see where my money is going.
    On behalf of the city of East Orange, NJ, I urge all of our 
people to be counted in the 2010 census. Everyone's 
participation is vital to ensure our voices are heard in 
Congress. A complete count also almost guarantees our community 
would get its fair share of Federal dollars, which would mean 
money for schools, hospitals, roads, and social services. This 
count includes the homeless, the legal, and the undocumented. 
We are all entitled to the same services provided within our 
city. It is easy, important, and safe to participate. All of 
this information is confidential.
    To ensure an accurate count in the city of East Orange, we 
plan to engage our community with a team of people, 
coordinators and leaders of various ethnic backgrounds, who 
look like and speak the same language as the people we are 
counting.
    A complete and accurate count means a sustainable, better 
way of life for all people. Historically in the city of East 
Orange, we believe that the last two census counts were 
seriously flawed, resulting in an under-count in excess of 12 
percent.
    As a city, we rely on accurate population figures for all 
county, State, and Federal applications for grants and 
supplemental aid for many if not all programs. In this present 
economy, municipal government has to fight for and look for 
fiscal help wherever it is available. The census figures are 
the one common factor in all applications and the compelling 
argument for jurisdictions in need. We at the local level must 
meet our obligation to provide services and the opportunity for 
services for all our constituents.
    At this hearing, we were asked to comment on the impact of 
the under-count on funding formulas and how this would affect 
local communities. First, let me say that it is important to 
distinguish between concerns about funding formulas and the 
concerns about allocations under the formulas. The question of 
whether funding formulas are designed properly and whether they 
take into account the conditions Congress desires to address is 
separate from the question of the accuracy of the data used to 
allocate funds under the formulas.
    Without going into the details about CDBG funding, there 
are two formulas, A and B. Both of them rely on census data. 
When they are calculated, the formula, either A or B, that 
gives more justification for funds, that is the one that is 
used. Under these formulas, jurisdictions always receive more 
funds than the total amount available through appropriations. 
To bring the allocation within the appropriated amount HUD 
uses, they use a pro-rated reduction that may be different 
annually.
    If East Orange's population is not correctly calculated in 
the most recent census, the argument could be made that neither 
formula A nor B can be calculated accurately to allocate to 
this jurisdiction because 50 percent of formula A and 20 
percent of formula B rely on the accurate population count. 
Even if one formula is used instead of the other, an inaccurate 
census count could greatly impact East Orange's CDBG 
allocation, ensuring this jurisdiction receives less than the 
community needs.
    Also, the U.S. Department of Housing and Urban 
Development's formula calculations rely on several factors that 
are directly impacted when the U.S. Census Bureau under-counts, 
especially because in East Orange we also have a high number of 
house rentals and apartment units.
    Let me just give you a little information about the city of 
East Orange. We are only 3.9 square miles but 83 percent of our 
buildable land is residential. We were cut in half by the 
Garden State Parkway and then we were quartered by Interstate 
280. We are 15 miles from New York and we border six other 
towns or cities right along the city of Newark.
    The U.S. Conference of Mayors Metro Economies Committee 
reported that of cities within the category of 50,000 to 
100,000 people, East Orange has the highest percentage of 
people of color in all of the United States of America. It is 
close to 95 percent.
    One other factor that we found out is that home ownership 
in the city of East Orange was less than 35 percent 8 years 
ago. Because of the census and the fact that it was inaccurate, 
we went out and checked about 40 of the census tracks. We had 
no means to challenge that count. But because of that fact that 
percentage of home ownership was so low, we went into a first 
time home buyers program. What we did was to educate the 
population. We made sure we helped people get their credit 
better and we gave them counseling. Now, in 2009, we are at 47 
percent home ownership and we have avoided a lot of the 
foreclosures in our city because of the fact that we were 
challenging some of the census numbers in our own right.
    Also in our city, compounding our problem is that of homes 
that are one and two families, 40 percent of them are owned by 
senior citizens. Of that number, 43 percent of them are on 
fixed income, retired, and have no mortgage. Every time we look 
to increase taxes, this is the group that is most vulnerable.
    When you look at and talk about under-counting, the 
historic fact is the factors that affect an under-count are 
people of color, low income populations, immigrants with 
limited English proficiency, young people, and unemployed 
people. The city of East Orange is in a lot of trouble because 
that fits our demographics right away.
    What we need to do to make sure is that we count everybody. 
If you take a few things that you can use as parameters, 
because our population right now is said to be, with all of the 
adjustments and I have no idea how they make them, 69,824 
people, but if you look at our water consumption, it should be 
somewhere around 77,000 people. If you look at our school 
population, which includes public schools, charter schools, 
private schools, and day care, it should be somewhere between 
73,000 and 75,000. If you look at solid waste disposal, it 
should be somewhere around 72,000 people.
    Something went awry at the first count. In this count 
coming up, if it is wrong in the first year, it is wrong for 
the next 9 years. That is a problem.
    [The prepared statement for Mr. Bowser follows:]

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    Mr. Clay. Thank you, Mr. Mayor. Mr. Vargas, you are 
recognized for 5 minutes.

                   STATEMENT OF ARTURO VARGAS

    Mr. Vargas. Thank you, Mr. Chairman and Ranking Member 
McHenry, for the opportunity to appear before you on behalf of 
the NALEO Educational Fund.
    You know, a successful census requires an accurate count of 
the estimated 47 million Latinos in the Nation. We are the 
second largest population group and the fastest growing 
population. An under-count of the Latino population means a 
failed census. It will skew the distribution of Federal 
resources to States and localities.
    Many of the Federal programs allocated using census data 
are critical to the education and health of Latino families, 
such as the Department's of Education Title I grants and 
Department's of Health and Human Services' Head Start and SCHIP 
programs. These programs are just three of the Federal 
initiatives that have proven successful in helping children 
living in poverty to succeed in school and lead healthy lives. 
Without accurate 2010 census data, we would not be able to 
accurately assess the number of children in need nor allocate 
sufficient resources for them.
    An under-count of the Latino population will also have a 
significant impact on the fair distribution of Federal funding 
to States and cities with large Latino populations. Nearly half 
of the Nation's Federal funding allocated using census data is 
distributed to nine States where nearly 80 percent of the 
Nation's Latinos reside. These amounts range from $3.5 billion 
for New Mexico to nearly $42 billion for California. In 
addition, $43 billion in Federal funding allocations that rely 
on census data, about 11 percent of the Nation's total, are 
distributed to the five metropolitan areas where one out of 
four Latinos live.
    Latino elected officials at the State and local levels know 
the harm caused by the under-count. In my written testimony, we 
present four examples of elected officials around the country 
who are dealing with the problems caused by the under-count. 
These officials recommend changes to the Bureau's census 
challenge program to ensure that yearly population estimates 
are more accurate. The Latino elected officials we have 
surveyed recommend that the Bureau help jurisdictions to better 
understand the data and evidence required for a successful 
challenge and the criteria that the Bureau use to accept 
challenges.
    To help avoid an under-count and the harm that it brings, 
we offer the following recommendations for the 2010 census: 
First, Congress must provide the Census Bureau with sufficient 
funding to conduct the census. The House has approved census 
funding that is $206 million below the President's request. 
This seems to be the result of a misunderstanding between House 
appropriators and the Department of Commerce over certain 
carryover funds. The Senate Appropriations Committee has 
approved census funding at a level closer to the President's 
request. We urge the Senate to adopt the committee 
recommendation and urge appropriators to restore the $206 
million in conference that appears to have been inadvertently 
cut by the House.
    Second, the U.S. Senate must expeditiously confirm the 
nomination of the Director of the Census Bureau. The delay on 
Dr. Groves's confirmation is impairing the ability of the 
Bureau to proceed on track.
    Third, the Census Bureau must implement a communications 
and outreach plan that takes into account the current economic 
and social realities. The security measures implemented after 
September 11, including provisions of the Patriot Act, have 
raised concerns about confidentiality. Hurricane Katrina and 
other natural disasters have displaced thousands of residents. 
We are in the worst economic crisis since the Great Depression 
with thousands having lost their homes through foreclosures. 
Millions are living disengaged from our country's civic life. 
The paid advertising campaign needs to reach these Americans.
    As a member of the Joint Advisory Advertising Review Panel, 
I joined with my fellow members in raising concerns about the 
proposed advertising campaign that was initially developed. We 
are heartened to see that the communications contractors have 
taken into consideration the views of the JAARP and have 
retooled the messaging of the campaign. Last week, we were 
presented with a plan that was much more cohesive, better 
promoted the confidentiality and safety of the census, and 
reflected the economic times.
    This retooled campaign will need further testing and 
refinement but time is of the essence. We encourage Congress to 
continue its vigilance over this crucial component of the 2010 
communications plan.
    In addition, the lack of an English language paid media 
strategy directed at Latinos is problematic. The Census Bureau 
will fail to reach a large segment of the hard to count 
population if it relies exclusively on Spanish language media 
to reach all Latinos.
    Special strategies will also be required to count 
immigrants because our Nation's ongoing immigration policy 
debate has exacerbated their fear of contact with Government 
agencies and have increased hate crimes. The Bureau must use 
strategies that overcome this distrust and all public agencies 
must work to promote public confidence in the census.
    The Census Bureau must ensure that its 2010 work force 
reflects the diversity of the Nation's population from its 
highest managerial positions to its field enumerators. Latinos 
are the most under-represented segment of the Bureau's 
permanent work force, comprising less than 6 percent. As the 
Bureau continues to deploy its massive work force, it must hire 
a diverse group of top managers to lead its regional 
operations.
    To effectively reach the hard to count population, the 
Bureau must also hire enumerators who are familiar with local 
communities and their residents. In many neighborhoods, these 
workers must be bilingual. We have heard reports from some 
areas that sufficient bilingual enumerators are not available 
to hire, particularly in areas with emerging populations.
    Congress should closely monitor the implementation of the 
census in schools program. This was one of the success stories 
of census 2000. We are concerned that we are not going to have 
the same aggressive implementation of census in schools in 2010 
that we had in 2000.
    Finally, Congress must reject any proposals that would 
prevent the full enumeration of every U.S. resident in the 
census. These proposals are contrary to the fundamental 
precepts of our Constitution that call for a full count of 
every person residing in the Nation. We strongly condemn the 
efforts of a small group of extremists and even a Member of 
this legislative body calling for a census boycott. Encouraging 
anyone to not participate in the census is simply wrong.
    The NALEO Educational Fund remains committed to being a 
partner with the Congress and the administration in ensuring 
the success of the 2010 count. We look forward to working with 
you on this and I look forward to any questions you may have.
    [The prepared statement of Mr. Vargas follows:]

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    Mr. Clay. Thank you, Mr. Vargas, for your testimony. Thank 
you for the work you do.
    Mr. Alderslade, you are recognized for 5 minutes.

                 STATEMENT OF JAMIE ALDERSLADE

    Mr. Alderslade. Good afternoon, Chairman Clay. Good 
afternoon, Ranking Member McHenry. Good afternoon, 
Congresswoman Kaptur. Many thanks for this opportunity to 
discuss the important matter of how census data is used in 
Federal formulae.
    On a personal note, I came to this country 4 years ago to 
Social Compact and now I am testifying on Capitol Hill. It is 
incredible. [Laughter.]
    Today, I want to make three brief points. Accurate 
demographic data is critically important as a component of 
driving sustainable economic development in our cities, 
especially in our under-served neighborhoods. Close 
collaborative partnership between local governments and the 
Census Bureau is the Nation's most important driver for 
generating that data. Third, every conceivable effort should be 
made to ensure that the evolution and strengthening of this 
vital partnership between the Census Bureau and the cities 
continues.
    If there is one lesson that we have learned over the course 
of 10 years of conducting our pioneering drill-down research in 
350 under-served neighborhoods across this country, where we 
found under-served neighborhoods to be far larger, far safer, 
and with far greater buying power than previously thought, is 
that information matters. There is no more important source of 
information in this country than that produced by the Census 
Bureau.
    As you have heard from my fellow esteemed panelists, census 
data defines everything from how much Federal and State funding 
a city may receive to its prospects for attracting investments. 
When demographic data is accurate, investment decisions are 
more informed, policy more refined, and funding allocations 
fairer.
    To ensure accurate census information, it is imperative 
that there are strong partnerships between local governments 
and the Census Bureau. We therefore fully support the Census 
Bureau's development of the census challenge program, a major 
step in the evolution and strengthening of alliances between 
local governments and the Bureau.
    Since 2001, 251 challenges by local governments have been 
recognized by the Census Bureau, resulting in population 
adjustments of 1.8 million people to the contesting 
jurisdictions. So far, Social Compact has worked with six 
cities, including the great city of Toledo, OH, across the 
country to provide the Census Bureau with better local data, 
resulting in an aggregate adjustment of almost 200,000 
additional residents.
    The very existence of the census challenge program, a 
program designed by the Census Bureau, and the city of Toledo's 
participation in that program is the clearest signal possible 
that both the Bureau and local governments are committed to 
building stronger alliances. When that alliance is weakened or 
compromised, no one benefits. The Census Bureau gets incomplete 
and irregular data from cities; cities and States don't get 
their appropriate share of funding from Federal Government 
sources; investors don't get the accurate market information 
that they need; and perhaps most importantly, communities get 
under-counted.
    As you heard from my fellow panelists, suspicion or a lack 
of understanding over how census data is used in Federal 
formulae greatly compromise this crucial partnership. Indeed, 
the example of the reduction in CDBG funding to Toledo as the 
result of its participation in the census challenge program 
actually discourages cities and local governments from working 
with the Census Bureau. This must be addressed immediately.
    For local governments to continue to submit accurate local 
data to the Census Bureau, the formulas that include population 
factors and are used by Federal agencies need to be transparent 
and trusted by cities. Specifically, I have four 
recommendations:
    An immediate review is required of the formulas that HUD 
uses to determine allocations of the CDBG entitlement grants. 
As it stands, the current formulas used by HUD discourage 
cities from submitting accurate local data to the Census 
Bureau.
    Greater research is urgently required on the impacts of 
census figures on all funding for local governments that is 
determined by formulae. The city of Toledo knows to the dollar 
amount the reduction in CDBG funding as a result of 
participating in the challenge program but has little idea of 
the dollar impacts on other funding it receives. Cities need to 
know this.
    Once this research has been completed, tools should be 
developed for local governments so that they may plan for 
changes in population and corresponding changes in funding. For 
instance, could a funding calculator be developed that enabled 
local governments to plug in their population to calculate 
their predicted funding from Federal and State programs?
    Finally, there may be more that cities and the Census 
Bureau could do to support the development of sound and 
transparent funding formulae. One suggestion is a review of the 
current data collected by local governments by the Census 
Bureau to determine annual population estimates. Are there 
additional local data sources that can be collected that will 
not only improve accuracy but perhaps inform future funding 
formulae developments?
    In conclusion, the census is the best and most important 
demographic data base we have in the United States. But it can 
be greater still by ensuring close collaboration with local 
governments, especially with populations with high minority and 
other under-counted communities. Social Compact will continue 
to work diligently to foster mutually beneficial partnerships 
between local governments and the Census Bureau. By urgently 
addressing these issues outlined today, in partnership with 
Federal agencies, the Census Bureau and local governments will 
have taken a major step toward achieving our common goals.
    Thank you.
    [The prepared statement of Mr. Alderslade follows:]

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    Mr. Clay. Thank you. Thank you so much for your testimony. 
I thank the entire panel for their testimony.
    I will defer to my colleague, Ms. Kaptur, to begin 
questioning. You are recognized for 5 minutes.
    Ms. Kaptur. Mr. Chairman, I want to thank you so much for 
that. Mayor Finkbeiner of Toledo has to be leaving. His plane 
is on the runway. I appreciate your graciousness and that of 
Ranking Member McHenry. I very much appreciate it.
    Mayor, thank you for your excellent testimony, which will 
be made a part of the permanent record, and for your experience 
in the area of census. I am going to ask my questions real 
quickly so you can get them and any other matter you think we 
should know regarding the census on the record.
    No one has worked harder than you have to gain a full count 
and funding to support the count inside the city of Toledo and 
Lucas County, which are now suffering from double digit 
unemployment. Can you tell us how easy it was for you to share 
your discovered under-count with the Census Bureau? Did you 
face any challenges? If so, how did you overcome them? What 
recommendations do you have for this panel as we face the next 
census?
    Mr. Finkbeiner. That is a great question, Congresswoman 
Kaptur. As you know, I was elected in 1993 and took office in 
1994. I think for the better part of that 8 years, it bothered 
me that I did not feel that the consistent reporting of 
Toledo's population dropping, dropping, and dropping could be 
validated.
    Our efforts to reach the regional office in Detroit and the 
local office in Toledo were met with respect and were met with 
dignity but we basically, in my judgment, got a cold shoulder. 
It was like, ``we know what we are doing. We are the 
professionals and you are just like every other Mayor in 
America: You think you have more people than we do.''
    But having had that experience that I referred to in 1970 
where I lost 35 out of 36 of my crew, and that was the trained 
crew; the people that were brought in behind them were nowhere 
near as well trained as that initial crew, I have had great 
concerns.
    When I learned that Cincinnati had gained over 20,000 
people in population, I called Mark Mallory, the Mayor. Mark 
told me that he had done that only because he had felt the same 
frustration and inability to reach the census people as I had. 
He said there is a firm, Social Compact. They are very, very 
modest in what they charge you and they helped me find 25,000 
Cincinnatians. Then the suburban communities plugged into it 
and they actually found another 10,000 people in suburbia that 
were under-counted. So I think their total gain was 35,000. 
That would be, I believe, Hamilton County.
    We got in touch with Social Compact and they helped us know 
the formula. Boy, it was very quick. It was only a matter of 
probably 60 to 90 days before we felt we were in a great 
position to claim there were approximately 22,000 or 23,000. 
When it all came down, this is very interesting Congresswoman, 
we were only off by 11. Really, the number we submitted was 
corrected by 11 persons by the U.S. Census Bureau.
    But then we get into this. That was 2007 count. Now, just 
recently, they released the 2008 count and they subtracted 
2,500 people from us and didn't give us credit for the 22,600 
people we had gained. So it is rather confusing.
    Then there was the letter saying we are going to have money 
subtracted. The most important thing about this is, and I did 
listen to the explanations, Congresswoman, that were given, 
that it doesn't make sense. If you think there is a recession 
going on in 48 States, come visit Michigan and Ohio. There is a 
depression in Michigan and Ohio with 25 percent unemployment in 
Detroit, MI and 12.5 percent in Toledo. At the very same time, 
we are saying there are more people in Toledo. We know a fair 
share of them are the socially disadvantaged and the 
economically disadvantaged because all of the services are in 
the heart of our city and our unemployment is 12.5 percent. Yet 
we have money pulled back from us. That just doesn't make any 
sense.
    So to answer your question very directly, I am grateful for 
the recognition of the fact that there are 22,600 more 
Toledoans than thought but I don't think I should have had to 
actually go and hire an agency to get that point across to the 
Census Bureau.
    Ms. Kaptur. I think the testimony of our Mayor is very, 
very revealing, Mr. Chairman. I know that what you said will be 
taken into consideration. I don't know if we have 
representatives of the Census Bureau still in the audience. I 
hope we do and that they are listening as well.
    Mr. Clay. They are here.
    Ms. Kaptur. I thank the chairman for that. I thank you, 
Mayor Finkbeiner, for your great leadership over so many years. 
It is the toughest job in America to be a Mayor.
    Mr. Finkbeiner. If you will allow me to make one more 
statement that I think it is important, Chairman Clay, 
Congresswoman Kaptur, and Congressmen? God bless them, but do 
you note today that the leadership that spoke to you was all 
white? The largest group of uncounted men and women in America 
is not, I don't believe, the white population. I believe it is 
the African American, Hispanic, Latino, and Asian populations.
    People still fear people who are different than themselves. 
We are getting over it. Slowly but surely, we are getting over 
it. But we are not there yet. In the very hearts of the cities 
is a significant proportion of your African American, Latino, 
Hispanic, and Asian populations. We can't have them under-
counted.
    The best way we can get them counted is to have people that 
are familiar with them doing the counting who not afraid to be 
in those tall tenement buildings or in the poorer 
neighborhoods. That is something that the U.S. Census Bureau 
needs to make a commitment to, in my judgment.
    I do have to catch that plane. [Laughter.]
    The Census Bureau will not be dismayed by that. [Laughter.]
    Thank you, Mr. Chairman. Thank you very much, Congress 
Members. This is a hugely important issue to this Nation.
    Mr. Clay. Thank you, too, Mr. Mayor, for your service to 
Toledo and the country. We understand. You are excused.
    Mr. McHenry, you are recognized for 5 minutes.
    Mr. McHenry. Thank you, Chairman Clay. Thank you all for 
your testimony. I really appreciate you being here. I know it 
has been a long day with the votes and everything else. Thank 
you.
    Mr. Alderslade, can you provide just a sort of quick 
synopsis of what your organization does?
    Mr. Alderslade. Absolutely. We are a national non-profit 
organization, based literally 10 blocks away from here, of 
business leaders committed to promoting investment in low and 
moderate income, usually minority, communities. Through our 
pioneering market analytic tool, something called the drill-
down, we conduct market analyses in these typically under-
counted and under-served communities to essentially make the 
business case for the first time.
    Usually these communities are defined by what is bad about 
them. We know to a science what is bad about these communities 
but we have no narrative for what is good and what their market 
opportunities are. Without market opportunities, you don't get 
private sector investments. So we make the business case.
    We have done this in 350 under-served neighborhoods across 
20 cities, including Washington, DC. We found 1.5 million more 
people, $35 million more buying power, and that these 
communities are far safer than previously thought.
    Mr. McHenry. On your Web site, you mention that your 
organization uncovers census errors. One interviewer stated 
that Social Compact's researchers are like inner city 
bloodhounds. They sniff out people who are overlooked by the 
census. How do you do that? I don't want you to give away any 
secrets for your organization, but how is that done?
    Mr. Alderslade. I don't know whether to be pleased about 
that description or not. I don't know. There are two things we 
do:
    The drill-down, which is using public and private sector 
data, is about purely making the business case and helping 
Mayor Finkbeiner, Mayor Mallory, and all sorts of Mayors make 
much more investment information oriented policy decisions in a 
bid to attract investments.
    In terms of these cities that we have helped and are 
currently helping now with census challenges, that methodology 
is defined by the Census Bureau. It has been around since 2001. 
Challenge is the wrong word. It sounds combative but it is the 
name of the program, unfortunately. The census challenge 
program allows local governments to participate every year, 
just as New York City does and just as Toledo did last year, 
using defined methodology that was created by the Census 
Bureau. It allows local governments to contribute construction 
data over the course of the last 10 years.
    What we found is that there have been some issues with it. 
In a sense, the existence of this program is fantastic. When 
cities are successful in their challenge, there is no better 
signal that the Census Bureau and local governments can work 
together to produce accurate results.
    Mr. McHenry. Do you use enumerators or do you use existing 
data?
    Mr. Alderslade. We use existing data. So when we did 
Toledo's, we used existing construction data that they had 
lying around their departments, collected as a result of just 
being a city government.
    Mr. McHenry. Is this an error? Is it a willful omission or 
is it an error on the Census Bureau's part?
    Mr. Alderslade. No, it just needs some improvements. The 
acting census director is exactly right. There are 39,000 
jurisdictions that can challenge but we have only had 251 in 
the last 10 years.
    It is not that cities are happy with their estimates. It is 
that essentially every month the Census Bureau sends a 
construction form, the C-404 form, to 39,000 jurisdictions 
across the country. They are meant to fill this out and send it 
back in. If you don't know what the value of that form is, if 
you don't know what the implications are for your funding, your 
investment prospects, or the perception of your city, it either 
gets send to the wrong person, the Mayor doesn't think it is 
important, or it just gets lost in the hundreds of thousands of 
things that cities have to do.
    So in a sense, what we are trying to do is correct that 
relationship, to say to Mayors that this information, if you 
work in partnership on an ongoing basis and provide the data 
locally that the census needs, will counter the need for census 
challenges going forward. The census challenge is a great 
program because it is a partnership branch given out by the 
Census Bureau to say that we will work with you.
    Mr. McHenry. Would you contend that the decennial 
enumeration is more accurate than the estimates?
    Mr. Alderslade. That is a tricky question. Our experience 
through the drill-down work that we do, our experience of 
counting the populations in central city, minority low and 
moderate income populations would suggest that no, it isn't. 
For those communities, it is still a challenge. We found in 
just 350 under-served communities 1.5 million more people.
    Mr. McHenry. But that is based off of the estimates, 
correct?
    Mr. Alderslade. No, this is based off transactional data 
and----
    Mr. McHenry. You found extra people than the Census Bureau 
estimated were there in 2007, correct?
    Mr. Alderslade. Exactly. That is what we found.
    Mr. McHenry. That was based off of the population estimate 
of the census, not the actual enumeration?
    Mr. Alderslade. That is based off of the drill-down 
methodology which uses administrative data and private sector 
data to buildup a real time population number. So just from our 
experience on the under-count in those communities, for the 
enormous missed markets that we identify in low income 
communities, the evidence would suggest that in low and 
moderate minority communities, the decennial count and 
estimates are under-counts.
    Mr. McHenry. Mr. Vargas, I appreciate your leadership 
within the Latino or Hispanic community to say participate. The 
Constitution is very clear about participation in the census 
and it is who is here on census day. I appreciate you being 
vocal about this.
    Within your testimony, what you said during your testimony 
is that you have concerns about a lack of an English speaking 
media campaign toward the Hispanic community. Are there other 
recommendations specifically like that you have for the Bureau?
    Mr. Vargas. There are, sir. Thank you for that question. As 
a member of the Joint Advisory Advertising Review Panel, I had 
an opportunity to see the initial campaign that had been 
developed by the communications vendors. I don't know if you 
got word, but we issued a vote of no confidence in the 
contractor's ability to carry out that campaign because the 
messages were not messages for 2010. They were messages for 
1990. They were a feel good campaign to come, join, and 
participate.
    People right now, it is hard to feel good when you are 
losing your homes and you are losing your jobs. We are thinking 
that the Bureau really needs to bring some sense of reality 
about how important the census is to help this country move 
forward. That was the kind of messaging we think that can 
resonate certainly within the Latino population.
    With respect to language use, obviously to reach the 
immigrant population, it is absolutely critical to use Spanish 
language media. But many of the hard to count populations have 
been here three or four generations. Many of them may be living 
in poverty and feel marginalized from society. They don't watch 
Spanish language media, necessarily. They are watching English 
language media.
    The Bureau, their effort is to say well, we will cover them 
with the Diverse America Campaign. Our recommendation is that 
you have to talk to them specifically and overcome the cynicism 
that it doesn't matter to be counted. These are the kind of 
folks who also believe that ``my vote doesn't count,'' ``no one 
cares what I have to say,'' and ``I am on the outs.'' That is 
the population that doesn't participate. That is the population 
that we need to invest money in and reach them.
    Mr. McHenry. You said that there is some difficulty to get 
enumerators within emerging communities? For instance, in my 
district there is a significant emerging Hispanic population.
    Mr. Vargas. That is right, sir.
    Mr. McHenry. Going to the Bureau, they have been fantastic 
and very open about wanting input. We have a significant Hmong 
population, for instance, in my district as well. Very few 
areas of this country actually have a Hmong population. So 
those types of regional issues, has the Bureau been open and 
collaborative with you and been a partner in trying to find 
those enumerators?
    Mr. Vargas. They have, but I think they are hamstrung with 
some policy concerns. Working for the Bureau is a Federal job 
and you need to be a U.S. citizen. I have no problems or 
concerns that the Bureau will not find enough U.S. citizens who 
speak Spanish in Los Angeles, San Antonio, Chicago, or New 
York. I am more concerned about the communities like the ones 
you represent where it is an emerging population, more 
immigrant than established communities, and so you have less of 
a U.S. citizen population that is bilingual that the Bureau 
could tap into to hire.
    In addition, foreign nationals from Mexico who are work 
authorized cannot be hired by the Federal Government today. So 
in those communities where you have growing Mexican immigrant 
populations, that is a double hamstrung that the Bureau has.
    Those are some policy concerns that we think the Congress 
should look into.
    Mr. McHenry. Thank you. Mayor Bowser, just in conclusion 
before I hand it back over to Chairman Clay before he gives me 
the hook, you mentioned some discrepancies between your number 
for sewer users versus water users and these different numbers 
that you have. What are your recommendations for the Bureau to 
get a better count of your residents?
    Mr. Bowser. I think, unlike putting it all on the Census 
Bureau, I think it incumbent upon Mayors and leaders in the 
communities to make sure we get the proper representation. In 
my city, we historically have talked at least for the last 15 
years about having an over 20 percent Haitian population. We 
haven't counted them yet.
    So what we are doing is making sure that we have 
representatives in the enumerators. It should be insisted upon 
by the Census Bureau that we cover all of these. We have a 
large South African population, a Caribbean population. Our 
Latino population is growing. It is somewhere, and this is an 
estimate, around 3 to 6 percent. But we are making sure that we 
have people that can go to those places and speak to them, 
speak their same language, and dress like some of the other 
folks. So we do that.
    But we can't put that all on the Census Bureau. This is our 
one opportunity to make this thing work. What the Census Bureau 
needs to do is insist to their regional coordinators that they 
get the proper people that can go out there and count folks. 
Don't put it all on them.
    All you have to do is make sure they have the money to do 
it. So if you are talking about cutting some money from the 
Census Bureau, don't do it. Please.
    Mr. McHenry. Thank you. Thank you all. Thank you, Mr. 
Chairman.
    Mr. Clay. Mr. McHenry, you asked almost all of my 
questions, too.
    Let me start with Mayor Bowser. In your testimony, you 
mentioned HUD's HOME program and how the under-counting of 
rental units by the U.S. Census Bureau has negatively impacted 
funding for your city of East Orange. Please elaborate on your 
specific frustrations with the Census Bureau and HUD. How do 
you believe either Federal department can improve their 
programs?
    Mr. Bowser. As I said early on, we have a large population 
that is pretty much of fixed income. We have a waiting list to 
rehabilitate homes based on access to HOME dollars. Somebody 
might be out there for 3 years waiting to just bring the houses 
up to basic code. That is all the money is really for. But in 
addition, some of the HOME money can be used for affordable 
housing and in startups and things like that.
    The problem that we have is that if you look at the numbers 
based on the census, we think that we are shortchanged. So we 
don't have the dollars to really help our total population that 
is asking for and looking for some of that help. It has been a 
problem. I just hope that this time going around we are able to 
fix those numbers.
    Mr. Clay. To get it right. But have you as the Mayor or as 
the city of East Orange, have you challenged the census 
estimates through the challenge program?
    Mr. Bowser. We didn't do it this past time for 2000 like we 
did in 1990 because it was such a large number that we felt was 
wrong. Basically, there are areas in your city that do not 
change. They are very stable families and homes. So what you 
need to do is put your effort into the areas that have the most 
problems that are very difficult to get into.
    Mr. Clay. I hope you make acquaintance with Mr. Alderslade 
today when we end this.
    Mr. Bowser. I got his card, sir.
    Mr. Clay. Let me move on to Mr. Vargas. Given that there is 
a historical under-count, do the yearly census estimates, 
appeals, and adjustments adequately rectify the discrepancies 
in funding to local Latino communities that result from that 
under-count initially?
    Mr. Vargas. No, I don't believe so, sir. I think the point 
has been made earlier that if the baseline data are inaccurate 
to begin with from the decennial census, then all subsequent 
data throughout the next 9 years continue to be inaccurate.
    I would like to point out, however, that we are going to be 
following very closely the use of the American Community Survey 
data. When Congress reauthorized the Voting Rights Act of 1965, 
for example, it indicated that the ACS data could be used every 
5 years to update the jurisdictions that would be required to 
be covered under Section 203 of the Voting Rights Act, which 
requires language assistance in voting to our citizens who are 
limited English proficient. So we will be following that very 
closely to see if in fact the ACS has a sufficient sample size 
every year to accurately determine whether or not we are 
targeting implementation of our voting rights laws accurately.
    Mr. Clay. So for your community, it is like a moving 
target. We have estimates that there are 47 million Latinos 
within our population but it is hard to get a gauge of it. You 
are coming in at 28 million, 29 million?
    Mr. Vargas. Well, the last census put us at some 30 
million. But I think one of the most interesting statistics the 
Census Bureau has recently indicated is that this country grows 
by a person every 15 seconds. Every 30 seconds, that person is 
a Latino or Latina.
    Mr. Clay. I have read that somewhere. Thank you for your 
response.
    Mr. Alderslade, if GAO is able to determine a new and 
accurate per year value of dollars lost for each under-counted 
person in local communities, what would this number mean for 
your work with Social Compact and your interest to secure 
private investments in inner city neighborhoods?
    Mr. Alderslade. That is a great question. There are two 
sides to this. On that assumption, you would assume that the 
cities, counties, and State governments would get more Federal 
funding dollars to spend on CDBG economic development programs 
and the programs that support Mayors in creating jobs and 
attracting investments.
    On the other side of things, a report done by the Brookings 
Institute estimated that 80 percent of all retail investment 
decisions use data derived from the census. Now, 
conservatively, even within the economic downturn that we are 
in, there are estimates that there will be $250 billion of 
commercial investment over the course of the next 4 years.
    So if you have accurate counts, just as we found in New 
Orleans 50,000 more people, and had 48,000 more added to 
Detroit's population, those are new markets for investors. 
Those are new markets for retailers, new markets for banks. 
That changes the way Mayors make decisions about economic 
developments.
    Mr. Clay. Thank you so much for your response. Let me thank 
this panel for their responses.
    I thank my colleagues as well as the staff for their 
indulgence on this hearing. As you heard, the bells are ringing 
so that will conclude this hearing. I am sure there will be 
subsequent hearings. Thank you.
    [Whereupon, at 5:42 p.m., the subcommittee was adjourned.]
    [The prepared statement of Hon. Carolyn B. Maloney and 
additional information submitted for the hearing record 
follow:]

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