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RESEARCH BRIEF Children  |   July 2024

FUNDING IMPLICATIONS OF THE 2020 CENSUS UNDERCOUNT IN TEXAS BY FEDERAL PROGRAM CATEGORIES

In partnership with Sean Moulton from the Project on Government Oversight (POGO), this research brief estimates the funding implications of the 2020 Census undercount of Texas in relevant federal program categories.

By: Dr. Francisco A. Castellanos-Sosa, Texas Census Institute, Senior Research Associate
Sean Moulton, Project on Government Oversight, Senior Policy Analyst

ONE PAGERFULL REPORT

The Funding Implications Initiative

The Texas Census Institute created the Funding Implications Initiative to measure the effects of the 2020 Census undercount in Texas and inform stakeholders of the financial relevance of accurate counting in the 2030 Census. The initiative will comprise related parts, such as salient federal program categories, industries, and geographical classifications, to enable a thorough analysis. This is the first product of the initiative, and it estimates the potential losses of federal funds for Texas at a rate similar to that of its undercounting, expanding its analysis through salient federal program categories. The initiative’s second product will study the undercount’s funding implications at the NAICS 2-digit industry level. The third part of this initiative will study the impact of undercounting at the county and regional level in Texas. This initiative will offer valuable insights and recommendations for addressing the U.S. Census undercount and empowering stakeholders with the knowledge for effective decision-making and action.

Research Overview

Texas received $150.3 billion in Fiscal Year 2020 through federal programs that relied on census data to allocate resources geographically. At the same time, Texas experienced the second-largest undercount in the 2020 Census (547,968 people were not part of the census count). In this study, we classify 338 federal programs into seven categories and approximate the funds not allocated to Texas for those programs by applying a reduction of 1.92% in federal funds, which is the undercount rate of the state according to the U.S. Census Bureau.

Main Findings

Texas will not receive an estimated $25.1 billion in federal funds during this decade due to the 1.92% undercount.
Federal programs related to Health, and those related to Education, Infrastructure, and Housing will experience the biggest loss of federal funds.
We estimate more than $3.2 billion will not be allocated to Texas for Education, Infrastructure, and Housing during the decade.

Concluding Remarks

The findings of this research brief shed light on the critical funding implications resulting from the 2020 Census undercount in Texas. The implications are profound, impacting the allocation of federal funds across various program categories and regions within the state. The Texas Census Institute’s Funding Implications Initiative has initiated a comprehensive analysis, serving as a valuable resource for informed decision-making, advocacy, and action, especially as we approach the 2030 Census.
A reduction in federal funds for Texas has a significant impact on the quality of life of its residents. We estimate that Texans miss out on more than $2.5 billion in federal funds each year because of the 2020 Census undercount. Over the next decade, this would add up to an estimated loss of $25.1 billion in federal dollars.
Along with the funding implications, the census undercount also brings category-specific implications. Health, Education, and Infrastructure were the most affected by the undercount. These categories saw the biggest reductions in federal funds, impacting crucial aspects of public well-being and development for an entire generation.
The funding implications underscore the critical importance of an accurate Census count. Inaccurate data can misallocate resources, potentially hindering effective planning and risking the waste of taxpayer dollars.
Furthermore, the comprehensive analysis of funding implications by program categories highlights how the loss of funds impacts the provision of specific services and populations in need. The engagement of stakeholders and policymakers is crucial to address these funding disparities as a means of promoting a more accurate Census in 2030.
To address the funding implications of the 2020 Census undercount, we offer the following recommendations:
Census Data Quality: Promote initiatives to improve the quality of the census count,  especially at the sub-state level. Encourage cooperation between the U.S. Census Bureau and external stakeholders to ensure a more comprehensive data collection.
Stakeholder Engagement: Engage relevant stakeholders, including industry experts, local governments, and advocacy groups, to raise awareness of the undercount’s impact and work collaboratively to develop strategies for better data collection in the future.
Continued Research and Analysis: Encourage researchers and data analysts to delve deeper into specific funding implications in various categories and geographic regions, using the findings from this study as a foundation for further research and detailed analysis.
In conclusion, the undercount in the 2020 Census has had substantial funding implications for Texas, affecting our ability to deal with critical issues in a variety of topics. The Funding Implications Initiative of the Texas Census Institute has provided a foundational analysis that will aid policymakers, researchers, and advocates in addressing these challenges, ensuring a more accurate Census count in 2030, so that Texas receives its fair share of federal resources in the future.

Author’s Message

The 2020 Census undercount in Texas significantly impacts the state’s federal funding, resulting in substantial financial losses across various crucial programs. With an estimated 547,968 people missed in the count, Texas faces a projected shortfall of $25.1 billion in federal funds over the next decade. The undercount’s effect is profound, particularly on critical sectors like Health, Education, and Infrastructure, which collectively will lose over $3.8 billion. This study by the Texas Census Institute underscores the need for accurate census data to ensure equitable distribution of federal resources, which directly influence public well-being and state development.
The analysis reveals that programs such as Medicare, Medicaid, and SNAP, which heavily depend on census data for resource allocation, will bear the brunt of the funding loss. With nearly $2 billion less annually and a decade-long deficit of $19.7 billion in these health-related programs, the undercount poses serious challenges to maintaining essential services for Texas residents. Similarly, Education, Infrastructure, and Housing programs are projected to experience significant funding gaps, which could hinder the state’s growth and ability to support its communities effectively.
This research highlights the critical importance of accurate census counts and the wide-reaching consequences of undercounting. The findings advocate for concerted efforts to improve data collection and awareness ahead of the 2030 Census. By engaging stakeholders, policymakers, and the public in understanding and addressing these funding disparities, Texas can better prepare for future censuses to ensure it receives its fair share of federal resources. The Texas Census Institute’s initiative serves as a call to action for robust planning and advocacy to avoid similar undercount repercussions in the next decade.

Acknowledgements: The authors appreciate the insightful support provided by Joseph J. Salvo.

FAQ

1) Why is it difficult to estimate the funding implications of the undercount?

Each federal program allocates resources differently, so the role of the population numbers might be larger in one and smaller in others. Moreover, federal programs attend to different population groups. These criteria might change from year to year.

2) Why are we using Federal Program Categories?

We classified and grouped the 338 federal programs into a few categories to clarify the analysis and create awareness of the relevant topics in which census data plays a key role.