Court orders new trial over census, faults U.S. argument against recount.

WASHINGTON --- In a victory for cities, an appeals court has ruled against the federal government's 1991 decision not to adjust the 1990 U.S. Census to reflect an undercount of about five million people.

The decision Monday by the U.S. Court of Appeals for the Second Circuit did not require an immediate adjustment but ordered a new trial in the lower court that had ruled against the state and local governments.

The court concluded that the federal government had not properly justified its decision against adjusting the census count, which affects not only the apportionment of seats in Congress, but also the mount of money that cities and states receive under various federal programs.

In addition, census figures are used to determine how much bond authority is allocated under the private-activity volume cap. Under the volume cap law, states are permitted to distribute bond authority equal to $50 per capita or $150 million, whichever is greater, each year.

"This is a big issue for a lot of our members in terms of funding," said Doug Peterson, a senior policy analyst for the National League of Cities.

An adjusted census count would, for example, increase Chicago's official population to about 2.86 million from 2.78 million. City officials estimate that, if the figures are adjusted, Chicago could receive $88 million in additional federal funds annually until the next census.

Peterson said the league is pleased by the court's decision because "what we're basically supporting is accuracy." If the decision moves the federal government closer to giving an accurate count of the population, "that's where we want to be," Peterson said.

The controversy over the 1990 tally began in 1991 when census officials admired that about five million U.S. residents were not counted, including many minorities in large cities.

Several states and cities, including New York city and state, Chicago, and Los Angeles, demanded an upward adjustment in the official census figures, but in July 1991 the Bush Administration announced that the figures would not be changed. The administration reasoned that any method for adjusting the statistics could produce new inaccuracies.

The cities and states sued, but lost in a federal court in New York City last year. The Appeals Court, in siding with the cities and states, said that at the new trial the federal government will have to abide by a stricter standard in proving that its decision was correct. The government will have to' show that not adjusting the census serves an essential government purpose.

The Clinton Administration has the option of choosing not to appeal and moving immediately to modify the census numbers. But some news reports said a few states that would lose in the voting apportionment process under an adjusted census count stand ready to appeal if the federal government does not. The case could ultimately wind up in the Supreme Court.

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