WASHINGTON -- Just as states are straightening out their private-activity bond volume cap totals for 1991, they may face a new problem on the horizon in 1992.
Problems with the 1990 Census and understaffing may leave the U.S. Census Bureau unable to release a crucial population report in time for states to use in computing their 1992 volume caps, some municipal industry officials say.
The volume cap law requires the report, which will contain state population estimates for 1991, to be issued by Dec. 31 so states can use it in their volume cap calculations. If the bureau misses that deadline, states will have to go back to 1990 population figures, a situation that would penalize states like California and Florida, whose populations are growing the fastest in the nation.
Concern about next year's volume cap numbers comes on the heels of a controversy over which Census Bureau population report should have been used to calculate the volume cap for this year. States had been relying on a report released Dec. 26, 1990, for their 1991 volume cap totals, but it contained incorrect numbers. The Internal Revenue Service ruled July 18 that states must revert back to 1989 population estimates in calculating this year's volume cap.
The decision by the IRS makes it all the more imperative for the bureau to get next year's numbers out on time, municipal officials said. Many observers expected the IRS to allow the use of numbers released Jan. 6, 1991, correcting the report dated Dec. 26, 1990, but the service chose to stick by the letter of the law in its ruling.
The Census Bureau is working on its 1991 population estimates and expects to have a report out by the end of the year, bureau officials said. But state officials who rely on the population reports and municipal industry officials who monitor the volume cap situation said they still have their doubts.
One reason for their doubt is a controversy over the 1990 Census, which increased the bureau's workload because officials needed to determine whether there had been an undercount and if the population totals should be adjusted. Commerce Secretary Robert A. Mosbacher announced last month that the census failed to count about 5 million people, but he would not order a statistical adjustment to the official tally.
"Informal discussions with the bureau indicate that substantial disruptions have occurred as a result of the 1990 census decision-making process," says Victor J. Miller, a senior fellow with Federal Funds Information For States, in a report issued July 29 by his organization.
"As a result, it is unclear whether 1991 population estimates from the 1991 current population survey will be available before the beginning of calendar year 1992," Mr. Miller writes. His organization is a research service sponsored jointly by the National Conference of State Legislatures and the National Governors Association.
Another problem is that the bureau does not appear to have a staff large enough to handle the additional workload caused by the problems with the 1990 census, municipal officials said.
"They don't seem to have the personnel or resources anymore to have the same accuracy as they had before," said Frank Shafroth, the director of the center for policy and federal relations for the National League of Cities. "I assume there's more they don't know than ever before."
Along with the report's timing, there have also been questions about what it will contain: Specifically, whether it will reflect changes in state populations discovered through the 1990 census. A Census Bureau official who did not wish to be identified said it will not.
To get the report out on time, the bureau will have to work from the 1980 Census, the official said, adding that it may be 1993 before the 1990 Census is reflected in the population report used to compute the volume cap.
Some state officials, meanwhile, are still angry that they were ordered to use 1989 population figures to compute their 1991 volume cap. They said the experience raises concerns that there will continue to be confusion over volume cap numbers in the future.
"What confidence can anybody have next year that Census will put out the right numbers?" asked Glenn Hosken, senior attorney with Florida's Division of Bond Finance.
"I hope this [year's problem] is an anomaly and not the beginning of a messy process," said Bruce Carlson, policy development director for Connecticut's Office of Policy and Management.
