The Office of Management and Budget may be rethinking its push to redefine what makes a city in the eyes of the federal government after acknowledging concerted pushback in and out of Congress.
During a hearing Wednesday before the House Budget Committee, acting OMB Director Shalanda D. Young said the agency has held off making a final decision on a proposed threshold change for what’s considered a “metropolitan statistical area.”
Young noted the change was proposed one day before President Donald Trump left office and acknowledged receiving extensive criticism on the proposal since then.
“This issue shows bipartisanship is alive,” she told lawmakers. “I’ve heard from congressmen on both sides of the aisle.”
A metropolitan statistical area designation is used in funding decisions for hundreds of federal programs. In January, OMB proposed doubling the threshold for MSAs from 50,000 to 100,000 people in the urban core, opening the door to future shifts in the definition. That would jeopardize billions of dollars in federal funding for 144 communities nationwide.
Rep. Ashley Hinson, R-Iowa, told Young the proposed change “threatens Dubuque’s access to critical resources,” including health care delivery.
“People are very concerned about this, not just in Dubuque but also in Ames,” she said.
A federal interagency Metropolitan and Micropolitan Statistical Area Standards Review Committee, which recommended OMB make the change, argued the country’s population has more than doubled since first establishing the standards in 1950, making it due for a change.
But Rep. Randy Feenstra, R-Iowa, said the reclassification would be “devastating” to some communities.
“I hear you, and your colleagues have made it clear what a problem this would be,” Young told Feenstra.
The proposed doubling of the threshold would “potentially jeopardize much-needed federal resources from reaching communities that depend on them,” Portman said in a statement accompanying the bill.
The proposed rule change received more than 800 Federal Register comments. In addition to members of Congress, national groups and local leaders also pushed back, arguing the change would scramble funding decisions for federal programs that rely on the MSA designation. The Community Development Block Grant program, which totaled more than $3 billion last year, sets apart the majority of the funds for communities with MSA designations.
The National League of Cities and other organizations have argued OMB has not done enough research on the potential impact of the change, which could cause a ripple effect disrupting Department of Transportation grants, Medicare reimbursements, rent calculations and more.
David Lerman contributed to this report.