Columbus and several other smaller metropolitan statistical areas in Indiana won’t lose their designation as an MSA after federal officials said Tuesday they won’t raise the population threshold as was proposed by former president Donald Trump.
With the decision under the President Joe Biden administration, five cities in Indiana, including Columbus, won’t lose a designation that local officials say is critical for millions of dollars in funding.
On Tuesday, the Office of Budget and Management said it will keep the minimum population needed in a community’s core city at 50,000 residents in order to be designated a “metropolitan statistical area,” also known as an MSA, The Associated Press reported.
A proposal filed Jan. 19 under the Trump administration suggested increasing the minimum population threshold for the designation to 100,000, according to a proposal published in the Federal Register by the White House Office of Management and Budget.
That would have downgraded more than a third of the current 392 MSAs to “micropolitan” statistical areas, including five in Indiana — Columbus, Terre Haute, Kokomo, Michigan City–LaPorte and Muncie.
The Columbus MSA, which includes all of Bartholomew County, had an estimated population of 83,779 in 2019, according to the U.S. Census Bureau.
“The city of Columbus is pleased the (federal government) did not substantially change the standards for delineating core based statistical areas, which allows the city to maintain its MSA designation,” Columbus Mayor Jim Lienhoop said in a statement. “As many other communities across the nation, we rely on federal funding to help in many areas, including community development, transportation and planning.”
The proposed change had drawn the criticism from local officials — including Lienhoop, Greater Columbus (Indiana) Economic Development Corp. President Jason Hester and Columbus Regional Health CEO Jim Bickel, who said the loss of the designation could have had a “far-reaching” and “devastating” impact on Bartholomew County.
Columbus’ congressional delegation — Rep. Greg Pence, R-Indiana, Sen. Todd Young, R-Indiana,and Sen. Mike Braun, R-Indiana — had also joined in opposition, submitting letters to the Office of Management and Budget, urging the office to deny the proposed changes and retain the current MSA definition.
At stake were millions of dollars in funding allocated to Columbus from several federal housing, transportation and Medicare reimbursement programs that are tied to communities being designated an MSA.
A committee of representatives from federal statistical agencies had recommended changing the definition of a metro area, saying it was long overdue given that the U.S. population has more than doubled since the 50,000-person threshold was introduced in 1950, according to wire reports. Back then, about half of U.S. residents lived in metros, compared to 86% today.
The committee had said the proposed change was purely for statistical purposes and would not be used for funding formulas, according to wire reports. In practice, however, that is often how the designation has been used.
In a March 12 letter to the Office of Management and Budget, Lienhoop said losing the designation could have resulted in a loss of $3 million in federal funding for the city per year and “decimate” the city’s ability to operate its public transit system, which, according to the letter, relies on $800,000 each year in federal funding that is tied to MSA status.
Additionally, the change in designation could have impacted funding granted to the city through its current status as an “entitlement city” within Housing and Urban Development’s Community Development Block Grant program.
Entitlement cities receive guaranteed funding each year for low-income housing improvements, aging-in-place modifications, among other things, the letter states, city officials said.
Block grant funding has been used to renovate the Columbus Child Care Center and Sycamore Place Apartments in recent years.
Columbus received entitlement city status in 2004 under the Housing and Community Development Act of 1974, which uses the 50,000-person MSA threshold to determine eligibility.
But the concern was that future legislation governing the program would have used the updated definition of MSA if it were approved.
Another big concern involved how Columbus would market itself to companies looking to identify where they would like to locate their operations.
Currently, businesses and their site selectors rely on federal data on employment concentrations, workforce and average wages that is only available on the national, state and MSA level to scout locations, Hester said in an earlier interview.
About 1 in 3 “attraction projects” in Indiana — meaning companies that don’t have operations in Indiana but are contemplating whether they should in the future — come from site selectors, who use data that is only available at the MSA level, Hester said.
The stakes were also high for Columbus Regional Health and Bartholomew County’s health care system, Bickel said.
In a March 2 letter to the Office of Management and Budget, Bickel said losing the MSA designation would have a “profound negative impact” on the hospital system, reducing the hospital’s payments from Medicare and other payers by an estimated $7 million per year.
Medicare is a federal program that provides health care coverage to people age 65 and older and disabled people under that age.
MSA classification factors into reimbursement rates for services rendered to Medicare recipients, with hospitals offered higher reimbursement rates for inpatient operating costs in MSAs, where wages generally are higher.
About half of CRH’s hospital patients are Medicare recipients.
Of the 734 public comments the Office of Budget and Management received about the proposed change — including letters from Lienhoop, Hester and Bickel — 97% opposed it, the agency said Tuesday in a notice of its decision.
Updates to these standards are considered every decade, according to wire reports. Even though the proposal was made during the Trump administration, and put on hold in the Biden administration, statisticians say any changes to the standards aren’t based on politics.
