Serious shortcomings in national data, including an outdated federal measure of household poverty, are undermining the task of identifying and assisting America’s most vulnerable children, according to a report issued Tuesday.

The Annie E. Casey Foundation, in its annual Kids Count report on children’s health and well-being, says national efforts to track and analyze such trends “fall far short of what is possible, what is needed, and what is demanded.”

The report urges the government to overhaul its formula for measuring poverty, strengthen efforts in the 2010 Census to fully count children and minorities, and improve the national vital statistics system to better track data on disadvantaged families.

Patrick McCarthy, the Casey Foundation’s senior vice president, said government officials should resist the temptation to cut back on spending for data collection and analysis because of the recession.

“Ensuring that policy makers and managers have the information they need to make critically important decisions can deliver an immense payoff in reduced waste and improved results for children,” he said.

The special report on the “data deficit” accompanied the regular section of Kids Count measuring how the 50 states fared in 10 categories of children’s health and well-being.

The report documented improvements since 2000 in the infant mortality rate, child death rate, teen death rate, high school dropout rate, and teens not in school and not working. Four areas have worsened: low-birthweight babies, children living with jobless or underemployed parents, children in poverty, and children in single-parent families.

The report noted with concern that the teen birth rate — after declining steadily for many years — rose from 2005 to 2006.

The data, gathered no later than 2007, did not reflect the impact of the economic meltdown. Casey officials said they expected the economy-related indicators to worsen in their next report.

In composite rankings for all 10 indicators, New Hampshire, Minnesota and Utah ranked highest, while Mississippi, Louisiana and Alabama ranked lowest. States with the biggest improvement between 1999 and 2007 were New York, Connecticut, Maryland, North Carolina and Illinois; states with the biggest drop in that span were Montana, Maine, Alaska, Pennsylvania, South Dakota and Vermont.

In its special report on national data, the Casey Foundation said “perhaps the single most glaring shortfall comes in our efforts to measure poverty, the key performance indicator that rises above all others in its impact on children’s futures.”

The poverty formula still used by the federal government, which Casey called “thoroughly outdated,” was developed in the 1960s. It calculates the cost of a basic grocery budget for a given family size and multiplies the total by three because food, in the ’60s, represented one-third of a typical family budget.

The formula has not been recalculated since then even though, according to Casey, food now accounts for only about one-seventh of a typical family’s budget.

The formula takes no account of child care, transportation, health insurance, and certain government benefits such as food stamps and housing vouchers. Also — except for Alaska and Hawaii — it does not reflect regional differences in the cost of living.

McCarthy said the National Academy of Sciences has developed some recommendations for a new formula that would take many of these additional factors into consideration, and a bill reflecting the proposals has been introduced in Congress.

Skeptics in various camps worry that any changes might cause harm by either increasing or decreasing the number of families officially defined as poor, said McCarthy. “But the reality is, we need an accurate count.”

The poverty measure — used to determine eligibility for various benefits — has been a source of concern to many advocacy groups over the years.

Kinsey Dinan, a senior policy associate with the National Center for Children in Poverty at Columbia University, said the current system potentially disadvantages families that don’t receive substantial government assistance and those living in areas with high living costs.

She said President Barack Obama‘s administration has shown interest in the issue and might be able to make changes through some sort of directive without waiting for Congress to act.

Under the current guidelines, the poverty level in 2009 is $22,050 a year for a family of four.

McCarthy said he is optimistic that the 2010 census will be more effective than the 2000 one in counting young children and low-income minorities. But he said additional funds may needed to ensure that the Census Bureau can complete a thorough count of hard-to-reach sectors.

The Casey report also calls for expanded federal data collection on young children, teen dropouts and teen births. It said budget woes have led the National Center for Health Statistics to reduce the sample sizes for some of its national surveys on children’s well-being.

The report recommends amending the No Child Left Behind Act to produce a more precise picture of students’ progress and standardize the states’ methods of calculating high school graduation rates.

In general, McCarthy said, state and county social service agencies are using outdated data collection and analysis methods, and in many cases have fallen far behind the private sector in this realm.

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