States, it would be interesting to know how much money to meet Kentucky's proportion of the $300,000,000 assessment is taken from Kentucky. I think we could get those figures. Mr. MORTON. From income taxes? Mr. GWINN. Yes, and from other Federal taxes. Mr. MORTON. Well, from the income tax you would not take out, under the terms of this bill, as much as goes back. Kentucky would receive, under the bill, some $7,000,000, and there would not be that much in income taxes that went out. Of course, we have enormous excise taxes that are collected in Kentucky, but obviously they are paid by the ultimate consumer of the product, whatever that may be. Mr. GWINN. Well, our Federal Government is unquestionably impoverishing some of the rich States, so that they find themselves crippled. Their citizens are so crippled that the amount of money they have left is not sufficient. They say that is the condition in Newark, for example; they cannot get, by income taxes or sales tax, or any other device they can find, enough money to educate in a State as rich as New Jersey. So, what is the tendency? The tendency is for Kentucky to cry out to Washington, and in a few years for New Jersey to cry out, and after a while, there will be no place to cry out to. The Federal Government will have exhausted its wealth. How much of a surplus has Kentucky got today? Mr. MORTON. Kentucky has $24,000,000, of which $9,000,000 is appropriated for school buildings, hospitals, and so forth, on which the work has not been accomplished because of the war. Mr. GWINN. That is her current surplus, $24,000,000? Mr. MORTON. Yes, sir. Mr. GWINN. Do you know what her accumulated surplus is? Mr. GWINN. That is the total surplus? Mr. MORTON. Yes, sir. Mr. GWINN. Thank you. Mr. OWENS. I have just glanced through your bill, and it appears to be very well written. I think the explanation I have heard is very good, too. The thing that bothers me is the situation concerning what we are doing here in Congress. It is difficult for me to sit here and listen to these pleas, based upon fact, for aid to education, and which requires a comparatively few million dollars, and then we asked to send hundreds of millions of dollars, and billions, over to Europe and Asia. It is difficult for me to understand why it is that the States which need most of this money seem to be the people who are for sending money over to Europe and Asia. Mr. MORTON. The people who want to send the money to Europe need this help? Mr. OWENS. They are the ones who are voting solidly to send the money to other countries, and still they need this help. Mr. GWINN. That is an interesting question. Mr. MORTON. I think Kentucky is not one.. Mr. OWENS. Well, Kentucky is one who needs the help, and Kentucky is going to give away more than it will receive. Do you not believe that? In other words, the amount of taxes being paid out by Kentucky to the Federal Government is certainly as great as the return it gets on this educational program. Do you not think that is so? Mr. MORTON. Over all, you mean for all purposes? Mr. OWENS. Yes. Mr. MORTON. Kentucky is in the lowest bracket in per capita income. We are not a wealthy State. Mr. OWENS. I do not know just what the rest of them do. Take Alabama, Mississippi, Georgia. Is it not true they are all voting solidly to send the money to Europe and Asia? Mr. MORTON. Well, we will know after the roll eall on Friday. Mr. OWENS. You do not have to wait for the roll call. What is your thought about that? Mr. MORTON. I am speaking for Kentucky, and Kentucky has not been solid for sending the money over. Mr. OWENS. Perhaps that is right. And perhaps they are right. I do not believe they are. I believe education in the United States is a mighty important matter, very important. When I see them taking $2,000,000 away from the Navajo Indians, which they need badly, and taking some of these other appropriations from Alaska, and from the hospitals, and sending the money over to Europe, I just cannot figure the matter out at all. Perhaps these men who are coming in here for this help on education can explain it to us, but until they do, I know what my position will be. That is all. Mr. GWINN. I think that raises a very interesting line of reasoning for us. If we take the total share that Kentucky must pay of the $37,000,000,000 Federal budget; if we cut that down by 30 percent; if we cut the Federal employees down from 2,300,000 to 1,000,000 employees, and thereby save $10,000,000,000 from that process alone, Kentucky would have plenty of money to meet the thing you are talking about. Mr. MORTON. We have a State income tax. We cannot get very far with it because we have a Federal income tax. If the Federal income tax were greatly reduced, and that allowed us to raise our tax in some form in Kentucky-our ability to pay taxes in the final analysis, depends on per capita income. Mr. GWINN. That is where we are all committing mortal sins against our States and against the children, that somehow or other we have allowed such a terrific burden to be placed on ourselves through this Federal Government, as if we ourselves back home did not have to pay it, until we are now actually developing helpless States, helpless cities, helpless citizens. Our citizens cannot build a house today. I mean, half of them cannot build houses today because of the share they have to bear in the over-all management of the Federal Government and their share in this $37,000,000,000 budget. Mr. OWENS. Will the gentleman yield there? Mr. GWINN. Yes. Mr. OWENS. Even if they did build a home for a family of five, that would be equivalent to $10,000, which would be equivalent to their share of the national debt, is that not right? Mr. GWINN. That is about right. Mr. McCOWEN. You are in favor, I take it, of as near equalization of educational opportunity as possible? Mr. MORTON. Yes, sir. Mr. McCowEN. Of course, you are aware of the fact that in a lot of these so-called wealthy States there are large areas that are very poor, financially. Mr. MORTON. Yes, sir. Mr. McCowEN. There are also poor districts spotted here and there, over these wealthy States. Mr. MORTON. Yes, sir. Mr. McCOWEN. I believe you will agree that those States that give us so many millions should be entitled to receive something back in order to be able to equalize the areas to which I have referred. Mr. MORTON. Yes. Mr. LANDIS. I think Mr. Morton's main point is-and I want Mr. Gwinn to get this point: Kentucky pays revenue from excise taxes, and they have no chance of getting this money back. It would be interesting to know how much money Kentucky pays on excise taxes. They are taking this fund out of Kentucky and they have no chance to get that back, and by this educational bill they would have a chance to get something back. Now, they may pay a bigger percent than they should, or than they can afford. I would like to have the figures on the excise taxes, or all of the taxes, that Kentucky pays in. They may be out of proportion to the other States. (The information is as follows:) Federal taxes collected in Kentucky during the fiscal years 1945 and 1946 Corporation taxes: 1945 1946_ Individual taxes exclusive of withholding from salaries and wages: 1945 1946_ Taxes withheld from wages and salaries: 1945 1946 Miscellaneous (includes corporation excess-profits tax): 1945 1946_ Employment taxes, including the carriers' taxes: 1945_ 1946_ Total 1945. Total 1946_ $31,775, 578 32, 570, 184 78, 226, 311 80, 981, 660 56, 834, 410 61, 305, 340 516, 619, 995 518, 275, 260 15, 498, 279 16, 194, 447 698, 954, 573 709, 326, 891 Kentucky paid 1.74 percent of total internal revenue payments for fiscal year ended June 30, 1946. Kentucky's per capita income for calendar year 1945 was $735; whereas such income for entire United States was $1,153. For 1946, for entire United States, per capita income was $1,170. Figure not available for Kentucky, but probably estimate is about $745. Mr. OWENS. Mr. Chairman, may I ask how this compares with H. R. 2593? Mr. MORTON. They are about the same. Mr. OWENS. That is all. Mr. McCOWEN. On behalf of the committee I want to thank you, Mr. Morton. Mr. MORTON. Thank you. Mr. McCowEN. We have with us as our next witness one of our colleagues, the Honorable Laurie C. Battle, of Alabama, who introduced H. R. 1870. Mr. Battle, will you identfy yourself for the record? STATEMENT OF HON. LAURIE C. BATTLE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ALABAMA Mr. BATTLE. I am Laurie C. Battle, representing the Ninth District of Alabama. I appreciate the opportunity of appearing here. There are several important points which I would like to emphasize as we consider Federal aid to education without Federal control. (H. R. 1870 is as follows:) [H. R. 1870, 80th Cong., 1st sess.] A BILL To authorize the appropriation of funds to assist the States and Territories in financing a minimum foundation education program of public elementary and secondary schools, and in reducing the inequalities of educational opportunities through public elementary and secondary schools, for the general welfare, and for other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "Educational Finance Act of 1947." SEC. 2. No department, agency, officer, or employee of the United States shall exercise any direction, supervision, or control over, or prescribe any requirements with respect to, any school, or any State educational institution or agency, with respect to which any funds have been or may be made available or expended pursuant to this Act, nor shall any term or condition of any agreement or any other action taken under this Act, whether by agreement or otherwise, relating to any contribution made under this Act to or on behalf of any school, or any State educational institution or agency, or any limitation or provision in any appropriation made pursuant to this Act, seek to control in any manner, or prescribe requirements with respect to, or authorize any department, agency, officer, or employee of the United States to direct, supervise, or control in any manner, or prescribe any requirements with respect to, the administration, the personnel, the curriculum, the instruction, the methods of instruction, or the materials of instruction, nor shall any provision of this Act be interpreted or construed to imply or require any change in any State constitution prerequisite to any State sharing the benefits of this Act. APPROPRIATION AUTHORIZED SEC. 3. For the purpose of more nearly equalizing public elementary-school and public secondary-school opportunities among and within the States, there is hereby authorized to be appropriated for the fiscal year ending June 30, 1948, the sum of $150,000,000; for the fiscal year ending June 30, 1949, the sum of $200,000,000; for the fiscal year ending June 30, 1950, and for each fiscal year thereafter, the sum of $250,000,000 to be apportioned to the States as hereinafter provided. APPORTIONMENT SEC. 4. Ninety-eight per centum of the funds appropriated under section 3 of this Act shall be apportioned to the respective States, excluding those enumerated in subsection (G) of this section, in the following manner: (A) Multiply (a) the number of children from five to seventeen years of age, inclusive, in each State, as determined by the Department of Commerce, for the third year next preceding the year for which the computation is made by (b) $40. (B) Multiply (a) the average annual income payments for each State, as determined by the Department of Commerce, for five years including the third, fourth, fifth, sixth, and seventh years next preceding the year for which the computation is made by (b) 1.1 per centum. (C) If, for any State, the amount calculated under (A) exceeds the amount calculated under (B), the difference shall be the amount of Federal aid due each such State. (D) Determine the percentage ratio of (a) the amount spent in each State from local and State revenues for current expenditures (excluding interest, debt service, and capital outlay) for public elementary-school and public secondary-school education for the third year next preceding the year for which the computation is made, to (b) the average of the annual income payments for each State, as determined by the Department of Commerce, for five years including the third, fourth, fifth, sixth, and seventh years next preceding the year for which the computation is made. When the percentage ratio thus determined in (D) for any State is less than 2.5, the amount of Federal aid due each such State, as computed under (C), shall be proportionately reduced. (E) Determine the percentage ratio of (a) the estimated current expenditures (excluding interest, debt service, and capital outlay) in each State from local and State revenues for public elementary-school and public secondaryschool education for the year for which the computation is made, to (b) the average of the annual income payments for each State, as determined by the Department of Commerce, for the most recent three years, for which annual income data are available in the year next preceding the year for which the computation is made. When for any year the percentage ratio thus determind for any State, after the fourth year of the operation of this Act, is less than 2.2, such State shall be ineligible to receive any part of the funds authorized in section 3 of this Act for the year for which the computation is made, and shall remain ineligible for that year until such time as revised estimates of expenditures, as determined in the preceding paragraph of this subsection, produce a percentage ratio equal to or greater than 2.2. (F) In the event 98 per centum of the funds authorized for any fiscal year in section 3 of this Act are insufficient to pay to all eligible States the full amount of Federal aid due each such State, as computed in subsections (A), (B), (C), and (D) of this section, the amount of Federal aid paid to each eligible State shall bear the same ratio to the amount of Federal aid due each such State as the total amount of Federal aid paid to all eligible States bears to the total amount of Federal aid due all eligible States. (G) From not to exceed 2 per centum of the funds appropriated under section 3 such sums as may be necessary shall be apportioned by the Commissioner to Alaska, Hawaii, the Canal Zone, Puerto Rico, American Samoa, the Virgin Islands, and Guam according to their respective needs for additional funds for public elementary and public secondary schools upon the basis of joint agreements made with their respective State educational authorities. CERTIFICATION AND PAYMENT SEC. 5. The United States Commissioner of Education shall certify regularly the amounts allotted under this Act to each State that has accepted the provisions of this Act to the Secretary of the Treasury, who shall, through the Division of Disbursement of the Treasury Department and prior to audit or settlement by the Geenral Accounting Office, pay to the treasurer or corresponding official of such State the amount certified for each fiscal year in four equal installments, as soon after the first day of each quarter as may be feasible, beginning with the first quarter of the fiscal year for which appropriations made under the authorization of this Act are available. Each such treasurer shall account for the moneys received, and shall pay out such funds only on the requisition of the State educational authority. AVAILABILITY OF APPROPRIATIONS SEC. 6. (A) In order more nearly to equalize educational opportunities, the funds paid to a State from the funds appropriated under section 3 of this Act shall be available for disbursement by that State to local public school jurisdictions, or other State public education agencies, for all types of current expenditures (excluding interest, debt service, and capital outlay) for public elementary school and public secondary-school education. (B) No provision of this Act shall be construed to delimit a State in its definition of its program of public education: Provided, That the funds paid to a State under this Act shall be expended only by public agencies and under |