Senator STAFFORD. This is why you would then support Senator Pell's bill for a stretchout in reduction in impacted aid? Mr. BURKE. Yes. As the Senator knows, we have been very pleased this amendment was brought forward. We are watching this very, very carefully. Senator STAFFORD. I think you have already answered my next question to some degree. I heard other witnesses in front of this subcommittee suggest that since a State distributes its funds to its localities on an equitable basis so far as it can, and Federal aid is distributed as equitably as possible under the various categorical grants, does not impacted aid result in effect in a discrimination in favor of those areas which receive it, since this is additional money on top of the other which has been received. Mr. BURKE. In Rhode Island we have a reimbursable formula, that is we reimburse the school district for the funds they have spent in a previous year. In Rhode Island before the State reimburses it slices off the amount of Public Law 874 moneys for that very reason. VIEWS ON REVENUE SHARING Senator STAFFORD. Finally, let me ask you, Mr. Burke, do you prefer the present categorical system plus impacted aid over a program of special revenue sharing for education? Mr. BURKE. There are many aspects of revenue sharing for education that I find attractive. I think it provides the kind of leeway, flexibility, that the estate needs in order to bring about transformation of public education that is very vitally needed. On the other hand, the various proposals that I have seen for revenue sharing, while providing increased flexibility, would lead to such a diminution of the funds that were available that our capacity to improve education would be even more seriously affected than if we retained the present setup. Senator STAFFORD. My last question had to do with that. I assume the more money that might be available for special revenue sharing for education, the more attractive the concept might be. Mr. BURKE. I think so. I think the more thought that is given to the various areas of responsibility of various levels of government, for example, I think that the Senate and the House and the National Government generally have a very vital role to play, and I think they should retain the effect of what happens in education. So I think the total revenue sharing would be to disclaim too much of the accountability that we have from the national point of view. Senator STAFFORD. If revenue sharing were to be adopted by the Congress, to be successful it probably should not at least result in a reduction of Federal support for the school systems across the country. Would that be a fair statement? Mr. BURKE. Essentially even with continuing resolution and double funding, the Federal contribution to aid is declining significantly, and this is of course of great concern. We just, for example, finished our budget process in Rhode Island, and we went through the painful process of attempting to cross transfer to State accounts funds that were previously covered by Federal funds. I am not sure how our budget is going to fair because the increase is rather staggering for that reason. FEDERAL CONTRIBUTION Senator BEALL. Mr. Chairman, I just wanted to ask one question. Do you not mean the Federal contribution in gross dollars is declining? Mr. BURKE. No; as a percent of total cost. Senator BEALL. Thank you. Senator PELL. Senator Hathaway. Senator HATHAWAY. Thank you, Mr. Chairman. I have just one question. I thank you, Mr. Burke, for your testimony. I just wanted to ask you if there is any justification whatsoever for category B impact aid; I mean today. Mr. BURKE. There was. The more I look at it I think the justification certainly is in some degree of decline. The point I would make is that if any change in the support of category B is contemplated that it should be phased over a period of time because the system which exists has been constructed around the existence of those funds. Senator HATHAWAY. They have relied on it for so long? Mr. BURKE. Yes. There may be as in Rhode Island-some instances where one could build justification for it, but I would agree with you there is less justification for it than when it was originally enacted. Senator HATHAWAY. Thank you. Senator PELL. Senator Beall. Senator BEALL. Thank you, Mr. Chairman. Mr. BURKE. I gather from what you said about categorical aid programs as presently constituted tend to be overy restrictive to State and local administrations in responding to the very needs in their own States and districts; is that correct? Mr. BURKE. Yes. IMPACT OF "POLITICAL FACTORS" ON STATE DECISIONS Senator BEALL. As we continue these discussions, as far as categorical aid versus revenue sharing or block grant or the mix of the two, we have been hearing from different groups who come here-guidance counselors, librarians all saying, if you move away from categorical aid grants at the local level, we will be subjected to political pressures, which mean that we will get down to the bottom of the heap and we will be the last one considered. I wonder if as a State administrator you would like to comment on the effect or the impact that "political factors" have on the decisionmaking process in the State educational program. Mr. BURKE. I think it varies from State to State. That is one of the reasons I urged flexibility. I think increasingly as our ability to manage complex educational systems improves, the extent to which we can mesure output as input, we find out how well we are doing in terms of what we can accomplish, then I think the kinds of decisions which lead to putting so much money into libraries, books, classroom space and other kinds of input variables, can be decreased. We hold local systems accountable on the basis of what they can accomplish. Then I think the decision as to whether funds should flow into libraries as opposed to other aids can be made at a local level. Senator BEALL. Rather than at the State level? Mr. BURKE. Yes. Senator BEALL. Thank you. Senator PELL. Thank you very much indeed, Dr. Burke. It is always a pleasure to have you here. [The prepared statement by Dr. Burke follows:] UNITED STATES SENATE COMMITTEE ON LABOR AND PUBLIC WELFARE EDUCATION SUBCOMMITTEE HONORABLE CLAIBORNE PELL, CHAIRMAN SEPTEMBER 14, 1973 STATEMENT OF DR. FRED G. BURKE COMMISSIONER OF EDUCATION STATE OF RHODE ISLAND AND PROVIDENCE PLANTATIONS FINANCIAL ASSISTANCE FOR LOCAL EDUCATIONAL AGENCIES IN AREAS AFFECTED BY FEDERAL ACTIVITIES (PUBLIC LAW 81-874) Mr. Chairman, members of the committee: I am Fred G. Burke, Commissioner of Education in Rhode Island, speaking as an education administrator. It is my understanding that the Committee wishes to confine its discussions today to P.L. 81-874 Financial Assistance for Local Educational Agencies in Areas Affected by Federal Activities and I will so address my remarks. I want to thank you for this opportunity to share with you some of my thoughts on the dilemma being faced by local school officials, municipal officers, and Chief State School Officers in coping with the prospective alterations in P.L. 874 support funds. In 1950, with passage of this far-reaching legislation, the Federal government entered into a partnership with those local school districts affected by federal installations within their jursidictions. Over the years, the commitment of the federal |