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categorical programs to meet emerging new areas of need which require special stimulation.

However, categorical programs simply cannot be permitted to grow indefinitely. Once special needs have been recognized at the State and local level and efforts to meet them are underway, it makes little sense for either the Congress or the Office of Education to continue to sit as a national school board, telling States and communities in great detail what they should spend and how. Such programs should be replaced by broader forms of Federal aid. Once areas of particular national interest have been identified and broad objectives established in the law, the States and localities should be encouraged to find their own means of achieving the stated national objectives. They should not be circumscribed by detailed guidelines and regulations which assume that Washington knows best how to deal with problems which differ in degree and intensity from State to State, from district to district, and even from school to school.

If categorical Federal aid continues to proliferate, it will become more and more difficult for the 50 States to plan and operate effective programs tailored to their own educational needs and problems. There is no doubt that the States need Federal help. There is no doubt that the States must work together to achieve certain broad national educational objectives. But there is increasing evidence that the present structure of Federal aid cannot provide the kind of assistance that the States can use most profitably.

The distortion of State educational priorities and the shortchanging of other promising programs in order to qualify for the available Federal funds, particularly in the case of those programs which require matching funds, is another major problem that exists under the current maze of Federal categorical programs.

HOW EDUCATION REVENUE SHARING WOULD WORK

In order to provide better delivery of funds, the education revenue sharing bill would replace 33 existing Federal formula grant programs in the elementary and secondary field with a single program which would automatically distribute funds to the States by formula. The funds would be used for five broad areas of national concern: education of the disadvantaged, education of the handicapped, vocational education, assistance for schools in Federally affected areas, and supporting educational materials and services.

In the case of the disadvantaged and of pupils whose parents live and work on Federal property, funds would pass through directly to the local educational agencies as a matter of right. The rest of the money would go to the States for distribution in accordance with a State master plan.

The education revenue sharing bill would allow a State flexibility and responsiveness in the use of the Federal funds within its borders. Up to 30 percent of the funds for vocational education, education for the handicapped, and supporting materials and services could be shifted to any other of the national purpose areas which the State determined to be a higher priority in that State. Similarly, 30 percent of the funds for Federally connected children living off Federal property could be transferred to school districts not having any such children.

Such determintion would be made in the process of creating a comprehensive State plan for the use of Federal education funds. The plan would be a comprehensive plan, not one designed to satisfy the conditions of a narrow categorical grant.

The plan would be comprehensive and involve real planning by State and local people who could make a genuine effort to decide objectives, establish priorities, identify resources, and establish valid yardsticks for the measurement of success. The comprehensive plan would be developed as the result of broad public debate within the State and with the assistance of an advisory council representative of the persons served by Federal education programs. However, the plan would be entirely the work of the people of the State. There would be no requirement for submission of the plan to the Federal Government for approval. Similarly, the way funds would be used within each of the five national purpose areas would be a matter for determination within the State, subject to necessary Federal requirements. State and local administration costs would be reduced since most of the tedious and expensive grant application process would be eliminated.

THE NEW FEDERAL ROLE UNDER REVENUE SHARING

In my view, one of the most significant aspects of the education revenue-sharing concept is the new Federal role which will emerge as the result of this legislation and through enactment of the President's proposal for a National Institute of Education.

Our re-examination of the Federal role has focused on how we can encourage responsible people at the State and local level to respond to matters of direct national interest or concern. In view of the increasingly evident bankruptcy of the categorical grant-in-aid device, we have concluded that the Federal role should be to stimulate the development of knowledge and the identification of significant opportunities for innovation. The Federal role should also be to communicate what we have learned to State and local school officials and to provide assistance for putting into effect what we have learned.

This means, then, that we need first of all to strengthen the capacity knowledge. And this objective, of course, underlies the proposal to establish the National Institute of Education, which, as you know, is in both the House and Senate versions of the higher education bill. Secondly we need to develop much more vigorous techniques for assessing the potential value of what has been discovered through research, development, testing, pilot programs, and so on.

I think it is fair to say, speaking not only of research programs in the Office of Education, but of a majority of the R. & D. efforts within HEW, that there has been a major shortfall between the performance of research and its translation into practice. We have simply not had in place the machinery that forced a rigorous assessment of the value of an R. & D. product. Until such machinery is in place, we have no way of deciding what results are important enough to disseminate to those in a position to put them into effect. The creation of this dissemination machinery for educational innovation is a necessary second step to follow up the work of the NIE.

The third major step, apart from communication of opportunities to strengthen and improve the quality of education, is the need for technical assistance in bringing these things into realization. We

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have a number of thoughts about this problem, and Commissioner Marland and his colleagues are currently giving consideration to it. This will require the availability to State departments of education and local school systems, of OE personnel in the Office of Education who have heretofore been absorbed in the endless and repetitious processing of applications, to work with State and local school systems to help them achieve the results which the State and local officials want to achieve.

In other words, we believe the Office of Education should be staffed with people who know the resources of the Office of Education; who know the results of innovative work that has been carried out through the research and development process; who are sensitive to the needs, views and attitudes of the administrators with whom they are dealing; and who are effective in helping them to adapt the results of new learning and new experience to the particular community with which they are concerned. The President's proposal for education revenue sharing needs to be understood in terms of how it will enable us to do our job better, as well as in terms of what it means to the State and local school districts.

I would now like to ask Commissioner Marland to speak in greater detail about how the education revenue sharing legislation would work.

Chairman PERKINS. Please proceed, Doctor Marland.

STATEMENT OF HON. SIDNEY P. MARLAND, JR., COMMISSIONER OF EDUCATION, ACCOMPANIED BY DUANE MATTHEIS, DEPUTY COMMISSIONER FOR SCHOOL SYSTEMS

Commissioner MARLAND. Mr. Chairman and members of the Committee, I would like to follow Mr. Kurzman's explanation of why education revenue sharing is necessary with an explanation of how it will work and how it will help to alleviate the very problems Mr. Kurzman has just described.

1. ALLOTMENT AND USE OF SHARED REVENUES

From the amount appropriated, an amount attributable to the presence within the school district of pupils with a parent who resides on Federal property-similar to the present "A" category pupil under Public Law 874 would be passed through directly to the district enrolling the student. These funds would be available for any educational activity, just as they are under the existing Impact Aid program.

Once this amount had been subtracted from the total, the remainder would be allotted among the States based on their relative populations of children from low-income families, of children whose parents work on Federal property, and of all children aged 5-17. That portion of a State's allotment attributable to the presence of low-income children would be allotted directly to the district enrolling such children, and would be available only for programs and projects designed to meet the special educational needs of educationally disadvantaged children who reside in school attendance areas having high concentrations of low-income families. These funds could also be used for special pro

grams for migrant children and for neglected or delinquent children for whose education the State is directly responsible.

Funds based on the presence of "B" category Impact Aid children could be used for any educational purpose, as under current law. Of the remainder, one-sixth would be available for education of the handicapped, one-third for vocational education, and one-half for supporting materials and services. These funds could be retained at the State level for operation of Statewide programs or distributed among local educational agencies according to relative needs for the types of assistance available.

It should be noted here that the Federal commitment to the disadvantaged is maintained and even strengthened through revenue sharing. The bill provides (1) that no funds may be transferred away from this purpose; (2) that all funds for the disadvantaged will pass through directly to the local school district; (3) that full comparability on basic expenditures among schools in a local district must be achieved as a precondition to the receipt of any of these funds; and (4) that the definition of "low-income family" will be sufficiently responsive to local conditions to assure that funds flow to districts most in need of them.

2. TRANSFERS AMONG PURPOSE OF ASSISTANCE

The State would be permitted to transfer up to 30 percent of the funds available for any one purpose to any other purpose, except that, as noted earlier, the bill would prohibit the transfer of funds allocated for the disadvantaged.

Additional transfers above the 30 percent limit would be permitted if the State demonstrated to the satisfaction of the Secretary that such action would more effectively achieve the purposes of the act.

3. OPERATION OF THE PROGRAM

The chief executive officer of each State which desired to participate under the act would be required to designate a State agency to administer the program. The chief executive officer would also be required to appoint a State advisory council broadly representative of the education community in the State and of the public, including representatives of public and nonprofit private schools; representatives of the populations in the State affected by activities under the act; persons with special competence in the planning, evaluation, and assessment of education programs; and persons with special competence in the education of the disadvantaged, the handicapped, and vocational education.

The designated agency would, for each fiscal year, develop and publish a plan for the distribution and expenditure of funds under the act. The plan would be developed in consultation with the State advisory council and would not be adopted finally until a reasonable opportunity had been given to interested persons for comment.

4. SPECIAL PAYMENTS

From the sums appropriated under the act, the Secretary could reserve up to 10 percent for making payments to any State to assist

it in carrying out activities under the act which are designed to further achievement of national policy objectives in education.

5. PARTICIPATION OF NONPUBLIC SCHOOL CHILDREN

The bill also provides that, except where prohibited by State law, the equitable participation of children enrolled in nonpublic elementary and secondary schools would be provided in the disadvantaged, handicapped, vocational, and support services areas. Where existing State law prevents the participation of nonpublic school children the Secretary will arrange for those children to receive similar services and will pay for the services from the State's allotment.

Of course, title to and control of funds received and of equipment purchased under this act will remain with the State or local education agency.

6. CIVIL RIGHTS

In the civil rights area, the bill provides that revenues shared with States and local districts under this act shall be considered as Federal financial assistance within the meaning of title VI of the Civil Rights Act of 1964.

7. TRANSITION FROM EXISTING PROGRAMS.

Finally, the act authorizes the appropriation of such sums as may be necessary to enable the Secretary to make payments to States to assist them in planning for the transition from the existing system of categorical grants repealed by this act to the new system of revenue sharing for education.

REACTIONS TO THE BILL

Quite gratifyingly to me, our revenue sharing bill has received considerable favorable attention within the education community. Although some individuals and organizations have criticized various specifics in our proposal, the majority of those concerned-including our critics have long endorsed the concepts of grant consolidation and program simplification embodied in this legislation. We are also encouraged by the response to our emphasis on the shift of greater decisionmaking responsibility to the State and local levels.

Criticisms of the bill have so far clustered around three points: the adequacy of the level of funding, particularly as compared with so-called "full-funding" of existing categorical programs; the capacity of the States to administer the revenues shared; and the adequacy of the civil rights safeguards in the bill.

1. LEVEL OF FUNDING

Some critics have argued that "there isn't enough money in education revenue sharing." To me this indicates a misunderstanding of our proposal. It is not intended to be a general aid to education bill. The bill specifies no authorization ceiling, only "such sums as may be necessary." As is normally the case with authorizing legislation, the level of funding available under this act will be a function of the annual appropriations process.

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