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Mr. GOODLING. I was just thinking that perhaps with the antimilitary feeling I hear all around the Congress perhaps this might be the next area.

Mr. Ford. No, quite the contrary,
Mr. GOODLING. In the past it has been otherwise.

Mr. Ford. There is some impact on military in the case that was described here in Montgomery County, Ala. There is clear discrimination against the entire military families. But for the most part if you take a look at the dislocation of funds in the formula it is category B children who are not except for a very few military dependents.

Mr. Goodling. I have no other questions.
Mr. FORD. Mr. Zeferetti?
Mr. ZEFERETTI. Thank you, Mr. Chairman.

Mr. Husk, just one question. You pretty much targeted in on the public housing aspects of the bill. I am concerned, corning from New York City myself, do you find in this amendment whether there is any foreseeable additional dangers or losses that you see as part of this amendment being passed coming to New York City or other big cities?

Mr. Husk. Of course you are working with some deficits to start with. When you try to compare Federal revenues coming into cities like New York last year versus this year, if that is what your question is. For example last year in New York you have a situation where with the title I formula you are going to be in a continuing cycle of downward spiral until I think you will probably reach a level of about 63 percent of your 1974 entitlement, which I guess in overall reductions it will be very substantial a decrease, probably $50 million of revenues coming into New York City public schools.

Therefore it is very important for New York City to see the law moved forward so that, looking beyond the first tier, which is the 25 percent, which gives us a fairly accurate picture how the moneys are being distributed, and through the second tier, which is a savethe-harmless type of tier, which takes care of school districts which are normally a part of the program and then again for the third tier, where from that point on cities like New York and Philadelphia and Chicago, very, very large cities, will continue to get substantially large parts of the tier 3 money.

So looking at it from their point of view they are just revenues received from the Federal Government. In the future I think it is important for them to be looking at the tier 3 aspect of the program.

By this amendment of course you are not getting into that tier type of structure. You are putting a ceiling in the authorization bill on the amount of money that can be spent for that particular program.

And we really don't know if the Perkins amendment would pass what would happen next year. Would you extend the Perkins amendment for another year? Or what would happen while the Congress and while this committee deliberated and tried to make changes in the legislation? So you might be stuck with a ceiling on those public housing children which would be hard to pick up.

Mr. ZEFERETTI. Do you feel the amendment itself is separating the urban area from the rural area?

Mr. Husk. We feel that the public housing in urban areas by this type of amendment singling out that particular part of the program could jeopardize what we felt was one of the accomplishments of the bill, which was a way of building public housing as an integral part of the impact aid program with the tradeoffs that the cities were willing to make, for example no funding in tier 2.

Each tradeoff that they were willing to take, elimination of title I, part C, was another tradeoff that was made plus a new formula Mr. Ford put in under title I where 27 cities had $22 million lost in revenue as opposed to 1974 even though the total increase in appropriations under title I was part of a 9-percent increase, which will show you the loss.

So I think the concern you raise is a concern that New York and Chicago and Philadelphia have, particularly those three larger cities.

Mr. ZEFERETTI. Also getting back to something the chairman said before, if in fact there is no bill where are we? Where do we go? Or would you rather see a different type of legislation or maybe a tightening up of a piece of legislation of different types of aspects of the bill?

Mr. Husk. I think that the point that was made by the chairman, by Mr. Ford, about the data is a legitimate point. I don't think that when the legislation was passed, when the reforms were passed, that it was the intent of the committee to eliminate some cities, some school systems, from the impact aid law who were not known at that time, what I mean is school districts where you really do have military bases and where the total operation of the school is dependent upon that source of revenue.

I think they were really focusing on trying to eliminate Montgomery County and Fairfax County and the wealthy counties where there are employees of the District of Columbia and places like it. There may be need for some reforms in the legislation.

I think basically we would say that we ought to let the legislation go forward, see what the effects are. If we see adverse effects then Congress can take two kinds of corrective action to either, immediately go into a supplemental appropriation posture and take care of those places that have been adversely affected as they have historically done in the past under title I.

In 1972 I believe there were 36 million dollars in revenues lost to States including the chairman's State. When that was detected by the Congress the Congress took action and corrected it.

There is also a possibility that they would go back and make certain amendments to correct the 93–380 legislation and perfect that too and make it so that it would be equitable for all.

I guess our concern is that once you delay it it is already delayed 1 year. If you delay it again what that portends for the future, whether that might mean a disintegration of everything that has been accomplished in the amendments of 1974.

Mr. ZEFERETTI. Thank you.
Mr. Ford. Thank you very much, Mr. Husk.
Mr. Frederick Weintraub, Council for Exceptional Children?

Without objection the prepared statement of Mr. Weintraub is submitted and will be printed in full at this point in the record.

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You may proceed.
[Statement of Frederick J. Weintraub follows:]

STATEMENT OF FREDERICK J. WEINTRAUB, ASSISTANT EXECUTIVE DIRECTOR FOR

GOVERNMENTAL RELATIONS, ON BEHALF OF THE COUNCIL FOR EXCEPTIONAL CHILDREN

Mr. Chairman, Members of the Committee, Thank you for affording The Council for Exceptional Children this opportunity to appear before the Committee today to express our strong endorsement of your proposal to seek a July 1 release of monies under the new weighted formula for handicapped children in the Impact Aid program. We refer specifically to Subsections (A), (B), (C), and (D) of (6) of H.R. 5181.

As you know, Mr. Chairman, The Council for Exceptional Children is a national organization with a membership of approximately 65,000 professionals in the field of special education, that is, the special education of both handicapped children and gifted and talented children. I am Frederick J. Weintraub, CEC Assistant Executive Director for Governmental Relations.

As you well know, Mr. Chairman, under the aegis of P.L. 93–380, the House Education and Labor Committee sought to deal on an immediate basis with an urgent situation relative to handicapped children which was a direct response to two realties: the impact on certain school districts of the procedure of military compassionate transfer and the fairly recent cutoff of most educational services for some handicapped dependents of active and retired military under the CHAMPUS program (Civilian Health and Medical Program of the Uniformed Services).

Active military personnel with handicapped dependents are enabled, through the vehicle of a “compassionate transfer" to assume and retain indefinitely duties at locations where the school systems will provide programs to meet the special needs of their children. For a given school district, the situation which develops is apparent: the school system is already bearing the considerable expense of providing relatively decent special programs for its handicapped children. Moreover, because that school district doing this relatively good job, it receives a higher than normal number of handicapped enrollees because of de facto federal policy which promotes the enrollment of handicapped children who are military dependents in such districts.

The CHAMPUS situation may be briefly summarized as follows: subsequent to a Department of Defense review of CHAMPUS assistance, children primarily with specific learning disabilities and those that are considered emotionally disturbed were denied further eligibility for special education and related services under CHAMPUS because such services were deemed to be beyond the scope of CHAMPUS authority.

Again, federal policy, i.e. a reversal of same, has a substantial impact on given school districts. Without access to CHAMPUS funding, the population of children in question is being presented to the public schools for enrollment, with all of the attendant consequences of such a sudden infusion for both the school systems and the educational well-being of the handicapped children themselves.

The Congress responded, and laudably so, to an emergency situation with what may be described as an “emergency alteration" in the impact aid formula. The Congress ordered that, for the purposes of computing the amount to which a local educational system is entitled under the Impact Aid program, the Commissioner shall count as 112 children any handicapped child who is a military dependent when the recipient local educational agency is in fact providing a program designed to meet the special educational and related needs of such children,

It is quite apparent, Mr. Chairman, that the basic objective of this weighted formula includes a vital element of tinieliness; and, correspondingly, every month of delar in the actual allocation of the additional monies generated by the weighted factor further dissipates fulfillment of Congressional intent. We therefore congratulate you. Mr. Chairman, for your own timely efforts to guarantee the earlier possible allocation of monies, and we urge your colleagues on the full Committee and yonr colleagues in the full House to support your legislative objective in this specific regard. Thank you, Mr. Chairman,

STATEMENT OF FREDERICK J. WEINTRAUB, ASSISTANT EXEC

UTIVE DIRECTOR FOR GOVERNMENTAL RELATIONS OF THE COUNCIL FOR EXCEPTIONAL CHILDREN, RESTON, VA.

Mr. WEINTRAUB. Thank you. The Council for Exceptional Children appreciate this opportunity to appear before the committee to speak solely to the question of the carrying out of the operations of Public Law 93–380 pertaining to counting handicapped children in impact aid.

We will focus our comments on that provision and not with the greater substances of the legislation before you today.

Mr. Chairman, the history or background as to why the Congress went to the point of counting as one and a half each handicapped child is based upon two very succinct realities. One is the fact that under the compassionate transfer program military school districts who are attempting to serve their own handicapped children in their community all of a sudden find themselves with vast numbers of new handicapped children if they have a military base located near them. If you are doing a good job the word gets out. The military knows it.

Under the compassionate transfer program military personnel are transferred to that community where services for handicapped children are available.

Mr. Ford. As a matter of fact, if I may interrupt you, it works the other way too. If a handicapped child is involved in a programsuppose that a military person who is here in Montgomery County near Washington is working at the Pentagon and the military say, “We would like to have you someplace else," that person can now go in and say, "What if that someplace else doesn't provide the kind of school service that my child needs ?”

So the school system would also retain this child.

Mr. WEINTRAUB. Definitely that can be the case. The committee considered that in the development of this amendment. There was one that I knew in Champlain, Ill., where one September morning school opened and found themselves with 20 new deaf children. I don't know what is the cost of educating a deaf child. But to all of a sudden have 20 new deaf children in a relatively small community at your door step, that is a monumental cost to a school district.

The second factor is the changing practices taking place in the CHAMPUS program, which is the Civilian Health and Medical Program of the Uniformed Services. For years rather substantially handicapped children were having their education purchased at private schools with the cost being assumed by CHAMPUS.

However recent changes in the CHAMPUS programs have begun to cut back on those funds and in fact handicapped children who were other than profoundly medieally involved children have been totally cut off from any support. This is in fact resulting now in increased numbers of handicapped children coming to the local school systems, which has increased over the last several years.

The point I make is that the changes in CHAMPUS have brought an additional burden in the last year or two. Basically therfore our position is that the Congress is 93–380 attempted to respond to an

emergency situation with an emergency alteration of the impact aid formula.

We don't feel that the intent of the Congress would be well served by delaying any longer the actual implementation of this amendment. We are pleased to see that the bill before this committee today would not delay that implementation and thus support that provision.

Thank you very much, Mr. Chairman.

Mr. FORD. You do understand that the Perkins bill is drafted so that it does not delay

Mr. WEINTRAUB. Yes, sir, we support that provision in the Perkins bill.

Mr. Ford. Mr. Goodling?
Mr. GOODLING. I have no questions.

Mr. FORD. Mr. Meeds? Since Mr. Meeds is here I would like to raise a question with anybody in the room who would like to respond. When we asked the Commissioner of Education what they were doing about figuring out how the Meeds-Ford-Quie amendment-I am being kind to you by accepting any responsibility for that

Mr. MEEDS. I understand.

Mr. FORD. With regard to States taking impact aid into account for the purpose of distribution of State funds and equalization was going to develop, Dr. Fish, maybe you could tell us in your contract with the Office of Education, have you been able yet to come up with an estimate of which States are going to be affected ?

Dr. Fish. At the regional meeting held in San Jose, Calif., the final copies were not available of those equalization guidelines. They have been promised for later on this month. I have been informed by the office of SAFA that a narrow determination of guidelines had been developed that used one of the three alternatives presented previously and which in their eyes limited it to three States. I believe they were Hawaii, which is a freebie because that is a single district, New Mexico, and Florida. I am operating from memory there. I will correct my remarks later if I am wrong. But it was those States at that time.

Mr. FORD. That is ironic since a Senator from Kansas was responsible for getting the thing started and Kansas didn't get in.

Mr. Meeds?

Mr. MEEDS. Mr. Chairman, if the chairman will yield, is it your understanding that that was under the formula which took I think 10 percent off the top and 10 percent from the bottom and then said it couldn't deviate more than 20 percent?

Dr. Fish. They removed the top 5 percent of the districts and the bottom 5 percent and said they could not deviate in over 20 percent.

Mr. MEEDS. I will just say for the record that I certainly think that is a reasonable approach. There may be some for whom that will cause problems. But I think if we stick to that kind of strict interpretation we are going to get the kind of results that Mr. Ford and I were trying to accomplish and that was to allow the counting of impact aid money only when a State was making a bona fide effort to truly equalize.

And after taking off the top 5 percent and the bottom 5 percent and saying you can't deviate more than 20 percent, if that isn't liberal enough then I don't think I want my amendment interpreted

Dr. Fisi. I can understand the top 5 percent because you have dis

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