The Montgomery County School Superintendent proposed a $163.2 million school operating budget for the 1971-72 school year. This represents an increase of $21.2 million or 14.9 percent. Over half of this increase is for "cost-of-living increases" and other salary and benefit items. Further, the 9.6 percent increase in per pupil expenditure proposed in this budget for D.C. Public Schools is in line with the national experience according to the National Education Association.5 There is no question that inflation is an important factor in assessing school financing needs. The Cost-of-Education Index referred to earlier indicates that the 1970-71 education dollar may "well be worth only about 536 taking 1957-59 as the 100 dollar." The report further states that the increase of 13% in last year's education expenditures was almost entirely offset by nearly a 11% rise in education inflation. These trends present a background against which to view the requests for the D.C. Public Schools. Personnel costs and non-personnel costs provide points of reference for discussing what is happening to school costs. Personnel Costs.-Eighty-eight cents of each dollar is consumed in providing human resources for the schools. Seventy (70%) percent of both dollars spent and numbers of personnel provided is for Class 15 instructional staff-teachers, counselors, and librarians who work directly with our children. The estimated cost of providing each of these persons in the FY 1972 Budget is $12,000 computed on the basis of $10,660 salary plus 10% benefits and $300 for substitute time in the case of classroom teachers. In many respects the school system is penalized for its improvements. As fewer temporary teachers enter the system, as more teachers acquire additional hours beyond the bachelor's level, as turnover is reduced and tenure achieved and as more attractive salary scales are adopted, the pressures on schools budget mount.6 Another problem which affects the school costs is the budgetary process itself. The steps used for computing salaries has been unrealistic in previous budget submissions, within-grade increases have not been budgeted; and in the past two years, the District of Columbia agencies have been required to absorb 15% of all legislated salary increases, which at full funding does not adjust salary requirements to the average salary step for D.C. School teachers. Non-Personnel Costs.-Approximately 12 cents out of each dollar spent by the Public Schools is spent on "things" or non-personnel items. The largest nonpersonnel item is called "other services" and the largest portion of this cost is for contractual services from other agencies. The school system contracts with the District Government each year for approximately $5 million worth of maintenance work on school and office buildings. The maintenance workers received large salary increases along with other District Government employees and this, of course, increases the costs of maintenance and repair. Also, the school system pays the District Government a substantial sum each year to collect trash and garbage at the schools. Trash collectors have received substantial salary increases, so we are paying more for their service. The cost of pencils, paper, thumbtacks, chalk and other supplies and materials has risen steadily. The cost of books and equipment has also risen. A 15 percent increase in the cost of goods and services can best be illustrated with textbooks. If $5,000 bought 1,000 textbooks in 1969, that same $5,000 will buy only 870 textbooks in 1972. Other increases in costs include: (a) The District of Columbia Government has raised the reimbursement for use of private automobiles from 8 to 10 cents per mile (25%) and the per diem travel allowance from $16.00 to $25.00 (56%). (b) Costs of gasoline and other vehicular operating items have risen, thereby increasing the cost of operating government-owned vehicles. (c) The cost of telephones in offices and schools has risen due to telephone rate increases and the installation of a new (and more expensive) telephone system to serve the schools. (d) Price increases for heating fuel, electricity and gas have risen between 13 and 20%. Pressures on the FY 1972 Operating Budget also represent prior years' decisions on school construction programs. For example, the FY 1972 Operating Budget 4 Montgomery Schools Ask $163 Million Washington Post (February 10, 1971) pp. C1, C22. Education Daily, Volume 4, No. 7 (January 12, 1971) p. 2. Nationwide, the increase in salaries of teachers and other instrictional staff rose 7.1 percent over last year, but again according to NEA this barely offsets the rise in the consumer price index. The average salary of classroom teachers is estimated at $9,265 based upon nearly 2.0 million public school classroom teachers. The average salary does not include benefits, leave, and substitute time. (Ibid. Education Daily) STATEMENT ON How D.C. PUBLIC SCHOOLS GO FROM $139 MILLION TO $146 MILLION IN THE 1972 BUDGET Mandatory Increases $3.906.5 thousand Pay Raises for GS and WB Employees Staffing of lew Facilities (amie D. Lee, Woodson, Langdon Scurce: D.C. Public Schools, Division of Budget and Executive Management, July 19, 1971. also represents prior years' decisions on school construction programs. The FY 1972 Operating Budget shows 11 new buildings in operation, 4 new cafeterias and 44 new cafeteria workers. All of these factors increase the per pupil expenditure ratio. In summarizing, the increases in the FY 1972 Budget may be viewed in terms of mandatory costs and obligatory costs, i.e. workload requirements, new programs and improvements in existing programs. The definitions are those supplied by the District's Office of Budget and Executive Management. Briefly, the definitions used in the District of Columbia budgetary process are as follows: Required cost.-Includes increases in cost to maintain present levels of operation which do not produce any subsequent improvements in service or relief of additional workload. Workload cost.-Includes increases in cost to maintain an agency's current standard of operation resulting from uncontrollable factors such as population increases or caseload increases. Improved services and new programs.-These include costs required for improving services by reducing ratios, workloads, and to reduce the level of resources required to produce the same level of outputs, i.e., increased efficiency. New programs are those for which funds have not been previously provided by General Appropriations. The mandatory costs in the FY 1972 submission before you consist of staffing of new buildings, including cafeterias, salary increases, salary step adjustments, and grade increases which require an additional $7.0 million. The workload increases are to maintain the same ratios and levels of service in FY 1972 as the current level, e.g., to maintain existing inventory levels, maintenance and repair schedules. Finally, as a last illustration of the impact of costs upon school operations, assume this school system with only school buildings, pupils, and teachers. The cost of keeping the school building open ($24.0 million) and providing a teacher for each class ($78.3 million) would require $106.0 million. This would provide no books, aides or principals. There would be no executive staff, counselors, pupil personnel services or personnel functions. It provides a school building, students, and a teacher, nothing else. It is against this economic framework that the programmatic needs as expressed in this budget must be viewed. Mr. BROYHILL. I think the Chairman touched on this as well. It is extremely difficult for the members of this Committee to pass judg ment on all the minute details of operating the District of Columbia School System, and there has been a lot of what I regard as justifiable criticism as to what extent Congress should stick their nose into the operation of the school system. SCHOOL FINANCING We tried to eliminate this situation with the legislation for the election of the school board. The other day, Congressman Abernethy suggested the possibility of permitting the citizens of the District of Columbia to raise their own revenue, to have the authority to tax themselves, and that imposes some obvious difficulties because there is a Federal responsibility for some of these services and expenditures in the District, but I don't see why the Federal government has to be involved in the school system here in the District of Columbia any more than in any other state or community. We provided for an elected school board. If we could also provide this elected board with additional autonomy to raise their own revenue through setting tax rates Mr. CABELL. Will the gentleman yield at this point? Mr. BROYHILL. Sure. Mr. CABELL. I would like to advise the record that the District of Columbia does have the right to set the tax rate on real property but which they have not seen fit to change in the last several years despite the fact that the District's tax rate is considerably lower than in the surrounding areas. Mr. BROYHILL. I thank the Chairman for his observation. I was aware of the fact that the District of Columbia Government, that is the City Council, has the authority to levy taxes on real property. It does not have the authority, however, to set the income tax rate. What I was getting at, Mr. Chairman, is the possibility of giving the elected school board the authority to raise all of its revenues for the operation of the school system. Now, I realize that there are federal programs that tie into the school system in every state and community and particularly in the area of the Impacted Aid program, which is supposed to take care of the obligations of the Federal Government to the community wherein it has substantial federal operations and federal facilities. If the District had the authority to tax its citizens the same as any local community has, would you be able to operate the school system here in the District of Columbia as well as any other community? INDEPENDENT SCHOOL SYSTEM Dr. SCOTT. Mr. Broyhill, I think the only proper response to that is that any financing of the District of Columbia School System in terms of an independent approach has to be looked at in terms of how the District Government itself secures its revenue and I think if the District gains full independence in this regard, then I think certainly the school system could do so but I rather wonder how one agency could do it without the others. Mr. BROYHILL. Well, in all communities these things do tie together. I grant you that. We have a greater problem, however, in cutting off the District of Columbia Government entirely from the Congress because of such things as the May Day Demonstration. There are some expenditures and responsibilities here that just overlap with the operation of the Federal government, so you will never be able to separate the general operations of the District of Columbia entirely away from the Congress. It just can't be done. But the school system could certainly levy taxes, because the Congress has no reason to be any more involved in the school system in the District of Columbia than in the school system of any other community. It is just a question of giving you authority to raise your own money, the same as other communities have. You raised the question, and I agree, that it will be difficult to give the taxing authority to the School Board when the general taxing authority is generally given to the governing body, but in view of the complexity of the District Government, we would have to have a separate taxing authority for the school board alone. Now, could you, if you had that authority, operate the school system without any further funding from the Congress, the same as any comparable community could? Dr. ScoTT. Again, I am not an expert in that area. I could only say that since the school budget represents only one fourth or 23 percent of the District's budget, it would be very difficult for me to see even with my rather unsophisticated approach to such problems how the school system could function independently from a structure that depends on the Congress of the United States for a good part of its funds. I think the school system is an independent part of this District. I believe in the full integration of these two bodies, government and the school system, and whatever course the District Government ends up with, I would hope that the school system fits into that in a way that is most beneficial to the school system in terms of the fact that I would question whether 23 percent of the budget of the District is enough for the school system. We would probably need far more. Mr. BROYHILL. Well, I am one member of the Committee who would like to let the people of the District of Columbia operate their school system completely. Now, you have indicated by your answer, as I understand it, that you don't believe the School Board can operate the school system without the entire District Government operating independently. That, of course, does bring up some other problems because there are responsibilities that the Federal Government has in other areas of the District of Columbia Government, but I would think that the school system would be one area that could operate separately. I am no more interested in telling you how to run your school system than you are in coming before this Committee and having to explain how you run it, and I am willing to do everything I can to give you complete control and authority, but if you don't feel that can be done, we'll go ahead with the old system. Dr. SCOTT. Mr. Broyhill, there are some areas where the school system could use more freedom in terms of some other functions because there are checks and controls I don't think are really needed and you have an elected board through which the Superintendent has to go through and to carry out his responsibilities he has to get approval from the City Council or the District of Columbia Personnel Office and neither of these boards are responsible to the citizens in terms of the conduct of school affairs and so those are areas where I would like to see the reform come initially because I think the school board is actually capable of functioning at the policy making level for the District of Columbia Schools. And there are ways in which we are tied in operationally with the District Government and I certainly have a great deal of respect for the Mayor's office but in terms of such areas as for instance our maintenance, they sell us services at a rather higher rate than we could get by ourselves. We contract with the District Government for certain services in which we could pay for the same services elsewhere at a lower price. And in maintenance we have to depend on the District Government in terms of the quality of the services so we are not the masters of our fate in many cases. Mr. BROYHILL. I know. You are explaining your present situation. I was hoping we could improve on that. You don't believe it is feasible though, so I guess we will have to continue with the present situation. Mr. FAUNTROY. If the gentleman would yield? Mr. BROYHILL. Sure. Mr. FAUNTROY. I think we would we could work this out if we had full self government at the local level. Mr. BROYHILL. Well, I am going to yield the floor now, Mr. Chairman. But just in response to that, I feel that there are ways that |