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B funding. This is not true in our district, nor I suspect is it true for Papillion and Plattsmouth.

Our district patrons for the 27 years of P.L. 874 have steadfastly maintained that they will not, and I repeat not, subsidize what they are firmly convinced is a responsibility of the Federal Government. What is it that these three districts are more apt to do? I predict that they will immediately dismiss 150 teachers with a $10,000 average salary which just about equals the $1,500,000 in lost B funding. These 150 teachers, at $100 a week in unemployment benefits, which is about half of their salary, develop a total unemployment benefit cost of $750,000 in one year. Half of the $1.5 million that has been saved will have been expended in unemployment benefits within a year; in addition, the loss of state and Federal income taxes in the amount of somewhat probably in the order of $150,000.

Classroom enrollments in these three districts will go from a maximum now of about 35 per pupil, the three districts being among the highest in the state at the moment, would go from 35 to 40 per classroom. The losers, of course, are the children, not the teachers, and not the taxpayers, but the roughly 20,000 youngsters who enroll in these three school districts, a mixture of A's, B's and nonfederally connected pupils.

Another option in our state may be to charge tuition to nonresidents. This was referred to yesterday I believe by Mr. Quie. We started this process in 1970, when severe reductions were made in P.L. 874 funding. A supplemental appropriation allowed us to continue the operation of our schools, so this concept was never tested in court, as it surely would have been had we proceeded to implement such a plan.

This appears unjust to military personnel, and rightfully so, I think, to violate their right to a free public education and is certainly not recommended as a way to strengthen the human relations between the civilian and military segments of any community.

It does indicate the extreme positions which our patrons have taken and will take on a matter of principle.

The P.L. 815 assurances were referred to yesterday as stopping a district from charging tuition. They were signed by our Board of Education, and they are considered by our board to include an agreement that the P.L. 874 funds would be provided for maintenance and operation on a continuing basis.

Obviously, without P.L. 874 in 1950 the board would never have signed the assurances on P.L. 815.

In conclusion, the average quoted by the GAO report, even if accurate, does not justify further reduction in B funding. The implication that the elimination of B funding would simply be absorbed by minor tax increases cannot be verified in fact for highly impacted districts, at least it is more likely that the teaching staff would be reduced.

Thank you.

Mr. JENNINGS. While we are waiting for the Congressmen to come back, I would like to ask a question or two. They are over on the Floor right now with the vote on the foreign aid bill, and they may

be delayed a couple of minutes. But, I know both Mr. Perkins and Mr. Heftel have a series of questions to ask.

I believe it would be helpful for the record if you could each describe your districts in terms of impaction, so that when the answers are given later to these questions, we will have an idea what perspective you are speaking from.

According to information supplied us yesterday by the Office of Education on impact aid school districts, 33 percent have fewer than 49 children, and 53 percent have fewer than 100 children for whom they are claiming impact aid payments.

Also, according to the same set of statistics, 30 percent of the impact aid school districts rely on impact aid for less than 1 percent of their budgets, and 67 percent of the impact aid districts rely on impact aid for less than 3 percent of their budgets.

Could you describe for us as you go down the table both your impaction in terms of your number of pupils for whom you are claiming impact aid, and also the degree to which you rely upon impact aid for your total current expenses.

We will start with Newport.

Mr. WILLIAMS. In Newport, we have claimed 1975-1976, which were our latest figures, 1,674 eligible children, which represents approximately 36.4 percent. The Federal share of our total budget is 7.3 percent.

Now, I can break it down for the A's and B's, if you would like. For A's we had 518. For the B's we had 1,156.

Mr. JENNINGS. Mr. Akins?

Mr. AKINS. Hardin County, Kentucky, the last full year I think we had about 2,950 students of a total population that year of about 9,400.

The percent of the budget is roughly 72-I don't have the actual figures with me- it is approximately 71⁄2 percent of the total budget.

Mr. JENNINGS. I am not very good at math. So, your pupils are approximately 33, 35 percent?

Mr. AKINS. 32 or 33, I believe. That is what it has been running. Dr. FISH. Our figures on student enrollment are approximates. The enrollment is 119,000. The number of Federally connected students total is approximately 26,000, of which 7,000 are A's and 19,000 are B students.

Mr. CROSS. What percentage is that?

Dr. FISH. The percentage of the budget has changed-about 5 percent of the budget.

Mr. CROSS. What percentage of your pupils?

Dr. FISH. 25,000-approximately, then, 20 percent of our enrollment has. It has been in that range for years.

Mr. PAUL. Of the two major towns that I service, in the Town of Ayer, Massachusetts we have approximately 2,300 A and B students, which constitute approximately 67 percent of our total average daily attendance. Impact aid received in that comunity constitutes approximately 50 to 55 percent of our gross operating budget. In the adjacent town of Shirley, as mentioned before, we have 160 Federally connected students, comprising 19 percent of the total student membership. Impact aid received constitutes aprpoximately 2 to 3 percent of the total budget, with 19 percent of the students.

Mr. PAXSON. In Bellevue, serving SAC and Offutt Air Force Base, we have a total enrollment of approximately 10,200 students, of which roughly one-third, about 3,500, are A students. About an equal number, 3,500, are B students. Almost entirely these are dependents of military and the other aprpoximately 3,300-3,200 students, are nonfederally connected.

Thus, we are roughly evenly divided between A students, B students and nonfederally connected, 32 to 33 percent each. Total impaction of roughly 71 percent this current year, and our budget, the percent of budget made up by impact funds ranges from 35 to 45 percent. It has been dropping due to the provisions and probably is somewhat less than 40 percent this year.

Chairman PERKINS. Let me thank all you gentlemen for excellent testimony. I happened to be here in the 81st Congress when 815 school construction and 874 were written.

I have seen the results obtained from that legislation over a period of years, even around Elizabethtown. There were buildings with cracks that a dog could almost get through, where the youngsters were going to school back in those days. But, times have changed considerably.

Still, I have always felt that the schools in the country, need any help they can get from the Federal Government.

A number of you have made suggestions for improvement in the computation of payments, and in the administration of the program. Do any of you have any suggestions to be made on how we can move to a general aid program and keep impact aid as a program meeting a real need?

You know, we did this for the disadvantaged in Title I. Now I am asking you how we can move to general aid and let you keep impact aid. Give us your views on how we can do this best.

Dr. FISH. Mr. Chairman, we are as a group generally supportive of Federal aid to education. We look on the education of our children as a national problem. One of the experiences that we have had in impact districts has been this matter of the mobility of students. The local community educates the child, and his economic benefit is derived elsewhere.

We in California have experienced this especially so since the large number of people have come to the state. So, we believe that the lightening of the burden on the local property taxpayer is a proper concern of the Federal Government. We are surprised, for example, that we see revenue sharing to provide support for activities that are property related, like fire departments and things like that, while schools have not enjoyed that degree of Federal support. We have considered this problem among ourselves several times. We have the regard that the impact aid furnishes some good examples in the model of providing a system that provides benefits for the students who are served. We have a very simple system to administer. That is one of the reasons why the school districts like it. It is a system which does not disrupt the educational processes. You can conduct it very simply. So, we have that benefit.

We would urge in moving towards a general aid program that it might encompass this idea of fitting with the enrollment counting system, either ease of administration, a payment related to service,

the number of people provided, generally its characteristics. We would see impact aid maybe as a transition in this direction. We would see impact aid as providing a basis.

We see, also, however on impact aid that we are confronted with the reality that it is tied into our existing structure. Many people in our communities almost look on impact aid as a vested property right of that community. That is one of the reasons why they don't understand somebody approaching it as though it were some discretionary funds.

So, we would have to urge protection in any transition process. We also are concerned sometimes about something that comes up, about the wealth of the ommunity. We have heard misrepresentations about that. The GAO report includes references to the fact that most impact communities are not wealthy. I assure you that the ones that have been speaking to you this morning most definitely are not.

Chairman PERKINS. I would like to hear the other gentlemen discuss how they feel we can move to a general aid bill.

Mr. AKIN. Mr. Chairman, the categorical programs and the impact aid programs in my estimation will always be necessary and must be funded so long as we have inequity, especially within the states, and some inequity of pupil funds from state to state. But definitely within the state.

I think that if we are going to fund general aid to education at the expense of any of the special programs that answer special problems, like ESEA, or impact aid, then this would be a basic mistake and would further inequities that exist within the state.

Some type of general Federal aid maybe that has incentive or does answer some of this problem of inequity I think would be quite beneficial, or something that was built on top of existing categorical programs would be quite beneficial.

Chairman PERKINS. Do any of you other gentlemen want to comment on the question that I just asked? If so, go ahead and comment.

Mr. WILLIAMS. I just have one brief comment, Mr. Chairman. Chairman PERKINS. Go ahead, Mr. Williams.

Mr. WILLIAMS. I have been associated with Federal programs at the local level for approximately 11 years and have seen the value of accountability as it has been practiced in Title I. I think that somewhere along the route some form of general aid, some degree of accountability in terms of the quality of programs that might be going on in a district would be extremely helpful, not only to the local taxpayers, but to the Congress, who would be funding the money.

Incentives-I agree with my colleague-would be one way of doing it, to help the community to begin to realize that we have a trust in using the taxpayer's money. How it should go, I don't know at the present time, but I think these two things are vitally important to any kind of aid that comes to local government. Chairman PERKINS. Mr. Akins said in Kentucky some school district spend three times as much for education as others, $400 a pupil compared to $1,200 a pupil. I would like for you to comment

on that, insofar as it may suggest a way to travel towards general aid.

Mr. WILLIAMS. In terms of Newport, Rhode Island, we spent approximately $1,700 per pupil. Granted, we probably could spend more of the local money if we had more money to spend because the community is dedicated to education. I don't know how other people are making it throughout the rest of the country on smaller amounts of money, to be quite frank. We pour a good deal of money into education.

Chairman PERKINS. Let me ask you one final question now. Yesterday the General Accounting Office told us that 48 percent of the 1,600 impact aid school districts which they surveyed would have to raise property taxes no more than 5 percent if impact aid were phased out. Is this situation for the school districts which are represented here today, or would there be more drastic effects on your district? And do any of you have any comments to make on the type of sample which was used by the General Accounting Office in arriving at their conclusions?

Dr. FISH. I would like to respond first to the type of sample. We consider the General Accounting Office sample is totally skewed. It was based on the availability of data because some states happened to be following one of their eight systems. We don't think it applies in any of the southern states, as was brought out yesterday in the testimony.

I would like to talk about that matter of percentage of budget and amount of taxes raised.

Chairman PERKINS. Go ahead.

Dr. FISH. In San Diego, we talk about 5 percent of our budget. But, I would have to say in the percentage of local property tax increase, considering other funding sources and everything, it would mean probably, and this is an estimate, an 8 or 9 or 10 percent increase in local property taxes.

If you look at my testimony, I have some material on this that might show that. Remember that it is under local resources that impact aid is considered. If a state had a state aid formula that came approximately to 5 percent-unfortunately I don't know how many states have reached that level, I don't think the national average has-if you decrease the budget by 1 percent, you increase local property taxes generally by 2 percent. This makes that burden pretty heavy.

I must make people aware that a very small percentage of school revenue is an extremely serious matter. We have entered in recent years sometimes with a reserve of less than one-half of 1 percent. It is not a degree of discretion in our budget, and our budgets are extremely tied up in salaries and in contractual relationships. In a period of declining enrollment, they are even more tightly bound. So, 1 or 2 percent are significant figures.

I also am concerned about the idea that they go to small school districts, or small numbers of students. These people are severely cramped, too. The size of a district here is somewhat of an irrelevancy in the process.

Chairman PERKINS. Mr. Kildee?

94-584 77-9

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