« PreviousContinue »
The State provided $446, the local community still absorbed $252 per child, for an A child. That was coming out of property tax primarily.
For the B child the cost of education was still $1300, we still got the $446 from the State. This is an average--some were higher, some lower—these were averge figures. We received a B payment of $191. In other words, the local property taxpayer was paying $663 per student. So we are saying, in effect, half of the property tax comes from residential property; the last time we looked it was 52 percent in California.
The Wall Street Journal a few weeks ago included a statement that two-thirds of the tax was from business. So the nontaxpaying business is about half of our tax base. We think in equity that the payment for the B student should be increased.
We feel in our community, although we have a high number of military, we feel there is no differnce between the military or civilian. The military follows the policy sometimes of replacing employees, military employees with civilian employees. They say, we are now going to move to civilian.
In the law, Public Law 93-380, there was a slight change made, that the military entitlement was made a little bit higher than the civilian entitlement. The justification was they had the commissary benefits and health care benefits, and so on, that the civilian employees did not have. So we were entitled to more because that money did not come back into the local economy.
So we feel that if anything the civilian, being an integral part of the program, we do not consider that should be cut off. We do not understand the reasoning of making the differentiation between the As and the Bs, because even to begin with, the basic rate is half that.
I do not believe that is what you wanted to hear.
Mr. Quis. That is immaterial to me. You make the answers the way you see them. I surely would not expect you to come and tell me that you ought to have less money, but I do feel it needs some work to make it more fair and equitable.
Dr. FISH. Yes.
Dr. Fish. It has been adjusted, one of my colleagues said 40 times; we see conditions changing. Some people say it has been around too long. I doubt if the law, as it is now, is the same.
We would ask, for example, that all Federal properties be looked at. We would include the tax-exempt Federal Post Offices.
Mr. QUIE. When you surmised my own personal views would be different than yours; you surmised correctly. We all have some biases.
What I am leading up to is, who do you think could do the most fair and impartial study of impact aid?
What organization? what agency? I do not care, pick anybody you want who can do that best.
Dr. Fish. For some reason we believe that this is an authorizing matter. We believe this goes back into the matters of Congress, really. As you said, they refer back to the authorizing committee.
We think that the law-from our perspective the law is a thing that happens out in the school system; when I was testifyng before, we had a different perspective.
We want somebody who looks at the perspective from a national viewpoint. We frankly feel that the local press here in Washington does not understand this bill. We would want it to be somebody who is responsive to the nation as a whole; therefore, we would think something overseen by Congress.
It has been studied twice, by the Battelle Institute and Stanford, and both of those were nationally respected organizations. Already
Mr. Quie. I disagree with Battelle.
Dr. Fish. No. Battelle does not undercut the program. It has been very selectively read over the years.
Mr. Quie. That is not what I asked.
Dr. Fish. It has been several years since I read it. It was done in the late “50’s” I believe, but it made the case that there was an impact on the communities.
Battelle included a statement, as I remember it, because I remembered it very well, that if there is a basis for the As, there is a basis for the Bs.
A lot of the things in there I found great comfort in, in both documents.
Mr. QUIE. Do any of you get Indian impact aid?
Dr. Fish. There is in the coming testimony-people from Indian groups will be in, I believe next week, to testify.
Mr. QUIE. None of you have Indian aid?
One of the things that came up yesterday that has bothered me through the years as well. Let me use the example of my own area where a farmer would decide to work his farm at night or after work, as a number of smaller farmers do, and go to work for the Federal Government. He has not moved or anything, the schools were educating his children prior to his seeking employment, so how did that farmer become a greater impact on the community when he started working for the Federal Government than he did prior to that?
Dr. FISH. I would have to say that he was working on a nontaxpaying piece of property and I agree that there are exceptions like that. I know farmers are industrious people, but I do not know how many there would be like that.
The Office of Education, in their testimony made the point that there are people, they said something that was one of the inequities, they identified people in the community who would have been there anyway. To me that is not significant. If that person replaces somebody who derived his entire income from the Federal Government, they would be the same as any other employee. The point is that there is a position there that is taking the place of a taxpaying piece of property, providing or doing a job. They have dependents that are in the schools. I tie taxes together, there is property; there is residential and business property.
Mr. QUIE. Whether he is a farmer or a homeowner, and he could substantially increase his income by working for the Federal Government, he probably would make improvements on his property which then would raise the taxes locally.
The school district benefits substantially, even without the impact aid, but then it gets impact aid over that.
Dr. Fish. Yes, sir. But if he had gone to work on a taxpaying property, his efforts would have increased, the taxable effort of the community, too.
Mr. QUIE. That is right. He would not get any impact aid.
Dr. Fish. We get the tax revenues. Many of our communities almost look on impact aid as a vested right. We have a very difficult time understanding why the Federal Government would even consider cutting it off.
I am going to say something that is very facetious and I do not mean it to be, but has the Federal Government ever conducted a study to propose not to pay the electric light bill? You see, that is the way we look at it. The Electric Light Company has a monopoly, provides a service, and it could be absorbed and it is a relatively small part of their revenues. I do not mean to be facetious, but that is almsot th way we look at it.
Mr. QUIE. Carrying that further, then, should they be making payments to the Police Department?
Dr. Fish. In San Diego the Navy used to provide additional shore patrol help until very recently. The Navy does lighten the burden on the hospital, they take care of the dependents in the community, we do not have to staff the hospitals for them.
Mr. QUIE. Usually it takes more policemen when there is a military base around.
Dr. Fish. We do not want to disparage our good friends, but also remember, they provide on their base the police services and everything, but they do not provide the educational services except through impact aid, through section
Mr. Quie. They do not provide the total police service, either, that is needed for the community because of the military base?
Dr. FISH. That is true.
Mr. QUIE. Have you done a study or has anybody done a study that
you know of to determine the value of the property taxwise, so that each of the districts, would know how much it would have received if this was a payment in lieu of taxes rather than the impact aid? You are all heavily impact aid users, so you may have received more.
Mr. HEFTEL. Will my colleague yield?
Mr. HEFTEL. We have in Mr. Francis Paul's statement an example of the answer to the question you are asking.
You will find on page 7 they have computed the fact that the compensation of $25,000 is equated against a loss of $65,000 in terms of what would have been tax revenue. So they have endeavored to try to equate the payment against what they felt was the loss in
In the example there you have used, I assume you feel it is representative of your district.
Mr. Paul. Yes. In the determinations we used what apppeared to be the fair market value of land per acre, properly developed either for industrial or residential use, at today's market value and today's current tax value.
Mr. HEFTEL. You would have received $65,000 in tax revenues versus the fact that impact aid had represented $25,000.
Mr. Paul. No. We would have received $139,000 property tax revenue, but we assume that since commercial property accounts for 50 percent of all property tax revenue, of the $130,000, $65,000 would have been property tax, applying only to B students, commercial property tax, and $65,000 would have been residential property tax, on which there was no loss.
So when we receive $25,000 impact aid, it was $25,000 against a real loss of $65,000 preorpty tax revenue from the employer. There was a two-thirds loss in tax.
Mr. HEFTEL. That was your average of your two forms of taxation, residential and commercial?
Mr. Paul. Yes.
Mr. QUIE. What was the increase in the private property value because of the military base? I do not know your area, but I know in San Diego, would be San Diego if it were not for the military.
Mr. PAUL. I do not have the information readily available, because Fort Defense came into existence as Camp Defense and my father served there. So that was quite a bit before my time. It came into existence I think about 1915 or 1916. It was during that period of time that the Federal Government acquired the land. So I have not delved that far back to determine; property values have gone so far out of whack it would be difficult to look at the loss to the town other than the projections that we have which are not unreasonable based on today's fair market value.
Mr. Quis. But is it beneficial to have that? You have not looked at what the military did to the other property. I was wondering if the rest of you have done anything similar to what you would have if you had received property tax. You could submit that for the record.
Dr. FISH. I believe most of us here at the table have it. I know in San Diego for 1973, I asked the assessor to give me the value of the land itself, in our 15 military installations. At that time it was $750 milion in our school district. I projected forward on the increase of valuations from that point, our finance people did, and we said that in 1975-76 it was $945 million in land alone.
Now there are a couple of factors that are significant here. It is very hard to make this kind of comparison because, what is the value of an airfield out in Kansas, for example?
The going market is not great. So we cannot judge the improvements. That has been one of the problems with “in lieu” tax bils. That is the reason we are nervous about them.
Congress passed one and I think they limited the payments to 50 cents an acre. So we know it would be at least this amount of money. The improvements, we do not know.
We do know, we computed on this that at the earlier time it would have essentially been twice the amount of revenue on the land, twice as much as we received
Mr. QUIE. As you presently are receiving?
Dr. FISH. —under impact aid. Of course that would not have meant the school district's revenues would have gone up twice as much; rather, the taxpayer would have had a reduction in his property tax-we have a revenue limit law-which would have been very welcome.
Mr. QUIE. What do your school taxes amount to, two-thirds?
Dr. Fish. In San Diego it runs about two-thirds of our revenue from local income sources was 55.3 percent, which means property tax.
Mr. QUIE. I mean, of the property tax, what percentage goes for education?
Dr. Fish. Approximately half. I can submit that in writing to you.
Mr. QUIE. Okay. So you would have come out about the same then; using "in lieu of taxes” for the property would have doubled the amount of money?
Dr. FISH. No, that is just school taxes I am talking about, sir. Mr. QUIE. Let me run that by again and see if I understand it.
You indicated that the property taxes would have increased by double the amount of impact aid.
Dr. Fish. I mean school property tax.
Dr. Fish. I am sorry, sir. I confused you. I meant to say the school property tax would have been twice as much.
Mr. QUIE. So in other words, based on the value of property, “in lieu of taxes” would have been 4 times the amount that you received i impact aid; the doubling is for the schools, and then there would be another doubling again. What you are saying is 4 times as much?
Dr. Fish. Yes, but that does not include the improvements, too. So this is just on the land.
Mr. QUIE. Just on the land?
Mr. QUIE. Let's get that straight. Four times as much, is that correct?
Dr. FISH. Yes. You get a bargain there.
Mr. QUIE. I just want to know the facts, that is all. I do not know it is a bargain. That is a pretty substantial amount, 4 times as much.
Dr. FISH. Yes, sir.
Mr. HEFTEL. I think we are touching on what we started yesterday, and I think it is at the heart of the problem, to demonstrate to Congress and to the media, as you point out, that impact aid is not some kind of a gift. It appears that you suffer mostly from the fact that you do not have a bureaucracy, supported in Washington, which in turn perpetuates impact aid.
I think the very strength of the program, which is its lack of high administrative cost and employment in Washington, is in turn its weakness because you do not have a constituency in Washington dependent upon impact aid for the continuation of their own