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Office of the Superintendent
June, 1977

Mr. Chairman, distinguished members of the Sub-Committee: I want

to thank you for the opportunity to testify before the Committee today. My is Richard Triplett, and I am Superintendent of Schools at Bellevue,


Located within the Bellevue district are Offutt Air Force Base and Headquarters, Strategic Air Command. As a result, approximately one-third of the more than 10,000 pupils enrolled in the district are "A" pupils and another one-third are "B" pupils, practically all of whom are dependents of those employed at the Air Base. As you undoubtedly know, the parents of the "A" pupils both live and work on base. The parents of the "B" pupils work on base and reside in privately owned property within the district. district is one of the few in the nation which has more than a 25% impaction of "A" pupils. Such districts, the so-called Super "A" districts, receive full funding for their "A" pupils but receive the same reductions as other districts for any "B" pupils.


The PL 874 formula which provides a full rate for the "A" pupil and a half-rate for the "B" pupil has been under attack by the use of the argument that while "A" payments are justified because there is no tax base for such pupils, the "B" payments are not justified because the parents of "B" pupils pay taxes on their residences just as anyone else. The argument while persuasive, is fallacious. Local taxes throughout the nation come equally from two sources, one, the place of employment and two, the place of residence. In the case of the "A" pupil, both sources are lost to the district and the full rate is justified. In the case of the "B" pupil, one-half of the tax base is lost, namely the place of employment. Thus, the half-rate for the

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"B" pupil is justified in exactly the same manner as the full rate for the

"A" pupil.

If, however, it is the decision of the Congress that PL 874 funding should more properly be diverted to other educational uses, some priorities of funding must be established for the highly impacted districts and particularly for those serving military installations. The expedient way of just eliminating the "B" funding would result in economic disaster for highly impacted districts which have a high proportion of military "B" pupils, of which our district is a prime example.

Another argument that is used against "B" funding is that the economic benefit of a federal installation makes up for the possible loss of "B" funding. To counter this argument in our own case, the following data are provided. Offutt operates or houses numerous businesses furnishing many services for military personnel, their dependents and for retirees. Among these are barber shops, cafeterias, filling stations, restaurants, bowling establishments, theater, shoe repair, cleaners and laundry, bank, golf courses, motel, pharmacies, hospital; and the commissaries and exchanges selling everything from groceries to lawn mowers and clothing. All such sales are exempt from the state sales tax. Offutt's commissaries had total sales of over $24 million and the base exchange had sales of over $14.5 million during 1976, none of which were subject to sales tax.

Due to the Soldiers and Sailors Relief Act, military personnel may maintain their legal residence in other states and thus may pay income taxes and personal property taxes to their home state. Thus the apparent wealth in terms of income and personal property held by the non-residents in the uniformed services is generally not taxable by the state of Nebraska or the local sub-divisions of government. For instance, of the 60,000 automobiles registered in Sarpy County, 22,000 carry non-residence license plates and

are taxed in the state of residence. This represents a loss of more than $ 2 million dollars per year to the local taxing agencies in the county, assuming an annual tax of $100 per vehicle.

The exercise of the principle of exclusive jurisdiction by the Air Force over the base has the effect of denying to the district a share in the personal and business property taxes that normally in Nebraska would be assessed against privately owned property on the base. (Utilities, leased computers, etc. are estimated at a value of several million dollars). Bellevue is the only district in Nebraska in which the principle of exclusive jurisdiction is applied.

There are eight Nebraska districts which serve the dependents of personnel working at Offutt, all in the Omaha area. Of these eight districts, three are immediately adjacent to, or encompass, the base and are highly impacted. Five are further removed from the base and are more lightly impacted. For this purpose, a highly impacted district is defined as one with a relative impact of more than 10%, counting an "A" pupil as one pupil, a "B" pupil as one-half pupil and dividing the sum by the total enrollment.

The three districts immediately adjacent to Offutt, the districts with more than 10% relative impact, display the following characteristics as compared with the five districts which each have less than 10% relative impaction.

Assessed Valuation Per Pupil - (1974-75)

The average assessed valuation per pupil for five lightly impacted districts is $19,255 as compared with $6,963 for the three highly impacted districts, almost three times greater. For the state, the average is $22,010 per pupil.

Millage Rates (1976-77)

The average millage rate for the five lightly impacted districts is 63.93. For the three highly impacted districts it is 80.20. Approximately

25% greater. For the state as a whole the average is 40.00 mills.

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The average cost per pupil for the lightly impacted districts is $1,209, for the highly impacted districts $973. Thus, the lightly impacted districts expend at a level of 24% greater than the three highly impacted

districts. The state average cost is $1,274 per pupil.

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For the lightly impacted districts, the average pupil/teacher ratio is 19.1. For the highly impacted districts, the pupil/teacher ratio is 20.0. Thus, the highly impacted districts place five percent more pupils in each classroom.

It is apparent that any positive effect which may exist from the economic benefit resulting from the presence of the federal installation is not reflected in the financial data for the highly impacted districts. the current level of reducing funding, the three highly impacted districts have a much lower level of available resources upon which to tax, they make a much greater effort in terms of mills levied, their costs per pupil are much lower and they place more pupils in each classroom than their more lightly impacted neighbors which also serve the base. The only apparent conclusion is that the highly impacted districts are least able to absorb any proposed reduction in PL 874 funding. Further reductions would either further increase an already inequitable tax load, or decrease the level of education offered. It is, however, apparent that the lightly impacted districts have a less favorable financial structure than the average district in the state. Thus, even the lesser degree of impaction apparently causes a negative effect upon school finance measures.

Of the 297 unified districts in Nebraska, 30 or approximately 10% are PL 874 recipients. Of the 30 recipients, eight have a relative impact of more than 10%. Of the highly impacted districts, three are immediately

adjacent to Offutt, and are those previously referred to, the other five serve Indian reservations which obviously also lack a tax base because of the federal or tribal ownership of real property in the districts. In the case of our own district, the base owns 18% of the land area of the district.

In summary:

(1) The "B" funding can be justified on the same philosophical and

economic basis as can the "A" funding.

(2) In the event further reductions in funding are implemented,
(a) Full funding should be provided districts with a high

relative impaction. In Nebraska, at least, the distinc-
tion between high and low relative impaction is at 10%.
(b) Full funding should be provided for districts which serve
military installations because of the effect of the
Soldiers and Sailors Relief Act, the operation of tax-
free on-base services and the application of the principle
of exclusive jurisdiction.

(c) A distinction in funding levels should be made between
civilian "B's" and military "B's", with a higher priority
established for military "B's".

(d) Provisions should be made for an in-lieu of tax for the
land area which is occupied by the federal installation
when such ownership exceeds 10% of the district's total


(e) It is doubtful that any formula can be applied equitably
to those few districts which are severely impacted, those
with a relative impaction of greater than 40%, for
example. For such districts, a budget balancing provision
should be written into law which allows the U.S. Commissioner
of Education the authority to provide the necessary federal

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