THE UNCHANGING IMPACT

A glance at the map on the facing page shows very clearly the extent of the impact of the United States Military Academy at West Point on the Highland Falls-Fort Montgomery Central School District. The shaded portion represents the 1700 acres of land left on the tax roll out of the 21,000 acres total land area of the district. So small is the resulting tax base that even after a County-wide reassessment, which advanced all properties to market value, our school district has the lowest taxable wealth per student of the 55 districts in the entire Mid-Hudson Area. This is indeed

more noteworthy in light of the fact that Orange County was the only one of the 5 or 6 counties involved that conducted the reappraisal.

The burden of the Federal presence on the school district is plainly both substantial and permanent. Our citizens are very much aware of it for they are paying school taxes and many of them had their lands and homes taken from them. Each year as we present the school budget to the public, the same questions are asked: "Why can't you tell us for certain how much Impact Aid we're going to get next year?" "Why can't you get a permanent law so you don't have to fight about this every year?" "Doesn't the government recognize the problems that it created?"

Finally, this year, one of our townspeople rather waggishly asserted, "The only real solution is to sell what's left to the Federal Government and let THEM finance the schools."

THE CONTINUING ATTACK ON THE "B" STUDENT

If the federal property were on the tax rolls, there is no question but that Highland Falls would be in a similar position to one of our neighboring school districts which has two large electric generating plants located within its borders. The taxable wealth per student of that district is 5 times that

of ours, and the major part of the school tax is gained from the commercial

property.

The fact that the "B" students' parents pay local school taxes on their homes is exactly the reason that the payment rate for "B" students was originally set at one-half that of the "A" student. The taxes ordinarily

paid by the commercial property, such as the aforementioned electric generating plants, are not paid by the federal installation and it is this lost tax that is being paid in behalf of the "B" student.

Indeed if one really contrasts the "B" type of payment system with the ordinary school district financial system it is the "B" system which emerges

as the fairer of the two because the district that has the burden of the

children to educate is the district that receives the payment. In the ordinary system, school district boundary lines were drawn in an arbitrary manner, resulting in the creation of some artificially rich districts and some artificially poor ones, depending upon the presence or absence of commercial properties to share the tax burden. This system is coming under more and more attack through the courts because of the educational inequalities that such a system produces.

I would like to take this opportunity to thank the Chairman and the Members of the Committee for permitting me to come before them and present this material. I trust that it will be helpful in your deliberations.

STATEMENT OF WILLIAM F. DUNCAN

Dr. DUNCAN. Mr. Chairman, I appreciate the opportunity to come here and present this testimony.

The Highland Falls School System is not as huge in terms of student population as others who have presented testimony here this morning. We have about 1500 students. Fifty percent of them are federally-connected. We have 250 A students in our high school. We have no elementary A students because there is a Section 6 school operating on the West Point grounds.

Our impact aid funds amount to about 20 percent of our budget. Basically our problem is really not only the students, but more importantly the fact that we have 7 percent of our land left to us on the tax rolls.

The points I would like to make are only two. One, that this impact on our school district is continuing, it has been in existence for many, many years, and it is not going to change. Our citizens are very much aware of the impact of the Federal installation on

our school system and they know it is not going to change. They can't understand why we have to continue the struggle every year over the authorization and funding of this law when it is so evident to them that they are very heavily impacted. Indeed, as I mentioned in my report, one of our citizens suggested that the best thing we could do was to sell the land we have left to the Federal government so the Federal government would have to finance the schools, the water, the sewage and all the other community services.

The other point I would like to make has to do with the B students. I believe their funding is necessary. If we look at the amount of tax revenue that would be generated by this land updating its value to present times, I am sure that we would be one of the wealthiest districts probably in the United States if this land were on the tax rolls. The B student is a very significant part of this because, as all of these other gentlemen have also stated, they pay no taxes; they have many tax-free benefits available to them on post and our school district has the burden of educating their children.

I think the B student funding is one of the fairest means of educational finance because there are many districts throughout the United States which were created artificially rich by virtue of property that could be used for business or industry within their boundaries and others which were created artificially poor.

The B student funding at least makes the payment to the school district that has the children. So, where the expense is needed the funds are provided. Those are the two points I would like to make. Thank you very much for your attention.

Mr. QUIE. Could you tell me, Dr. Duncan, how many are in the Section 6 school and how many are outside of that?

Dr. DUNCAN. There are approximately 900 children in the Section 6 school. We have a total of 1500 students in our school district outside of the Section 6.

If I may make another point with respect to the A funding, we are in a very strange situation because our high school is bigger than our elementary population because we only receive the A students from West point at a high school level so it is not possible for us to become a super-aid district since we do not have 25 percent of the total student population as A students. Yet they amount to 30 percent of our high school enrollment. So we have a very serious impaction of A students at the high school level, but are limited to 90 percent of the funding because of that particular part of the law. Mr. QUIE. The West Point students then go through 9th grade in the Section 6?

Mr. DUNCAN. They stop at 8th grade and we have them 9th through 12th.

Mr. QUIE. Why don't you turn over the high school students to the federal government under Section 6?

Dr. DUNCAN. We would like to do that. We have educated their high school students for I guess as long as they have been having high school students at West Point. When they built the Section 6 schools they stopped it at the 8th grade. At this point I think the numbers are probably economically not realistic for the Federal government to build a high school at West Point and educate them since there would be but 250 students involved.

Mr. QUIE. In the Section 6 school, there are both A's and B's? Dr. DUNCAN. It is entirely on the post at West Point.

Mr. QUIE. Are there any B students that attend?

Dr. DUNCAN. They are all residents of the West Point reservation. No townspeople go into that.

Mr. QUIE. Do you have any A's in the 1500?

Dr. DUNCAN. We have 250 As.

Mr. QUIE. How many B's?

Dr. DUNCAN. 500.

Mr. QUIE. You have a little less than a thousand of your own? Dr. DUNCAN. We have 750 of our own. 250 and 500 makes 750 and we have a total of 1500 students in our own district outside of the Section 6.

Mr. QUIE. Let me ask about the Douglas School District, Ellsworth Air Force base. Why didn't you turn those over to the Federal government?

Dr. MUELLER. There have been times when we have considered that possibility and in working with the base officer and other officials on Ellsworth Air Force base, as well as with the staff office, the process of establishing new Section 6 schools has been discouraged.

Mr. QUIE. One of the problems you have is that the state provides such a little amount of money for education in South Dakota. I believe South Dakota is the worst state in the union for that. Dr. MUELLER. Not quite, but very nearly.

However, I would like to indicate that the equalization fund from the state for the Douglas School System I believe is the highest per pupil that exists in South Dakota. I believe a year ago that was approximately $308 per pupil. That, of course, is based on the flat grant formula and an equalization formula so while the state average is not substantial they do make a real contribution to the number of students enrolled in the district.

Mr. QUIE. Do you recall the state average?

Dr. MUELLER. Not exactly. It is approximately $150 for the state average.

Mr. QUIE. That compares with your neighboring state of Minnesota of $1,030.

Chairman PERKINS. Let me ask you a question, Mr. Stormer. Do you have any estimates on the number of schools which can now qualify for pinpoint disaster assistance under your present regulations? How much money would be involved and where are you going to get these funds?

Mr. STORMER. As I indicated we had, at the time this testimony was written, 400 requests, of which 333 have the accompanying State evaluations and Governors' certifications requesting pinpoint disaster assistance.

I would presume that probably the 333 which have the Governors' certifications may ultimately be declared pinpoint disasters. We have used a rough estimate, assuming we return to January 2, 1968, that it would require in the neighborhood of $130 million to service pinpoint disaster assistance.

We recognize that this estimate, at the present time, is a soft estimate. This is one of the reasons, as I have indicated, that we will