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In conclusion, I believe strongly that Public Law 81-874

should be fully funded and administered as originally enacted.

When the federal government creates a situation which deprives local municipalities tax revenue, while at the same time creating a situation which demands increased expenditures on the part of local entities, the federal government has an obligation to provide the necessary financial assistance to remedy this situation. There is a 27-year history of the federal government recognizing this obligation and fulfilling it. We now have a well-proven and much-needed program established. For this Congress to consider adversely altering this program without replacing it with some measure equally as valuable in providing quality education would be in my view disastrous!

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Mr. McCLORY. I might say for the most part, we have a great many blacks and Latinos and those who are deserving of the education which the Impact Aid Program supports.

I would be happy to answer any questions which you and your colleagues might have.

Chairman PERKINS. Let me ask, Mr. McClory, do you want to call on your superintendent for a statement?

Mr. McCLORY. I. would be glad to have Mr. Thomas speak. Chairman PERKINS. Identify yourself for the record and make your statement.


Mr. THOMAS. Charles Thomas, Superintendent of Schools, North Chicago, Lake County, Illinois. I have been Superintendent in North Chicago for the past 4 years. During that time, we have made significant strides in the area of school desegregation in the area of providing compensatory education for the disadvantaged youngsters of our district.

Approximately 25 percent of our annual budget comes from the Federal Government. Approximately 50 percent of our youngsters are connected as a result of Great Lakes Naval Station being in our district. So we are heavily impacted.

So anything the Federal Government does as to reduction of funds jeopardizes our offering of equal education opportunities to all the youngsters in our district. I should add approximately 50 percent of our youngsters are minority youngsters. Even with that percentage we have effectively desegregated our schools and we feel we are offering a quality program under adverse circumstances.

So I, too, would strongly urge Members of the Committee and of Congress to afford every effort by the Administration to not reduce impact aid because it is very, very important to us in Chicago. Chairman PERKINS. You say about 50 percent of your students are black?

Mr. THOMAS. Yes.

Chairman PERKINS. To what extent would you have to increase taxes, assuming that the Congress did away with the "B" category? Mr. THOMAS. We would have to increase our taxes enough to raise approximately $200,000, which is the amount which it is being reduced by, which would mean a significant increase in assessed valuation which we don't have. We would have to reduce approximately 20 teachers in our district.

Chairman PERKINS. There is considerable difference between Montgomery County, Maryland, and the area you are presently describing. I am just wondering whether it would be possible to come up with funds without increasing taxes in the area where you are school superintendent. Knowing the value and resources within the county and the city, you still couldn't get by. Is that your statement?

Mr. THOMAS. Yes, sir. The fact of the matter is that we base our budget significantly on the receipt of impact aid funds. If Category B were cut out, that means there would be approximately $200,000 we wouldn't get. Our tax rate is the lowest provided by law. It is 92 cents per $100 of assessed valuation. Any reduction would hurt us. To compare us with Montgomery County, Maryland, in my judgment, wouldn't be a favorable comparison.

Chairman PERKINS. That was my point. It is not a fair comparison, in any sense of the word. Many people just look at the situation around in the suburban areas of Washington and don't pick the situation in Huntsville, Alabama, or in your county where you are school superintendent.

I can see quite a different viewpoint, myself. I think I can see the good that has come from category B in all districts in the country. In fact, the GAO has never found where the money has been misspent to any degree in the whole impacted program.

As a general rule, I think it has worked well. But if there is any area where we need to make any correction, can you give the Committee your views, right now?

Mr. THOMAS. There needs to be, perhaps, some differentiation relative to those situations such as ours, as opposed to if we have to reduce Category B, out of Cook County. Our situation is very close and tight knit. Our community is heavily populated by blue-collar workers. We are talking about the average family income in the neighborhood of about $12,000 a year. It is a low-income area; it is not a white-collar, high-income area.

The fact of the matter is, we need every penny we can get for education.

Chairman PERKINS. Thank you.

Mr. McClory, do you have anything else to add?

Mr. McCLORY. I would ask unanimous consent to leave with your Committee, for your records, a copy of a couple of brochures which show the integrated nature of the school board; and also the fact

that two Naval personnel serve as school board members. This demonstrates the extent of the participation of the Navy personnel. Chairman PERKINS. Without objection.

[The brochures referred to follow:]

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