STATEMENT OF MAX BRUNER, JR., SUPERINTENDENT OF SCHOOLS, OKALOOSA COUNTY, FLORIDA

Mr. BRUNER. Thank you very much, Mr. Sikes.

Distinguished Chairman, members of the committee, it is a privilege and honor for me to be here this morning. I think I would be remiss in my responsibility here before you if I didn't tell you in what esteem we have held you down through the years as chairman of this very fine subcommittee, the outstanding job you have done for impacted areas all over the country.

I would just like to say that in my district, in Okaloosa County, 267 acres of land are off the tax rolls, actually-some 27,000 youngsters that I represent here. Almost 50 percent of the entire taxable property-almost 50 percent of the entire county is taken off the tax rolls, and only slightly less than 50 percent can we levy any taxes for educational purposes.

I have an enclosure I would like you to take a look at. (See Mr. Bruner's prepared testimony.) The coloring indicates the tax exempt property. We have roughly 100,000 people in the southern part of the county adjacent to Eglin Air Force Base. The white would indicate only the very minute taxable portion of our property there.

We believe that impacted legislation has been the lifeblood of our district, and certainly we would like to make an appeal to the committee to continue the funds in the 3(b) category. We believe although it is true some of these people, many of them do pay directly or indirectly ad valorem taxes, that so much of the land is taken off the tax rolls by the employer, which is the Federal Government, and is tax exempt, we would like to make a plea for the continuation of the full funding under the category (b) program. Thank you.

Chairman PERKINS. All right. That was a good statement. We will go now to Dr. Fish, President, Impacted Area Schools.

STATEMENT OF H. DAVID FISH, PRESIDENT, IMPACTED AREA SCHOOLS, ACCOMPANIED BY LANSTON E. ELDRED, CONSULTANT, IMPACTED AREA SCHOOLS

Dr. FISH. Mr. Chairman, we appreciate this opportunity to speak to you today, and members of the committee.

We also appreciate having our remarks entered into the record. [The statement of Dr. Fish follows:]

Testimony on PL 874

June 21, 1977

By

H. David Fish

President, Impacted Area School

And

Director, Special Projects

San Diego Unified School District

San Diego, California

IMPACTED AREA SCHOOLS

INFORMATION SERVICE

Mr. Chairman and members of the Committee:

I appreciate this opportunity to appear before you today on behalf of the Impacted Area Schools. This week and next, you will hear testimony on Impact Aid, as my colleagues from large and small school districts across the country report to you on the operation of the program and its importance to their school districts.

After twenty-six years, the story should be familiar; but, unfor-
tunately there are those who have forgotten or who have never heard.
Worse yet, there are those who have committed themselves to the destruc-
tion of the program without realizing the injustice they propose to local
taxpayers and the havoc they would bring to many school districts far
from Washington.

We ask those who listen today or read the testimony that follows, to give this program the depth of examination and objective consideration that it is receiving from the Chairman and members of this Committee. We ask those of you, who live in the Washington area to remember that we are talking about a national issue, not an isolated phenomenon in the neighborhood of the nation's capitol. For all of our listeners, we ask that you consider the premise that the long life of the program in the face of relentless executive opposition may be due to some fundamental justice that Congress recognizes, and that others who are not directly accountable to the local community do not.

In the impacted school districts, citizens are surprised that impact aid is a controversial issue. To them, there is no controversy. The non-taxpaying federal property is real, tangible and usually large, while the children of federal employees are being educated in the local schools. It is incomprehensible that the federal government, after removing property from the tax rolls, would consider not even partially assisting the local taxpayers in meeting the educational cost burden of educating the children who's parents work on that federal property. In the General Accounting Office report, there are several statements about what the effect on local property tax rates would be if the school districts did not receive Impact Aid. We wonder if the federal government has ever conducted a study on what the effect would be on users of electricity if the federal government decided not to pay its electric bill. A ridiculous and unfair proposition, but very similar to proposals now being made to phase out Impact Aid somebody else would have to pay or educational programs would be reduced.

My colleagues will present specific information from their own districts about Impact Aid and the support of education at the local level (I also have included some data on the San Diego Unified School District.). Impact Aid is best understood from the perspective of the local case because as revenue for general purposes it is properly part of the overall educational program support of the school system. However, there are some basic principles and facts about Impact Aid and school finance that must be stated to establish the nature of the program as it relates to local school finance.

1. Impact Aid is general aid (except for low-rent housing funds)
that supports the basic educational program of the school district
and therefore if lost must be replaced by increasing local property
taxes or reducing programs. Few school districts have any other
options.

a.

The property tax is regressive and particularly hard on fixed income and poor families.

b. Local tax increases are often controlled by some type
of public vote. Local tax payers are balking at the cost
of real estate tax supported services they now receive, and
certainly cannot be expected to willingly vote to assume
the expense of providing those services to others, such
as the federal government and its employees, who are not
paying their fair share.

c. Reducing educational programs usually means reducing
staff expenditure since over eighty percent of educational
expense is for personnel.

2. Impact Aid is paid only for students in attendance in the school
system who are receiving educational service. If the non-taxpaying
property has no residents or work force, then the school district
receives nothing regardless of the value of the property. Payment
is made only for services actually rendered, not on some hypo-
thetical "in lieu of tax basis".

3.

The average American school district derives about half of its operating revenues from the local property tax. Of this local property tax, less than one half comes from residential property, and slightly more than half of the local property taxes come from places of employment - commercial and industrial property.

4. The actual amount of the Impact Aid payment that is received by a local school district for each child is calculated to approximate the portion of the cost of that child's education that is lost to the school because of the child's relationship to tax exempt federal property.

For the category B child, who either lives on federal property or resides with a parent who works on federal property, about half of the local property taxes that would be available for the child's education are not available to the school district. In the case of the category A child, who both lives on federal land and has a parent working on federal land, there are no local property taxes available for that child's education.