4. Question: You state that "the number of dollars spent on education should be based on the educational needs of the children rather than the wealth of the school district." How do you define educational need? And do you recommend use of the "weighted pupil" technique or "adjusted instruction unit" technique in any federal general aid program?

Answer: Educational need is defined as the educational programs needed by student populations that vary in educational need. Following are types of educational programs needed by different student populations:

(1) Pre-Kindergarten children (three to four years of age).

(2) Kindergarten children.

(3) Children with various handicaps.

(4) Culturally disadvantaged children.

(5) Vocational education.

(6) Pupils enrolled in the basic programs in grades 1-6, 7-9 and 10-12. Our studies have shown that the per pupil cost of these different educational programs vary greatly and in allocating state funds, recognition should be given to these cost differentials as well as to the variation in wealth among the districts. It would be ideally desirable to use the "weighted pupil" technique or “adjusted instruction unit technique" in allocating general federal aid to the states if such data were available in all states. However, these data are not available and it would be impracticable to apportion general federal aid on the basis of either of these techniques at the present time.

You will note that we recommend the continuation of federal categorical grants for culturally disadvantaged children, for handicapped children and for vocational education. These categorical grants provide supplementary funds for these high cost pupils. If Congress abolishes the categorical grants for these high cost pupils it should use either a weighted pupil technique or adjusted instruction unit for apportioning general federal aid. The federal government would be compelled then to require each state to report the weighted pupil or adjusted instruction units in that state computed in accordance with federal standards. 5. Question: You state that 80% of the school districts in some states "do not have sufficient enrollments to provide minimally adequate programs." What states and how many school districts altogether? And should federal general aid be conditioned on a reorganization of these districts?

Answer: It would be impossible to give an exact answer to this question without making a study of school district organizations in each state. Florida is the ninth state in population in the United States and it only has 67 school districts. Experience has shown that that number is fully adequate. Some authorities have recommended that even some of Florida's school districts be consolidated. Examples of states with excessively large numbers of districts are: Nebraska, 1,335 ; California, 1,117; Texas, 1,161; Illinois, 1,144.

In 1971-72, there were 16,920 operating school districts in the United States. We probably do not need more than 2,500 school districts in the United States. Whether general federal aid should be conditioned on a reorganization of these districts is a debatable question. It is a matter of policy. The National Educational Finance Project has made an extensive study of school district reorganization, but we did not study the consequences of making general federal aid conditional on the reorganization of those districts. It would be difficult for the federal government to make equitable standards for district reorganization that would be applicable in all states. The type of district organization most suitable in a particular state varies somewhat with the history of that state. For example, the county historically has been an important unit for school governance in many Southern states. In some of the New England states the town has been the basic unit. It is doubtful that appropriate federal guidelines for district reorganization could be incorporated in a general federal aid statute. In view of the diversity of the states, district reorganiation should be accomplished by the states. The resistance to district reorganization should diminish as we approach full state and local funding.

6. Question: You state that "a national foundation program would equalize financial resources available per pupil better than any other approach." And that such a foundation program “would also tend to transfer the control of federal aid from Washington to the states."

Answer: That is our position on this matter.

7. Question: You state that the higher the level of state and federal support the greater the progressivity of the tax structure. Therefore, isn't it desirable if we want to have an equitable distribution of taxes that we have massive state and federal aid?

Answer: The answer to this question is yes. It is impossible to have an equitable system of financing the public schools without massive state and federal aid.

8. Question: You state that Title I funds, more than any other local, state or federal revenue studied, "are allocated to those districts where pupils had the greatest educational need." You also state that the Title I formula appears to "have the potential to equalize funds" among school districts within the states. Could you expound on these statements?

Answer: Our studies showed that more Title I funds per pupil on the average were allocated to those districts where the pupils had the lowest achievement and therefore, the greatest educational need for improvement. Our studies also showed, on the average, that more federal funds per pupil were allocated to those districts where the adjusted gross income per person was the lowest. Therefore, Title I funds tended to go to the districts with more than average educational need and less than average wealth.

Sincerely yours,

R. L. JOHNS,
Project Director.

Mr. PUCINSKI. I want to congratulate you for a very effective study. Mr. JOHNS. Thank you.

Mr. PUCINSKI. There is no question that this Congress is going to have to move on this whole issue of aid to education. I think there is a real crisis in education. I believe what is happening is that the local taxpayer can no longer carry this burden. It is now abundantly clear that the local property taxes can no longer pay for fire protection, police protection, sanitation, and all of the other housekeeping chores and then provide good education on top of that.

So that we have now raised the local taxes to a point where they are confiscatory. We do have to have, in my judgment, the Federal Government playing a more significant role in financing education. I think your study will certainly help us make out a strong case for that concept. To that extent, I am very grateful to you for being with us today.

Mr. JOHNS. We appreciate the courteous treatment we received here, and we will answer the questions you submitted to the best of our ability and send them back. We have to go to Texas next week and we will reply to your questions as soon as we get back. We are making an intensive study in Texas, because of the court decision in that State. One of the things the staff of the National Educational Finance Project is doing is working with the individual States in helping them solve their problems. That is where we run into the legislatures saying, "Where are we going to get this money?"

Mr. PUCINSKI. I hope the State of Texas listens to you more than the President did. Dr. Johns, we will insert the heart of your report, chapters 8 and 10 of volume 5, as appendix A of these hearings. The subcommittee will adjourn until tomorrow morning, to resume the hearings then.

(Whereupon, at 12 noon the subcommittee recessed, to reconvene on Wednesday, April 19, 1972.)

FINANCING OF ELEMENTARY AND SECONDARY

EDUCATION

WEDNESDAY, APRIL 19, 1972

HOUSE OF REPRESENTATIVES,

GENERAL SUBCOMMITTEE ON EDUCATION

OF THE COMMITTEE ON EDUCATION AND LABOR,

Washington, D.C. The subcommittee met at 12:10 p.m., pursuant to adjournment, in room 2261, Rayburn House Office Building, Hon. Roman C. Pucinski (chairman of the subcommittee) presiding.

Present: Representative Pucínski.

Staff members present: John F. Jennings, counsel; Alexandra Kisla, clerk; and Cindy Banzer, minority legislative assistant.

Mr. PUCINSKI. The committee will come to order. We are very pleased to have this morning Mr. Joel Berke of the Syracuse University Research Corp. and Miss Betsy Levin, from the Urban Institute, to continue our hearings on the financing of elementary and secondary education.

This record is being very carefully examined by all interested parties. While all of our members cannot be here for the hearings, I am sure the record being made here this morning will be particularly interesting to our members because of the high regard we hold for the Syracuse University Research Corp. and also because of the important work the Urban Institute is doing in this whole field. So I am very pleased to welcome both Mr. Berke and Miss Levin.

STATEMENTS OF BETSY LEVIN, DIRECTOR OF EDUCATION STUDIES, THE URBAN INSTITUTE, ACCOMPANIED BY DR. THOMAS MULLER AND WILLIAM SCANLON, AND JOEL S. BERKE, DIRECTOR, EDUCATIONAL FINANCE AND GOVERNANCE PROGRAM POLICY INSTITUTE OF THE SYRACUSE UNIVERSITY RESEARCH CORP.

Miss LEVIN. I appreciate the invitation of this subcommittee, Mr. Chairman, to testify here today and with me are Dr. Thomas Muller and Mr. William Scanlon who have also worked on this study. So if you have any specific questions about certain aspects of this study, they may be able to answer them. If it would be useful to you, we have brought some slides that might be able to summarize some of the work we have done and to indicate some of the implications of our studies. Mr. PUCINSKI. I would particularly like to welcome to the committee, Mr. Scanlon, who is a former constituent of mine. Please proceed. Miss LEVIN. Our studies, part of which were done for the President's Commission on School Finance, involved a detailed analysis of nine States. We selected these States for a number of purposes.

First of all, they represent several different levels of State funding, full-State, high-State, moderate- and low-State aid, so we could see what the impact would be of States which have different State financing systems. And also they are broadly representative of various regions of the country. Our concern was really with the disparities within States although we also looked briefly at interstate disparities. In our work, we found that really it is the differences in local revenues that cause the greatest disparities.

As you know, most of the States rely quite heavily on the local property tax to finance education and this is the cause of the inequalities.

In our studies, we looked at these States in terms of both the tax burdens, that is who is paying for education, as well as the disparities in the per pupil spending levels and we developed some computer models which would allow us to determine the impact of various alternative ways of financing education.

We subdivided each of these States into four categories of school districts, central cities, suburbs, smaller cities, and predominantly rural areas. In our States, over half of the funds for education had to be raised from local revenues, at least in the year for which we studied them, which was 1968–69.

To get some idea of why there are disparities in local revenues, although I suppose by now the committee is pretty well aware of these problems, we looked at property values and property taxes. We find that in general, central cities have a fairly high property base while suburbs and particularly the rural areas have a low property base.

Basically the reasons why the central cities have such a high property base: first of all, there is a concentration of commercial and, to a lesser extent, industrial property in the central cities. There is also a higher proportion of nonpublic school enrollment in central cities compared to other types of districts and a lower proportion of school-age population relative to the total population, largely due to the outmigration of households of child-bearing age to the suburbs.

Since property values are measured in terms of public school pupil, you see why the central city has a much higher base.

Now, central cities have a slightly lower tax rate than the average for education while suburbs have a very high tax rate relative to the other types of districts. Rural areas, of course, have the lowest tax rates.

To demonstrate why we should not solely focus on tax rates for education, we examined three States-Delaware, California, and Michigan. When we compare the central city and suburban average tax rates for education we find that generally the suburbs have higher taxes for education. But when we look at the total property tax, that for other public services as well as education, we find that although Detroit has a much lower tax rate for education, it is spending a higher proportion of its property taxes for other public services, bringing the total tax to the same level as the suburbs.

In California, we find that the central cities have a much higher total property tax than the suburbs and in Delaware there is a substantial difference between Wilmington's total property tax and that of the suburban areas, which is much lower.

So that is why we feel that you can't just look at the property tax for education, but at the total property tax.