primarily with respect to uniform per pupil allocations and the merger with formulas on teacher units or teacher salaries. The equalization parts of state aid usually employ an adjustment for assessed property valuation, and this was not included in Federal aid allocation formulas devised by states.

CONCLUSION

American educational finance is shot through with irrationality, inequity, and the consistent denial of equality of educational opportunity. But for the first time in decades, reform is in the air. Unfortunately reform will be costly because it will require bringing low spending school districts closer to expenditures of the more wealthy and will require additional expenditures to recognize higher costs and higher levels of educational need. Increasingly, educators, politicians and parents will be turning to the Federal government to bear those costs. And yet there is a heavy strain of skepticism abroad, a substantial doubt that additional dollars will really make any difference at all in the quality of American education. But the evidence to date is inconclusive, with no definitive proof. one way or the other, that added resources bring about increased learning. What has been shown is that marginal funds seldom are effective and that many programs have been mismanaged, conditions which are remediable.

What has the experience with Federal aid to date shown? Studies conducted by the Syracuse University Research Corporation have examined both the fiscal in pact and the decision-making patterns related to Federal aid in a sample of populous and industrialized states in all sections of the nation. The major conclusions are that Federal aid, while it has been directed to areas of greatest need such as large central cities, poor rural areas, and districts with large numbers of the poor and the non-white, has been too small an amount to significantly effect the total problems of educational finance that afflict most of the states of the nation. While Title I of ESEA is the most effective equalizing force in the mix of local, state, and Federal funding, its effect is significantly diluted by other programs which often help richer districts more than they do poorer ones.

Administratively, states have tended to deal with the distribution of Federa! aid as an internal matter for the education bureaucracy. Most governors, legislators, and urban lobbies are only dimly aware of the potential for altering Federal aid flows. Frequently existing state aid formulas will be relied upon for the allocation of Federal monies in an attempt to minimize conflict and utilize familiar procedures. State department personnel seldom exercise vigorous leadership or seek to implement any but clear Congressional mandates and those regulations most stringently stressed by the Federal officials. Yet to each of these generalizations we have found a few agencies within states that have been shining exceptions, who have sought to utilize Federal aid for achieving greater equality of educational opportunity by matching Federal resources to areas of greatest need, particularly those of the educationally disadvantaged and the communities most threatened by fiscal crisis.

TABLE 1.-FEDERAL AID AND TOTAL REVENUE, BY CENTRAL CITY, OUTSIDE CENTRAL CITY, AND NONMETROPOLITAN AREAS, 1967

TABLE II.-COMPARISON OF FEDERAL AID PROGRAMS AND STATE AID FOR SCHOOL DISTRICTS IN METROPOLITAN

Source: Policy Institute of the Syracuse University Research Corp., project: "The Pattern of Allocation of Federal Aid to Education," supported by Ford Foundation Grant 690-0506A, Joel S. Berke, project director.

TABLE III.-REVENUE FROM FEDERAL SOURCES, BY PROGRAM, COMPARING STATEWIDE, CENTRAL CITY, OUTSIDE CENTRAL CITY (SUBURBAN), AND NONMETROPOLITAN AVERAGES

TABLE IV. COMPARISON OF FEDERAL AID PROGRAMS AND STATE AID FOR SCHOOL DISTRICTS IN 5 LARGEST METROPOLITAN AREAS RANKED BY MEDIAN FAMILY INCOME, 1967

TABLE V.-COMPARISON OF FEDERAL AID PROGRAMS AND STATE AID FOR SCHOOL DISTRICTS IN 5 LARGE METROPOLITAN AREAS, BASED ON PERCENTAGE OF NONWHITE ENROLLMENT, FISCAL YEAR 1967

1 ESEA II, NDEA III, VA, vocational education, lunch and milk. Source: Policy Institute of the Syracuse University Research Corp., project: "The Pattern of Allocation of Federal Aid to Education," supported by Ford Foundation grant 690-0506A, Joel S. Berke, project director.

The author of this statement is deeply indebted to colleagues who have advised or assisted him in the research drawn upon in preparing this testimony, although they had no hand nor were they consulted in the preparation of this statement: Stephen K. Bailey, John J. Callahan, Alan K. Campbell, Robert J. Goettel, Robert W. Hartman, Michael K. Kirst, Robert D. Reischauer, Seymour Sacks, and Donna Shalala.

(Whereupon, at 12:40 p.m., the subcommittee recessed, to reconvene for further hearings on Wednesday, April 26, 1972.)

FINANCING OF ELEMENTARY AND SECONDARY

EDUCATION

WEDNESDAY, APRIL 26, 1972

HOUSE OF REPRESENTATIVES,

GENERAL SUBCOMMITTEE ON EDUCATION OF THE
COMMITTEE ON EDUCATION AND LABOR,

Washington, D.C. The subcommittee met at 10:15 a.m., pursuant to recess, in room 2257, Rayburn House Office Building, Hon. Roman C. Pucinski (chairman of the subcommittee) presiding.

Present: Representatives Pucinski, Ford, Meeds, Ashbrook, and Bell.

Staff member present: John F. Jennings, counsel; and Cindy Banzer, minority legislative assistant.

Mr. PUCINSKI. We will proceed with our meeting this morning with other members joining us shortly but I don't want to tie up our colleague, Congressman Dow. So, Congressman Dow, come up to the witness chair and let's proceed. The others will be joining us as we move along. I would like to point out for the record that the text of your bill, H.R. 6521, appears at the beginning of these hearings. I inserted it in the record on the first day of hearings.

We do have your statement and will put it in the record at this point.

(The Statement referred to follows:)

STATEMENT OF HON. JOHN G. Dow, A REPRESENTATIVE IN CONGRESS

FROM THE STATE OF NEW YORK

I am pleased to appear today before this subcommittee to testify in support of the bill, H.R. 6521, which I introduced in the House on March 23 of last year. First, however, I should like to commend the memmbers of this committee for your timely attention to the pressing problems facing our nation's public elementary and secondary schools and for your efforts both to find solutions to these problems and to define a new, more important role for the Federal government in the financial substructure of our public schools.

I have followed with great interest the testimony already presented to this committee concerning the crisis in our educational system and the need for increased Federal financial aid to the public schools. The basic elements of this crisis have already been discussed in some detail: the rising costs of providing all educational services, the inequalities prevailing in the distribution of educational resources at all levels of government, the lack of sufficient resources to provide an excellent education to every student in the land. Since I introduced my bill last year, the decisions of the Supreme Court of California and Federal and State courts elsewhere in the nation-which you have also examinedhave added a new urgency to the situation of our school financing arrange

ments.

Some of the bills under consideration here seek to assure adequate school financing and to relieve the pressures on local resources by raising substantially the annual Federal contribution to the expenses of the public schools. The ap

propriate level of Federal spending in support of the public schools is surely a proper and timely topic for consideration by this committee; my own bill, however, addresses a more limited Federal goal. It envisages only a limited commitment of Federal funds. Simply put, its aim is to have the Federal government provide financial incentives for the States to assume a greater proportion of the burden of underwriting the expenses of the public elementary and secondary schools. Underlying this aim is the belief that the provision of a fair and excellent system of the public schools is primarily a responsibility of the State government, under the provisions of both the Federal constitution and the constitutions of the various States. Although the Federal government and the local school boards both have important roles to play, the ultimate responsibility belongs to the State.

This belief in the primary responsibility of the State government for the provision of educational services to the children of the State has gained impressive support from many sources in recent months. In my own State of New York, as you have heard, the Commission on the Quality, Cost and Governance of Elementary and Secondary Education has recently recommended that the State government assume full responsibility for providing all non-Federal public school monies in the State. It held that full State funding was the most effective method of fulfilling the mandate of the State Constitution that the Legislature "shall provide for the maintenance and support of a system of free common schools"-while at the same time assuring that the system provide an education to all children on an equal basis. The Commission further held that the introduction of full State funding would not jeopardize legitimate State interests in maintaining local control or in providing special resources to schools charged with educating children with special educational, physical or emotional disadvantages. Nor would full State funding be allowed to result in a decline in the quality of the education provided in any of the State's public schools.

The desirability of full State funding of all non-Federal expenses of the public schools also served as the basis of the major recommendation of the President's Commission on School Finance. The Commission recommended that the States assume full responsibility for school funding-although it disagreed with New York's Fleischmann Commission in recommending that local supple ments to the State-provided resources be allowed up to ten percent.

To advocate that the States-rather than either the local school boards or the Federal government-should take the greatest role in financing the schools does not mean shirking our responsibilities as members of the Congress of the United States. It does not preclude the Congress' adopting legislation which would provide a major increase in Federal funds going to the local public schools. Rather it represents a recognition that the Congress alone cannot solve the problems of the schools.

One of the urgent problems facing the public schools is, of course, the property tax, which is the only major source of revenue available to the local school boards to finance their share of school expenses. About 53 percent of school revenues are provided by local school districts, on a nationwide basis. 80 percent of these local funds are derived from the property tax, according to the figures provided by the President's Commission. Even more revealing, 95% of local tax revenues come from the property tax. This means that something approaching $18 billion is being derived each year from local property taxes for the support of the public schools. Much has been said concerning the regressivity and other objectionable features of the property tax, which I will not repeat here. But I would like to stress the obvious difficulties which would be faced if the Federal government were to try singlehandedly to eliminate the use of property taxes to finance the public schools. It would mean raising the Federal contribution to the local public schools from less than $31⁄2 billion annually to nearly $18 billionat the current level of education expenditures. Not only that. The need to funnel such a large amount of Federal money into the single purpose-relieving the property tax burden-might well jeopardize the funding of other Federal educational programs, programs which the Congress has chosen to establish over the years to serve the nation's special educational needs.

There is yet another difficulty with attempting to solve at the Federal level the problems associated with excessive reliance on the local property tax for the support of the public schools. It stems from the fact that different States rely to different degrees on the local property tax. In my State of New York, 47.7 percent of educational revenues came from local, mainly property tax, sources in 1970-71, but the percentage of local to total revenue varied from a high