This assumption is based on studies such as that by Dean Dick Netzer. "Economics of the Property Tax" (the Brookings Institution: 1966) as well as our own analyses. There are certainly authors who have disagreed with that assumption, but since we did not have any actual data, we had to compute.

Mr. VEYSEY. I think it should be pointed out for the committee that it is an assumption. I don't know whether it is right or not, and I don't think anyone can prove it one way or the other, but that makes an wful lot of difference when you realize that low-income situation there, because you have made that particular assumption.

Miss LEVIN. It will probably vary, as I think you yourself pointed out the other day, from area to area within a State. It depends upon the supply or demand for housing in an area whether the owner can pass all of it on in the form of rent. Then you may be shifting the whole thing forward.

Mr. VEYSEY. That is right.

You are simply saying we have assumed half of it is passed on, which is probably in any given case likely not to be the case.

Miss LEVIN. But on balance, it may work out.

Mr. VEYSEY. That does some funny things to your redline income there, it seems to me.

Miss LEVIN. I think you are right, but I think on balance the assumption is not that far off. At least other researchers have shown, when checked, it is a reasonable assumption to make when you are looking at a State as a whole. As I say, different parts of the State will be different, but when you look at the State as a whole, it is probably a reasonable assumption.

Mr. BELL. Of course, a lot of your low-income people don't pay rent. Mr. VEYSEY. That is the point, yes.

Miss LEVIN. You are correct and I should note that we did not take into account low-income people who rent public or publicly subsidized housing which may be tax exempt. Thus you are correct in noting that the property tax burden for low-income groups may be overstated in Our analysis. However, we also exclude Federal tax offsets, so that we may be overstating the burden on the middle- and upper-income groups

as well.

Mr. BELL. You are assuming in the rent the renter always pays his property tax, but also takes care of the rent, also inadvertently takes care of the property tax, too.

Miss LEVIN. Yes. The landlord is not going to absorb the total cost himself, and the rent reflects at last some of the property tax that the owner has to pay. In some of our California analyses, we assumed it was half.

Mr. BELL. Yes. Is it that low? I thought it would be just about right up to the snuff, most of the time.

Miss LEVIN. Our data we are presenting to you today does make the assumption that all of the tax is passed on to the renter in his rent. Mr. VEYSEY. She pointed out, Mr. Chairman, the situation varies from place to place, depending on the supply and demand. If the owner is able to pass that on, and fully rented up to capacity, he is going to do it. If he cannot, he cannot.

Miss LEVIN. If it is a competitive market.

Mr. VEYSEY. He may pass none of it on, or he may pass it all on. Miss LEVIN. Before proceeding with our analyses, I should point out a fact of which this subcommittee is well aware: that simply achieving dollar equality is inadequate. There are differences in the cost of providing the same educational service, and, as Mr. Berke pointed out, there are differences in student need. The proportion of students who may need higher cost programs, such as the intellectually gifted. the vocational, or disadvantaged student, does vary among the types of districts.

We focused primarily on cost differentials in our study for the President's Commission. The principal factor affecting the differences is instructional costs. There are differences in noninstructional costs. but they are relatively slight in most of the States that we examined. You do find administrative costs higher, on the average, in urban areas. as are plant operation and maintenance costs.

But on the whole, the basic difference is in instructional costs, and it really boils down to teachers' salaries.

We looked at the differences in teacher experience by type of dis trict for Delaware, California, and Michigan. Comparing teacher experience in central cities with that of the rural areas, we find that in every case, except in Michigan, central cities clearly have a higher proportion of experienced teachers than the rural areas. When we looked at the suburban districts, we found suburban areas have the smallest proportion of experienced teachers. Since, as you know, the salary schedules all reflect seniority, the central city districts have to pay more just because they have, locked in through the tenure system. a higher proportion of experienced teachers.

Mr. BELL. You mean the deprived central city areas have to pay a larger amount?

MISS LEVIN. Yes, because they have such a high percent of the teachers at the maximum end of the salary scale in terms of experience. Now, you will generally find that most suburbs which are new and growing will hire the bright young teachers just out of college with no experience.

Mr. BELL. Then you are saying that the central city areas get the most experienced and best teachers?

Miss LEVIN. No, I am not equating experience with "best." I think perhaps experience does help, but only up to a certain point. There are probably diminishing returns as far as the quality of education is concerned after a certain period. The point is that the central city, because of the tenure system, still has to pay these teachers a greater amount of money whether or not they are "better" teachers.

I don't think we can look at it in terms of better education, but as costs which the central city cannot avoid because of the tenure system and the salary scale.

Mr. VEYSEY. I think that is an interesting point you make there, because the impression has often been given that it runs counter to that, that the central cities are only able to get the very inexperienced teacher, and the better teacher hops out to the suburbs.

Miss LEVIN. No. Our data does not show that when you examine the average for central cities and compare it with the average of all suburban districts.

Mr. BELL. I think Mr. Berke indicated that.

Miss LEVIN. I don't want to interpret for him, but I think what he meant was the ghettos within a central city, and you do find—he was at that point talking about title I within a single school districtand we do find the same results he mentioned in many of the city districts we studied on a school-by-school basis. We find the more experienced teachers and those with more advanced degrees are in the white, middle-class schools within the central city district; but in the poor and minority schools within that same district, you have the inexperienced teachers. They are leaving the inner core of the city for the outskirts of that same city, as well as leaving it for the suburbs.

Mr. BELL. You are saying that when you take the whole area of the central city, there are some areas that are not so deprived, and they have a tendency to have better teachers?

Miss LEVIN. More experienced.

Mr. BELL. More experienced teachers, yes; but as Mr. Veysey has said, that seems to belie what we have been hearing, in the talk of so-called combat pay for the teachers who go into the central city areas. I mean, how much is the so-called ghetto area? We speak of the central city, and how much of it is ghetto?

Your statement would tend to diagree with the comments that we have always heard. That has been one of the big weaknesses they have been talking about: inadequate, inexperienced teachers.

Miss LEVIN. I should point out that we do have data which show that central cities do have to pay teachers with equivalent education and experience more than the suburb and rural areas, partly due to the

higher cost of living, but also to the fact that they may be having to attract teachers with this higher salary.

Mr. BELL. In other words, they are paying combat pay?

Miss LEVIN. In a sense, yes.

Mr. VEYSEY. Mr. Chairman, let me go to the definition of the central. city as you have used it. Could you bring that down to terms we can understand? In Los Angeles, what is the central city?

Mr. LEVIN. That is a school district with a total population of 250,000; so in the State of California, the central cities are Los Angeles

Mr. BELL. That would include West Los Angeles and everything else.

Mr. VEYSEY. That is everywhere?

Miss LEVIN. San Diego, Oakland, Long Beach, and San Francisco. Mr. BELL. No. I mean we are talking about Los Angeles as one school system, one school district. Brentwood is in it, and the West Los Angeles area, the wealthy areas, San Fernando Valley, Bel Air, they are in that. They would, under your classification, be called central city.

Miss LEVIN. We are talking about the Los Angeles Unified School District.

Mr. VEYSEY. Yes.

Mr. BELL. Yes.

Mr. VEYSEY. I think your term "central city" is misleading.

Mr. BELL. Question of semantics.

Miss LEVIN. We are talking about the school districts, regardless of which residential areas are included in the district borders.

Mr. BELL. I think that is where the difference is. When we hear "central city," we think of so-called hard-core areas.

Miss LEVIN. Inner cities.

Mr. SCANLON. Part of this confusion results from using this as the average for the total sample. First of all, the average is just one measure of the group of teachers, and I think we will find in central cities that we have concentrations of two types of teachers, the young, inexperienced teacher, and the much older, very experienced teacher who is locked into the inner city school system because of pensions. His pension rights are not transferrable to the suburban schools, and thus he is locked in until retirement. Those teachers are generally concentrated in the middle-class neighborhoods, and the new, inexperienced teachers are generally sent into the inner city.

The other thing is that since it is the presentation of data for the total sample of States, while the term central city may be inappropriate for describing Los Angeles, we found similar patterns in other States. Areas like Detroit, Wilmington, New York City are more typical of "central cities" than Los Angeles. Our findings were the same in these States regarding the distribution of teachers.

Miss LEVIN. You see the same phenomenon in Detroit, compared to the suburban average for Michigan. Again, in terms of advanced degrees, you will find that there is a mixed pattern. Sometimes suburbs have more teachers with advanced degrees; sometimes central cities. Rural areas, however, consistently have the lowest proportion of teachers with advanced degrees.

So I think the general point these data illustrate, is that even if you had a uniform salary schedule, you would still be spending more

money in urban areas than you do in rural areas, just because the salary scale will be graduated according to both advanced degrees and experience.

As we were discussing earlier, however, we do not have uniform salary scales; and we find, using Michigan as an illustration, that a teacher with a bachelor's degree with no experience gets a higher salary in Detroit then in the suburbs. The salary for the same teacher is even lower in the rural areas.

For a teacher with a master's with maximum experience, the suburbs are paying the most; but central cities are paying the second highest, with a very sharp drop in the salary for an equivalent teacher in the rural areas, and

Mr. BELL. Again, when you are speaking of central cities

Miss LEVIN (continuing). We are speaking of Detroit. Detroit is a single school district.

Also, in Delaware, our other example, we are speaking of the Wilmington school district which is also the entire city of Wilmington. California is different, where you have cities and school districts which are not coterminous.

Mr. BELL. Los Angeles has one school district.

Miss LEVIN. For example, Baldwin Park is in Los Angeles County, but is a separate school district.

I'd like just briefly to point out student need differences, since Mr. Berke has already discussed it in such great detail. I would just like to illustrate with the State of Michigan the problem of differing concentrations of different types of students.