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not expect those already overburdened local governments to subsidize the bill for federally connected children.

As you are aware, Mr. Chairman, the administration has proposed placing impact aid in block grant funding in one package, and I suggest that this makes no sense. Impact aid funding does not pass through the State education departments. It goes directly to the schools. Adding another layer of bureaucracy will not make the system more efficient. In the agreement reached by the National Governors Association and the National Conference of State Legislatures on block grant fundings, they chose to exclude impact aid.

The responsibility of taking care of federally impacted students is that of the Federal Government, and it must accept this responsibility. We have heard from the administration how important education is to our future generations, yet we have not seen the same commitment in funding the programs for which it is directly responsible.

Mr. Chairman, I am also very supportive of the increased funding for the State Student Incentive Grant (SSIG] Program and the Star Schools Program. The President has once again zeroed out the SSIG Program, but it requested funding for star schools programs at $10 million. The SSIG Program has proven invaluable for both students and schools. At a time when the Secretary of Education has put reform of the Student Loan Program at the forefront of his agenda, we must not further reduce the amount of grants that we make to students.

It is becoming more and more difficult for the middle-income American to send his child to school. Lower-income students now receive loans which they cannot repay, instead of grants, and middle-income students cannot qualify for loans which they would be much more likely to repay. We must reverse the trend of student loans to those least able to repay, and once again award grants to students from the lower income families. The ŠSIG Program is cost effective and has been very successful. It is matched by States dollar for dollar, and that certainly means more bang for the buck, educationwise. Just what we need, I suggest. I believe the SSIG Program is worth of funding at the highest possible level.

PREPARED STATEMENTS

There are other programs that I have included that I ask for your support, and I ask that the full copy of my statement be printed in the record as if delivered. And I would be glad to respond, if I can, recognizing the time constraints, to any questions that you might have, Mr. Chairman.

[The statements follow:]

STATEMENT OF SENATOR JIM EXON Mr. Chairman and members of the Committee, thank you for the opportunity to offer my strong support for several programs which will come before the jurisdiction of this subcommittee.

Nebraska has a vital interest in nearly all categories of Impact Aid. Within the Section 3 program there are 10 schools which fall under the “A” payments, and 13 schools benefiting from “B” payments. Nebraska Impact Aid payments also include children who live in low-income housing and Section 2 students eligible due to federal projects which takes productive, taxable land out of the local tax base. Nebraska is home to three Indian tribes, the Winnebago, Omaha and Santee. These schools

rely heavily on Impact Aid for over half of their operating budgets. Mr. Chairman, Impact Aid is of basic importance to these schools and should be fully funded. Even more important, it is a fundamental obligation of the federal government. This should not be considered a "discretionary" program in the plain English sense of the word. It is mandatory. The Administration's recommendations have not even taken into consideration inflationary increases. Per pupil expenditures have increased an average of 7 percent over the past 6 years. Impact Aid funding increases have averaged less than 3 percent and school districts are falling further and further behind. This funding is basic to these schools and provides essential items such as books, teachers' salaries, desks and equipment. The funding which is received by these schools does not make them able to offer a “frills included" education; rather it provides them with basic resources to stay in business.”

Local communities are finding it more and more difficult to educate students from revenues collected from local taxpayers. We cannot expect these already overburdened local governments to subsidize the bill for federally connected children.

As you are aware, the Administration has proposed placing Impact Aid in block grant funding. This makes no sense. Impact Aid funding now does not pass through state education departments. It goes directly to the schools. Adding another layer of bureaucracy will certainly not make the system more efficient. In the agreement reached by the National Governors Association and the National Conference of State Legislatures on block grant funding programs, they chose to exclude Impact Aid. The responsibility of taking care of Federally Impacted Students is that of the federal government and it must accept it. We have heard from the Administration how important education is to our future generations, yet we have not seen the same commitment in funding of programs for which it is directly responsible.

Mr. Chairman, I am also very supportive of increasing funding for the State Student Incentive Grant (SSIG) program and the Star Schools programs. The President has once again zeroed out the SSIG program, but has requested funding for Star Schools programs at $10 million.

The SŠIG program has proven invaluable for both students and schools. At a time when the Secretary of Education has just put reform of the Student Loan Program at the forefront of his agenda, we must not further reduce the amount of grants we make to students. It is becoming more and more difficult for the middle income American to send his child to school. Lower income students now receive loans which they cannot repay instead of grants, and middle income students cannot qualify for loans which they would be much more likely to repay. We must reverse the trend of student loans to those least able to repay and once again award grants to students from the lower income families. The SSIG program is cost-effective and has been very successful. It's matched by states dollar for dollar-more bang for the buck. Just what we need. I believe SSIG is worthy of funding at the highest levels possible.

The Star Schools program is one of the most innovative new education programs to come along. All schools, especially those in rural areas, can benefit. Distance learning programs deliver live, interactive courses via satellite. My state of Ne. braska has been a leader in setting up the multi-state the Satellite Educational Resources Consortium (SERC). SERC provides instruction in areas such as foreign language, science, and math. SERC costs much less per pupil than traditional education, but does not sacrifice quality. Distance learning programs allow rural schools to provide a quality curriculum which they might not otherwise be able to afford. SERC is also providing advanced courses, seminars and in-service workshops for teachers during the school year and continue their education and keep up-to-date on current issues. Rural schools can now offer curriculum courses only previously available in larger, better funded school districts.

Thank you Mr. Chairman for the opportunity to express my support for these invaluable programs. I hope they are given priority and your most generous consider. ation. An educated society is a successful, taxpaying one.

Mr. Chairman, I ask unanimous consent to add my Nebraska colleague Bob Kerrey's testimony to the record.

STATEMENT OF SENATOR J. ROBERT KERREY Mr. Chairman, I would like to thank you and the Committee for allowing me this opportunity to present testimony in support of the Impact Aid program.

Over forty years ago, the Congress formally acknowledged the federal government's responsibility to assist school districts that educate federally-connected students. By enacting Public Law 81-374, the Impact Aid program, the federal govern.

ment recognized its duty to reimburse school districts for the property tax foregone because of federal ownership, and for lost revenues from “federally connected” parents.

Congress did not establish this program as a special benefit. Rather, it was the fulfillment of a federal responsibility to these communities.

Over the past decade, the impact aid program, like so many other essential education programs, has failed to keep up with the cost of living. In fact, the Administration's fiscal year 1992 budget request is about 20 percent below the amount Congress appropriated for this vital

program

last

year. I have some strong concerns about the President's proposed impact aid budget. First, it freezes the funding level for “a” students at the fiscal year 1991 level without taking inflation into account.

Second, it eliminates funding for "" students, arguing that "the presence of these children imposes a much smaller financial burden than that of "a" children, and it can be met with local resources." It is hard to tell that to the Papillion-La Vista School District that has about 2,400 “impacted” students, including 2,100 “super b” students. Or the Plattsmouth School District with 28 percent or 445 of its students being "impacted”, all “super b"s.

Third, for the Section 3(dX2XB) Program, which provides additional payments for any school district which is 50 percent or more affected, the Administration is proposing a separate appropriation. I oppose the Administration's effort to change this program's budget treatment. This program was originally designed to meet the financial needs of the more severely impacted school districts. The inadequate funding of the impact aid program is requiring more school districts to consider applying for funding under 30dX2XB). My fear is that there might be some push to eventually prorate payments under 3(dX2XB). The result would be that the children of the Bellevue School District and other highly impacted school districts will suffer if section 3(dX2XB) is prorated.

Finally the Administration again reduces the construction component of the program despite the important assistance it provides to communities facing an inħux of federally-connected students.

Mr. Chairman, this budget proposal does not take into account the very real needs around the nation. Further, few localities rely on impact aid as heavily as Nebraska. With the Strategic Air Command, Offutt Air Force Base and a number of Native American reservations within our borders, Nebraska cannot afford for the federal government to renege on its fundamental duties. These schools are also affected by the fact that the State of Nebraska continues to rely heavily on property taxes as the primary source of school funding. Any loss of revenue as a result of federai activities would be devastating without the compensation granted under the impact aid program.

It is estimated that 15 Nebraska school districts will be eligible for impact aid this year. In four of those districts—Bellevue, Macy, Santee and Winnebago-over 60 percent of the students fall under the 3(a) or 366) categories. As such, every cut in impact aid would be devastating to these schools. Every increased dollar is sorely needed.

Mr. Chairman, as you know, impact aid funds are not a luxury for these school districts. These funds pay for bread-and-butter operating costs, for textbooks, for teacher salaries. I urge upon the Subcommittee today, that federally-impacted schools can absorb no more cuts, and, in fact, that an increase in financial support for these schools is essential. I know that the Committee will do what it can to en. sure that this program is fully funded. I will be happy to work with this Committee to see that action is taken to provide these students with the best education possible.

Thank you Mr. Chairman and members of the Committee.

STAR SCHOOLS PROGRAMS Senator HARKIN. Senator Exon, thank you very much for your fine statement. And I would just thank you, again, for the very strong support through all your years of public life, and Senator, for your strong support for education.

I would also add that I am aware of the great strides Nebraska has made in the Star Schools Program in getting good education benefits to kids who live in rural areas and small towns and communities. Nebraska has been a leader in that regard.

Jim, just let me point out that in the impact aid, out of $740 million from last year, there is $135.5 million cut this year. About an 18-percent cut in impact aid that the administration has requested, especially in the parts under B. And you have 13 schools and $121.6 million budget has been zeroed out. That is nothing new. This has been expressed before, and the subcommittee has always put the money back in. And, I can assure you that we will do whatever we can to work with you to see that we meet our obligations as you so correctly state, Federal Government obligations, in this regard.

Senator Exon. Mr. Chairman, thank you very much, and as I said in my statement, you and the subcommittee and the full committee have been stepping in there doing the right thing with what funds you have. And as I cited, we are still not even keeping up with inflation. And it is very, very difficult. And I guess it is time I suggested we place our money where our mouth is with regard to education. If we cannot take care of the direct responsibility that, I think, the Federal Government has recognized with impact aid, then I guess the whole system up and down the line is likely to fail further. You and I know what a bad impact that is going to have on down the road as the United States of America attempts to become competitive in a very tough industrial climate, beginning certainly now and certainly with the new century.

Senator HARKIN. Jim, thanks. I appreciate your statements on the SSIG's, too. You are right. The States match it dollar for dollar, so why not continue.

Senator Exon. That is the biggest bang for the buck we have, Mr. Chairman. Thank you very much for your courtesy.

Senator HARKIN. Thank you, very much, Senator Exon.

ADDITIONAL SUBMITTED STATEMENT The subcommittee has received a statement from Senator Bentsen which will be included in the record at this point.

[The statement follows:]

STATEMENT OF SENATOR LLOYD BENTSEN Good Morning Mr. Chairman and Committee members. I want to thank Senator Harkin for permitting me to testify about this year's funding of the Impact Aid program. I respectfully urge this Committee to fully fund all facets of Impact Aid in fiscal year 1992.

As you know, Impact Aid is an important source of financial assistance to schools that educate the children of our military personnel. The Persian Gulf conflict showed how much the children of our fighting men and women suffered while their mothers and fathers were defending our nation. In many ways, these children sacrificed just as much for their country as their parents did. Their sacrifice compels us to ensure that they receive the best education possible while their parents serve our country. Fully funding Impact Aid is one of the things we can do to repay the debt we owe these children.

Impact Aid fills a funding gap which these school districts suffer. Because many military families live on base or rent, the impacted schools do not receive property taxes for their children. These school districts are therefore educating military chil. dren at local taxpayers' expense.

Congress created Impact Aid forty years ago to relieve the financial burden which these schools suffer. It presently is assisting numerous children and schools. In 1990, Impact Aid served 1.9 million children nationwide, approximately half of whom are military-dependents. It gave financial assistance to nearly 2,700 school districts. Texas alone has 118 impacted districts which depend upon Impact Aid.

Mr. Chairman, I recognize the current fiscal constraints with which you are contending. Nevertheless, we should still strive to increase funding for Impact Aid as much as possible.

Appropriations for Impact Aid have not kept up with the rising cost of public edu. cation, consequently underfunding Impact Aid for the last few years. For example, in fiscal year 1989, Congress authorized $735 million yet only appropriated $709 million. Fiscal year 1990 was similar with $785 million authorized but only $717 million appropriated. Finally, last year, fiscal year 1991, $835 million was author. ized but only $740 million appropriated.

If unchecked, the trend will continue. For example, in his fiscal year 1992 Budget request, the President has requested only $605 million although Congress has authorized $886 million for this year.

Mr. Chairman, if possible, I would like to see Congress appropriate what it has authorized. These impacted school districts cannot otherwise keep up with the rising cost of education. Impacted schools must have this assistance in order to offer our little homefront warriors the first-class education they deserve.

Our military families have given more than most Americans will ever be called upon to give for their country. Their service has taught us about patriotism, per. severance and character. Our nation's future is tied to our commitment to education and to a strong and secure military. Impact Aid reinforces our commitment in both these areas.

We must prove to impacted districts and military families that we care about them and their children. We can really back up our words by fully funding all parts of the Impact Aid program.

I thank the Chair and the Committee for their thoughtful consideration. STATEMENT OF HON. LARRY E. CRAIG, U.S. SENATOR FROM IDAHO

Senator HARKIN. Now we turn to my esteemed colleague from the State of Idaho. He served in the House, and now he is here. Senator Larry Craig.

Senator CRAIG. Well Mr. Chairman, thank you very much for a chance to come to your committee this morning. Let me congratulate you on this aggressive schedule you have with a number of people to testify on an obvious and most important issue, that of education, and what this Government will be doing in the next budget cycle with it. Let me ask that my full statement be made a part of the record.

You are right, Mr. Chairman, for 10 years I served in the House, and it was during that time that I became a regular person in front of your counterpart's committee, Chairman Bill Natcher's committee. We talked about impact aid, but to talk about other issues, like the Displaced Homemakers, TRIO funding, School Lunch, and National Youth Sports Programs. All of them critical and important playing their role in a total educational package.

At the same time that we are concerned about education and programs that are not being funded at levels that we would like to see them, I think it is also important, Mr. Chairman, to remember that we have seen an increase to $27.4 billion from $24.6 billion in the 1990 budget. We now have a President who speaks of being an education President, and has now put a new Secretary of Education in place that is pushing a whole set of very interesting priorities that I hope this Congress

will look at. I am not sure that it is a matter of not enough money, I think what you and I are going to have to decide is where the money that is available will go. And that is why I am before you this morning-recognizing that there is, in fact, a recommended increase from the 1989 through 1990-91 budget of somewhere near 20 percent in funding. So the question becomes where do we put the money, and how much can we afford to place.

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