Mr. SELDEN. I don't think they receive more on a per capita basis and it just happens that there are a lot of poor people that live in Westchester County as well as a lot of rich people.

Senator DOMINICK. I am not saying you ought to cut them off. I am just saying I didn't think the distribution was right.

All right now, going on there is a theory around and it seems to me it is unfortunate somehow or other that there is an expertise in the Federal Government which you don't have in the local and State governments. You do not agree with that, I guess.

Mr. SELDEN. Not necessarily.

Senator DOMINICK. Excuse me, Mr. Selden, I am going to have to go. I have only got 5 minutes to vote.

Mr. SELDEN. Thank you, Senator. May I just answer his question anyway for the record?

Senator PELL. Certainly.

Mr. SELDEN. The question was, Did I assume that there was more expertise at the Federal level than at the State level and I said, "Not necessarily." The reason I want Federal monitoring of State equalization programs is that property assessing is notoriously subject to political effect and this conceivably might happen on a statewide level. There will be less chance to have political tampering with the tax assessing equalization procedure if you have Federal oversight, I feel.

Senator PELL. Thank you very much, Mr. Selden, for being with us and we appreciate our relationship in the past.

Mr. SELDEN. Thank you.

(The prepared statement of David Selden follows:)

69-927 0-72- -13

A NATIONAL STRATEGY FOR FUNDING EDUCATION

Testimony Before the Subcommittee on Education

of the

United States Senate Committee on Labor and Public Welfare

David Selden, President

American Federation of Teachers, AFL-CIO
Wednesday, November 3, 1971

On October 5, 1971, I testified before the United States Senate Select Committee on Equal Educational Opportunity. The Committee, as you know, is headed by Senator Walter F. Mondale. I made the point that there could be no equality of educational opportunity unless our nation is willing to devote approximately twice as much money to schools as it does at present. I further suggested that it was not unreasonable to devote 10% of our gross national income to the education of the young. At the present time, we are using just under 6% for that purpose. Since our gross national income last year was $795 billion, 10% would be $79.5 billion, as compared with the approximately $35 billion we now spend.

The above figures are rough, of course, but they are supported by two other methods of computation. One of these is contained in the National Educational Excellence Bill which was introduced in the Senate two years ago at our request. That proposal assumed that a properly staffed school would cost an average of $1,600 per pupil per year. This cost, spread over the number of children of school age, comes to approximately $80 billion. Our estimates are further supported by the soon-to-be-released report of the National Educational Finance Project of the U. S. Office of Education. Although the Commission's conclusions were reached by a

different route than that which we used, they put the nation's educational needs at about double what we are now spending.

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In my testimony to Senator Mondale, I suggested a general strategy

1. Each state would establish a state educational fund to be

supported by:

(a) A 20-mill property tax based on state property assessing
procedures audited by the U. S. Treasury Department.

(b) A permissive education surtax on the Federal income tax.
The surtax would be paid to the Treasury Department by the tax-
payer along with his U. S. income tax bill. The Treasury Depart-
ment would then refund such revenue to the state educational fund.
(c) A minimum additional amount to be raised from other tax sources,
which would vary with the state's taxable wealth and income.

(d) Federal aid distributed to the states so as to make up the
difference between the amounts raised by state effort and $1,600
per child.

2. States would be required to present to the U. S. Office of Education a plan for distribution of educational funds to local districts in accordance with the educational need of the district.

Educational

need would be determined by means of a sociological index which would take into account such factors as per capita income, student mobility, student involvement in court proceedings, and other factors.

3. Local districts would be required to certify acceptable plans to their state agencies, with copies to the U. S. Office of Education, describing programs for intensive education for hard-to-educate children.

4.

Local districts would be required to comply with Federal laws and court decisions relating to integration and civil rights.

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The question then arises: How will the Federal government participate in the national educational effort?

We have studied the proposal of the Administration in regard to "revenue sharing." Before commenting on them in detail, I wish to make the observation that the effect of these proposals has been detrimental to many school systems -- even disastrous to some. Instead of conferring with leaders of Congress or interested organizations; instead of following the excellent recommendations of past educational task forces; the President dumped his so-called revenue sharing proposals into the public domain with the maximum possible publicity. It appeared to many Governors and state legislators that the President was offering "free money." The effect was to inhibit state effort. After all, why should a Governor or a state legislature accept the political liability of raising more money if the Federal government is willing to give it to them with no strings attached?

The costs of education due to inflation and increased enrollments have continued to rise meanwhile, but in most cases state support has not. Since local tax resources are already near the saturation point, school systems have been forced to cut back. Thousands of teaching positions have been cut from budgets, and many school systems have been forced to shut down or drastically curtail their school years.

Revenue sharing is one of those terms, like "love", that carry with them all sorts of pleasant associations, but which are extremely difficult to define.

The original proposal by Economist Walter Heller meant simply that the Federal government would return a fixed percentage of its income

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to the states. The states would use this money to supplant the more regressive property and sales taxes on which most of them rely. In order to make the arithmetic work out so that the total amount of governmental expenditure is not reduced, Federal taxes would have to be greatly increased.

Obviously, there are two sides to revenue sharing: raising the money and passing it out. The Administration proposal does nothing at all about how the money would be raised and it is extremely vague about the method of passing it out.

Title I of the

In most present forms of Federal assistance Elementary and Secondary Education Act, for instance the formula for distributing Federal aid includes an "equalization factor." That is, poorer states receive more aid per capita than the wealthy ones. Equalization factors in aid programs, whether Federal aid programs to states or state aid programs to local communities, have been the subject of legislative jockeying for many decades. There is nothing in the Administration proposals that I have seen which comes to grips with the equalization problem.

So far as education is concerned, the Administration is proposing "special revenue sharing and general revenue sharing." Special revenue sharing is really fund or grant consolidation. It calls for combining about three dozen present categorical aid programs into five broad block grants. The only provision for "equalization" so far as I can determine lies in the concept that each state will continue to receive in total educational aid no less than it now receives.

The AFT tends to be supportive of the fund consolidation idea. We have misgivings, however, about a feature of the proposal to allow states