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STATEMENT BY
HONORABLE ELLIOT L. RICHARDSON
SECRETARY OF HEALTH, EDUCATION, AND WELFARE

Before the
SUBCOMMITTEE ON EDUCATION
COMMITTEE ON LABOR AND PUBLIC WELFARE

UNITED STATES SÉNATE
Wednesday, October 27, 1971

10:00 AM. EDT

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Secretary Richardson will be accompanied by:

Dr. Sidney P. Marland, Jr., U.S. Commissioner of Education

Mr. Stephen Kurzman, Assistant Secretary for Legislation

Mr. Christopher Cross, Deputy Assistant Secretary for

Legislation (Education)

69-927 0 - 72 - 6

Mr. Chairman and Members of the Committee:

I am pleased to be here today to testify on s. 1669, the Education

Revenue Sharing Act.

This is the first Congressional hearing on this bill,

a measure which is of major importance to elementary and secondary education,

and of central concern to President Nixon in his efforts to reform and revitalize

the structure of government in the United States.

The Philosophy of Revenue Sharing

In his State of the Union Message last January 22, the President declared:

"The time has now come in America to reverse the flow of power and resources from the States and communities to Washington, and start power and resources flowing back from Washington to the States and communities and, more important, to the people all across America."

"The time has come for a new partnership between the Federal Govern-
ment and the States and localities--a partnership in which we entrust
the States and localities with a larger share of the Nation's responsi-
bilities, and in which we share our Federal revenues with them so
that they can meet those responsibilities."

The concept of the revenue sharing is not new: it was advocated by both

Presidential candidates in 1964 and in both major party platforms in 1968.

What is new and revolutionary is that this Administration has enunciated an

overall strategy--embracing general return of tax revenues to the States and

special revenue sharing in six areas of special national concern.

In each of

these proposals, we evoke the spirit and the substance of self-determination-

to preserve it where it exists, to strengthen it where it is weak, and to

create the conditions for its reemergence where it has disappeared.

Self-determination is the hallmark of revenue sharing. The President

has proposed general revenue sharing to correct the increasingly severe fiscal

mismatch between States and localities, faced with demands for services which

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are rapidly outpacing revenues, and the Federal Government, equipped with a

faster-growing tax base. Recipient State and local governments would be free

to apportion shared revenues among the uses they deemed to be of the highest

priority for their citizens. They would no longer be caught in the Federal

straightjacket which assumes that what's good for one State is equally bene

ficial to another.

Since approximately 40 percent of local and State revenues are now devoted

to education, it is reasonable to expect that education will receive a sub

stantial portion of general revenue income.

Special Revenue Sharing

In addition to the general revenue sharing bill, the President has proposed

six special revenue sharing bills, designed to correct the complex and often

Inefficient way Federal assistance is provided. These bills taken together

would consolidate more than one hundred existing categorical programs in all

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areas of government into six broad systems for sharing Federal revenues with

States and localities:

in education, urban and rural development, manpower,

transportation, and law enforcement.

But the goal is not the mere simplification of Federal organization charts.

The goal is twofold. First, consolidation is critically needed to free the

States and localities from strangulation by the bureaucratic red tape required

by the scores of individual programs.

In spite of similarities among related

programs in goals, grantees and ultimate beneficiaries, each program has its

own regulations, application forms, reporting requirements, and in many cases

its own State plan. Second, special revenue sharing will give the States and localities greater freedom than they now have, to determine their own priorities

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within broad program areas and to decide how best to meet those priorities.

In this respect, special revenue sharing will accomplish a dramatic reversal

of the long-term trend toward an ever greater concentration of decision-making

power in Washington.

Although most of the national debate so far has focused primarily on

general revenue sharing, I believe that special revenue sharing will have an

equally significant long-range impact on the Nation. While general revenue

sharing offers the prospect of substantially reducing pressures on State and

local tax bases, special revenue sharing offers a new mechanism for Federal

State collaboration in matters of mutual concern.

Reform and revitalization

of the federal system will not be accomplished by money alone; the funds must

also be accompanied by reform of the decision-making process to restore the

authority of State and local governments--and this is precisely what special

revenue sharing is designed to accomplish.

Education Revenue Sharing

S. 1669, the Education Revenue Sharing bill before the Subcommittee today,

exemplifies this strategy of governmental reform.

It would redefine the

Federal role in elementary and secondary education, a redefinition which has

become more necessary with the passage of each new categorical program. By

delineating broad areas of Federal concern, education revenue sharing would

assure that national priorities continue to be met.

1.

Extraordinary Growth of Categorical Programs

Over the past half century there has been a growing trend toward ever

narrower categories of Federal assistance to elementary and secondary education. concern for strengthened curricula in science, mathematics, and foreign languages,

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The categorical approach dates back to 1917 and the Smith-Hughes Act, the first

vocational education legislation.

In 1958 the National Defense Education Act

continued and expanded this pattern for Federal aid.

In response to national

the NDEA established a series of programs designed to encourage more young

people to pursue studies and acquire skills in fields considered vital to the

national defense.

In subsequent years, a broader range of national educational

needs was identified, and Congress passed in rapid succession a series of laws

providing special help for the disadvantaged, for the handicapped, to train

more teachers, to modernize vocational and technical education, and to provide

more books, equipment, and technology.

Clearly, these programs have had a profound impact on America's educa

tional system.

But there is a serious question as to how many more categories

can be added to the existing structure without swamping it completely. The

Office of Education now administers more than 100 categorical programs.

To

complicate the picture even further, at least 26 Federal agencies also administer

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significant categorical programs affecting schools and colleges.

2.

State and Local Governments' Problems Under the Categorical Maze

Seen from ground level, the jungle of Federal guidelines, regulations,

application forms, and evaluation requirements is almost impenetrable. In

order to mount a comprehensive program for disadvantaged children, for

example, a local school superintendent finds himself facing the necessity

of simultaneously seeking program funds under title I of the Elementary and

Secondary Education Act, books under title II, and counseling under title III.

In addition, he may seek assistance through special programs under the Educa

tion for the Handicapped Act, or purchase equipment under title III of NDEA,

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