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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 SENATE

Wednesday, October 27, 1971
10:00 AM. EDT

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 - 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 Government and the States and localities--a partnership in which we entrust the States and localities with a larger share of the Nation's responsibilities, 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 beneficial 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 substantial 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 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 FederalState 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 evernarrower categories of Federal assistance to elementary and secondary education.

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 concern for strengthened curricula in science, mathematics, and foreign languag 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 educational 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 administ significant categorical programs affecting schools and colleges.

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

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