In addition, VISTA volunteers are not eligible for unemployment compensation on completion of service. The stipend provides departing volunteers with an average of $468 (after taxes are withheld), the equivalent of four to six weeks of unemployment compensation. In 1975 the Congress passed an authorization for an increase to $75 per month of service, provided an appropriation was specifically enacted for this purpose. Such an increase will give volunteers, after taxes, the equivalent of seven to eight weeks of unemployment compensation for after-service readjustment purposes as provided in the authorization. (A note of comparison: in the last year the Peace Corps readjustment allowance was raised from $75 to $125 per month, a 67% increase). increase would become effective as of May 1, 1978. This Food and Lodging Allowance VISTA volunteers receive, for their personal support, a $75 monthly living allowance and a food and lodging allowance that varies according to local living costs but averages $209 per month (both are subject to taxes). For the past several years, ACTION has increased the food and lodging allowance for VISTA volunteers whenever there has been at least a 5% increase in the Consumer Price Index (CPI). The last increase of 7% was funded, effective October 1, 1976, from $700 thousand which Congress appropriated above and beyond the Administration's requested total for VISTA. It was determined that by November 1977, an additional 6.2% increase was necessary. This increase was implemented as of November 13, THURSDAY, FEBRUARY 16, 1978. CORPORATION FOR PUBLIC BROADCASTING WITNESSES HENRY LOOMIS, PRESIDENT JAMES B. CARDWELL, VICE PRESIDENT FOR FINANCE AND TREASURER Mr. FLOOD. We will take up next the Corporation for Public Broadcasting, 1978 supplemental. Your statement will be put into the record. [The information referred to follows:] STATEMENT OF HENRY LOOMIS Mr. Chairman, Members of the Committee. Our first statement deals with a request for a Supplemental appropriation for 1978 of $12.05 million which the President has included in his 1979 budget. At the time you considered CPB's appropriation for 1978, we asked that the full authorized ceiling of $121 million be appropriated since we were certain that public broadcasting would raise the necessary non-federal funds to meet the matching requirements of the statute. Instead, Congress approved $107.15 million with a statement made during the mark-up of the bill that Congress would look favorably upon a supplemental if public broadcasting could raise the necessary non-federal funds. Last summer we requested an additional $12.05 million from the Office of Management and Budget for 1978 since at that time we were able to certify $298 million in non-federal funds as having been raised in 1976, the matching year. This was an increase of about $30 million in non-federal matching funds over the amount on which the existing 1978 federal appropriation was based. When applied at the statutory matching rate of one federal dollar to every two and one-half non-federal dollars, this increase of about $30 million in matching funds justifies an additional $12.05 million bringing the total 1978 appropriation to $119.2 million. Mr. Chairman, what was a goal at the time Congress approved the 1978 appropriation has now turned into a reality. In other words, the higher level of matching funds predicted in our original 1978 estimate has been realized. It has also been recognized by the President and the additional federal appropriation required to meet the match has been included as a 1978 supplemental in the President's budget submission for 1979. The next step is to obtain Congressional approval of the full level of 1978 appropriations that is authorized under the statute to match the $298 million in non-federal funds that has now been certified. That is what this supplemental appropriation of $12.05 million would do. The $12.05 million will be allocated as follows: $7 million, 58% of the request, will be allocated to the support of local stations primarily through Community Service Grants. This will mean an average increase in CSG's of 10% above the already awarded 1978 CSG's. It will allow for more funds to be allocated to programing and other important station priorities. About $3.5 million, 30% of the request will be allocated to TV and radio programing support. With the pending start-up of the TV satellite system these funds will be of great benefit in increasing the supply of programs for national distribution. In radio, it will mean the production and acquisition of additional hours of programing by National Public Radio. About $1.5 million, 12% of the request will be set aside for use in the construction of a radio satellite interconnection system. This system, which for the first time will allow for a truly national interconnection public radio system, is to be jointly funded by the stations and CPB. These funds will assist CPB in raising the necessary capital. Mr. Chairman, let me point out that none of the funds in this request are earmarked for either CPB administrative expenses, or for that matter, such activities as training, research, information systems, etc. While a case could be made to increase funds for some of these budgets, particularly training, we feel it more important to increase support for CPB's two most important priorities-local station support and national programing. In summary, Mr. Chairman, by providing for this supplemental request you have emphasized the importance of letting the match run its full course. By letting the match run, public broadcasting stations have the incentive to seek even higher amounts of non-federal financial support and can continue to provide the high quality of services which the American public has come to expect. I will be glad to answer any questions you may have. USE OF SUPPLEMENTAL FUNDS Mr. FLOOD. The supplemental budget of $12,050,000 will be used for new programs or for existing programs? Mr. LOOMIS. It will be used for expanding existing programs except for the $1.5 million which we would be putting in escrow for the radio satellite, in the sense that 58 percent of it would go directly to the stations. The rest would go $2.5 million to television for more programs― whether you call that new or old is a matter of definition—and a million dollars of it to radio for new programs or for additional programs. URGENCY OF REQUEST Mr. FLOOD. Is there some urgency for these supplemental funds? Suppose this supplemental appropriation was delayed say until August, what would happen? Mr. LOOMIS. The real problem we have this year Mr. FLOOD. What would happen, say, in August? Mr. LOOMIS. In August, if we knew for sure it was coming in August, then you could do the planning. Mr. FLOOD. I want to ask you this: Let's go a step further, suppose that the supplemental appropriations bill is not enacted at all, then what would happen? Mr. LOOMIS. What happens is, we continue at the rate we are now at, which is significantly less than last year because last year was $103 million, this year is $107 million; as you are well aware, inflation is more than the difference. NON-FEDERAL MATCHING Mr. FLOOD. You indicate now that you have matching funds sufficient to support the supplemental request. Mr. LOOMIS. That is correct. Mr. FLOOD. Are there any excess matching funds for fiscal year 1978? Mr. LOOMIS. No, that is precisely where we match. That is where the figure came from. The authorization was $121 million, we could not quite match the whole authorization. Mr. FLOOD. Insert a statement in the record showing the sources of the non-Federal matching funds and the amounts for each for the fiscal year 1976. Mr. LOOMIS. All right, sir. [The information referred to follows:] SOURCES OF NON-FEDERAL MATCHING FUNDS FISCAL YEAR 1976 In 1976, non-Federal income for public broadcasting was $298 million (72.3 percent of all income raised that year). The sources and amounts are listed below: 1 All others include income from other (private) colleges and universities, interest, profit, funding organizations (est. for public television), rentals, guide advertisement, program sale, miscellaneous others, unidentified others. RADIO SATELLITE Mr. FLOOD. About $1.5 million of the supplemental request is for support activities in this radio satellite communications system we were talking about. Why do you want to use part of the supplemental budget for that system? Mr. LOOMIS. Our problem again is a cash flow problem. What we are hoping to do is raise capital from within the system, so that we will not have to expand our line of credit with the bank. Mr. FLOOD. How much is that system going to cost in total? Mr. FLOOD. When will it be in operation? Mr. LOOMIS. We expect to start construction this fall. We are in the advance planning stage. The radio stations feel so strongly about this that they have had a unanimous vote and escrowed a whole year's CSG's, $5.4 million, that we are keeping for them. SATELLITE FINANCING ARRANGEMENTS Mr. MICHEL. With respect to your financing arrangement for the satellite, the Corporation for Public Broadcasting has to keep a certain amount in noninterest-bearing accounts, does it not? Mr. LOOMIS. 10 percent of the declining line of credit. Mr. LOOMIS. Line of credit. Mr. MICHEL. Has to be kept on deposit in noninterest-bearing accounts? Mr. LOOMIS. That is correct, plus an additional 10 percent of any we actually draw down. Mr. MICHEL. What does that reflect itself in over a period? Mr. CARDWELL. I gave the figure over the full life earlier today. That includes some other related expenses, taxes which would have to be paid. We will give you a more precise figure for the record. Mr. LOOMIS. It is about $12 million. Mr. CARDWELL. Yes. FINANCIAL OBLIGATION OF CPB RESERVES Mr. MICHEL. Let me go at this supplemental in a little different way. I look again at your financial statement for that 15-month period ending September 30 of 1977. There is something like $23 million of assets, of which $15 million was planned for certain uses. Then I see $8 million—which is apparently not earmarked for anything. In the first place, I would like to know how you spent that $15 million? Then secondly, what are your plans for the $8 million that is not planned for any specific uses? Here you are today asking for a supplemental, and I say how come? Maybe it is not all that urgent. Mr. LOOMIS. I think the short answer is that one is a savings account, and the other is a checking account. This, what you are talking about here, is the savings account. To use that up you would have no savings left for a rainy day. Let me go through that $15 million. $6.5 million of that is not ours, it is the radio station's CSGs, which they voted not to take as an annual appropriation, but to put this into escrow to pay a share of the satellite cost. We are just holding it for them. It appears on our books because it is in our bank account, but it is not our money. If the radio satellite does not fly, that $6.5 million goes back to the radio stations. Mr. MICHEL. In the same distribution as contributed? Mr. LOOMIS. Yes. Then we have another almost $1 million that is about to be paid by us into the television satellite. It is part of our payment into it. It just has not been done yet. It is another escrow account. Then we have about $7.7 million that is ear-marked but had not been obligated in the financial sense; about half of that is already done. This is particularly true of things like the television production, where you make an agreement to, fund if they can get other funders and if we can get to a contract. So we have to put the money aside, we cannot invite two girls to the dance, so we have to put it to one side. If and when we do not get a deal, then it goes back into the pot. If we do get a deal, then it becomes obligated and it is gone. Mr. MICHEL. Could you be more specific and set it out in the record? Mr. LOOMIS. I have it right here. Mr. MICHEL. Put it into the record, if you will. Mr. LOOMIS. Yes. [The information referred to follows:] |