think that is good. I think we should get our heads together with the people who are the beneficiaries of these programs and with the leaders in the Congress and get something worked out whereby this can be scaled off gradually.

I think this can be done. This money is going to be restored by the Congress. We have done it every year. That is the answer I am giving my constituents when I write to them. You know Mr. Fogarty is going to put it back and Senator Hill will, too.

FUNDS FOR ALABAMA AND RHODE ISLAND

Senator HILL. How much will the title I funds contribute to the average community which receives impacted area funds, thereby resulting in a loss of these funds?

Mr. CARDWELL. It varies from community to community. In the entire State of Alabama, for example, school districts would under the impacted area aid program receive about $7.3 million with full entitlement. Under the budget proposal this support would go down to about $1 million.

Senator HILL. It is a pretty substantial reduction.

Senator PASTORE. Wait until he gets to Rhode Island. He will crucify us.

Mr. CARDWELL. Under title I in 1967, Alabama is estimated to receive in the same school districts about $17 million.

Senator HILL. Those same school districts?

Mr. CARDWELL. Yes.

Senator HILL. Under title I?

Mr. CARDWELL. Yes. In the case of Rhode Island, school districts. would be intitled to $3 million in impacted area aid. This would be $1.5 million under the budget proposal, but under title I the same school districts in Rhode Island should get about $4 million.

Senator HILL. Four instead of the three they are now getting? Mr. CARDWELL. They would get $4 million in addition to the impacted area funds.

Senator HILL. What do you have on Colorado?

Senator ALLOTT. I have the figures on Colorado. I don't want to interrupt Senator Pastore.

Senator PASTORE. I merely want to say that I don't think that we have explained this specifically enough. Are you actually saying to me that a school district which is now entitled to, let us say, $500,000 in Rhode Island, no matter where that school district is, has this benefit under the impacted area fund for the simple reason that you come in with a great influx of schoolchildren because of a military installation? Are you telling me under title I that same school district is going to get 150 percent more money?

Mr. CARDWELL. No, sir; I am saying the same school districts overall will receive more assistance under title I.

Senator PASTORE. If you have, let us say, an affluent community, affluent in the sense that it is rural, it is suburban and more or less, say, a bedroom location for industrial centers and this is adjacent, let us say, to a military installation, let us say East Greenwich. They receive a dollars through the impacted area which is dependent upon a number of military personnel.

If their level of income is of a certain level, it may well be they are not entitled to this money under title I. They might be excluded. Am I right or wrong?

In other words, they are not putting money in the same places. It is a different kind of program. The two cannot be assimilated. It is true that a certain amount of money comes into a State, but now I am talking about the parochial community-the communities which had been depending upon this money for a specific program. Now, you come along and say you have a larger entitlement under another program but it works out in a different formula.

This title I is to help those localities that cannot help themselves because they have poor families and you are trying to help those communities to help these children that come from poor families. It is a different formula. It is an entirely different formula.

GAPS IN IMPACTED AREA PROGRAM

I don't think you can make the argument we are going to be better off. We are going to be better off overall, but you do not fill in the gaps specifically that are being created by the removal of these funds from the impacted areas.

Mr. GARDNER. The gaps which exist will exist in those communities best able to pay for them. It is true that not all communities will have a cushion as the result of title I, but the communities that do have that cushion will be precisely the communities that need it most. Senator PASTORE. Eventually all these people will have to assume the responsibility themselves if that is the policy of the Government. Thus far, it has not been the policy of the administration and the Congress. That has been the policy of the administration. And all I am saying is that we ought to get our heads together and work this thing out in such a way that we can phase it out without doing irreparable harm to some of these communities. You just do not go out and raise $100 million in some of these small communities.

TITLE I GRANTS REQUIRE STATE ACTION

Mr. CARDWELL. I would like to emphasize that the data we furnished you on title I is in the form of entitlement. It would be up to the local school districts and the State to take advantage of the allocation under the law. There is no guarantee that they will receive. the allocation.

Senator HILL. You might amplify that a little bit. For the record, would you state what you mean by that?

Mr. CARDWELL. Under title I there is a formula from which we derive the maximum amount each school district may receive. Individual districts then file a plan with the State department of education, which approves individual projects proposed by local school districts up to the amount they are eligible to receive. This amount is based on the number of schoolchildren in the school district whose families have an annual income of $2,000 a year or less.

Senator HILL. Senator Allott.

Senator ALLOTT. First of all, I want to associate myself with Senator Pastore's remarks. I will have to leave for another hearing shortly.

PUBLIC LAW 874 FUNDS FOR COLORADO

In Colorado, under Public Law 874, we would get in fiscal year 1967 $11,534,000. If your proposed budget were adopted, that would drop to $4,830,000, or a difference of $6.705 million.

Mr. CARDWELL. That is correct.

Senator ALLOTT. I, of course, have heard from many people in Colorado. There are 62 districts.

I want to point out two things. As Senator Pastore pointed out, your analogy is not compatible because your title I funds, as I understand it, have to go into new programs; is that correct?

Mr. COHEN. That is correct.

Senator ALLOTT. Therefore, they are not compatible when we say we are putting a million dollars more into Alabama or Colorado or any State. You are not talking about the same things.

I want to give you some figures here. Your overall cut under Public Law 874 amounts to about 56 percent, Mr. Secretary. I had one school district come in and speak with me, and I happen to have figures on this school district.

In Colorado, we have a very hard real estate assessment of 30 per cent. In other words, our taxes are based upon 30 percent of the actual valuation of the property, and it is a very hard valuation based on real estate prices and exchanges.

We tax ourselves on an average, if my recollection is correct, around 3411⁄2 mills for our public schools, not counting our colleges.

This, I think, places us in about the upper 10 percent as far as tax collecting and levying in the United States is concerned so that I think, by any reasonable standards, it can be assumed that the people of Colorado are doing their best to take care of their school situation.

WIDEFIELD SCHOOL DISTRICT, SECURITY, COLO.

The Widefield School District at Security, Colo., is just south of Colorado Springs. It involves Fort Carson, or a good many people associated with Fort Carson, Ent, NORAD, and other defense agencies in and around Colorado Springs.

Their total mill levy today for education in this district is 42.31 mills. If this district were cut on the same basis as your overall cuts, they project that for the purposes for which they are now conducting their schools, with no expansion of school facilities, this one district. would have to tax itself to 71.81 mills just to sustain what they have. Now, I know this area very well, I am personally acquainted with it. This is not an area of affluence. This is homes of $10,000, $15,000, and a $20,000 home would be an unusual home. It is a relatively new community. Tax valuation is based on the actual sales there so we know there is no skulduggery going on there in the assessor's office or anywhere else.

Now, these people simply cannot afford to tax themselves to the extent of 71.81 mills for the support of their schools.

If, as the Senator from Rhode Island suggests, it is Congress' intention to phase this out, Congress and the administration, I don't see how you phase it out and give these people a chance to adjust in less than a period of 5 years, and I would say probably it is going to require 10 to phase them out.

Very frankly, if this goes through, the people who have been in my office, both the school officials and the county officials who are very concerned about this, say they have several choices, one of which is to cut down the hours of school each day and foreshorten their school facilities. One would be to simply say to the people who are associated with the military, "You take care of your children." They would have to say that to 5,000 personnel at the Air Force Academy. Roughly, they would have to say to the Air Force Academy, "You take care of your kids because we no longer can do it."

SENATOR ALLOTT'S POSITION

I just don't think, despite the Stanford research study, there is any practical way of doing this and, frankly, I can see no solution. I can see no solution for our 62 districts in Colorado if this cut is sustained. I want to make my own position on it very clear. I shall do everything I can to see that the moneys are reinstated because I can see no way out of it for these people. When we tax ourselves in the very highest bracket in this country to support our schools-and we are taxed pretty well-I don't see how we can sustain a cut like this.

I want to thank the chairman. There are other matters that later I want to talk to the Secretary about.

STATEMENT BY SENATOR COTTON

Senator HILL, Senator Cotton.

Senator COTTON. Yes, I would like to make a preliminary statement. In the first place, back before the formation of the present Department when this impacted area system was first devised, I was politically foolish enough to antagonize many of the school people in my State by saying precisely what you have evidently learned from the study made by Stanford.

I spoke then and in the House Appropriations Committee I voted to hold down the impacted area assistance, because in my own Stateand I am sure it is true in others-chambers of commerce, local civic organizations-everybody would come down, cry for an airbase, and other Federal installations. They wanted to get them into their towns to furnish employment. But as soon as they obtained them they came down promptly and wanted aid for their schools because of the increased population.

I thought at that time and said so and nearly lost my political head for saying exactly what at this late date you come in with this study. However, no, no, under the great conception of helping people, the Federal Government being a Christmas tree, everybody voted for the aid to the impacted areas and they went the full way.

Now, the situation has changed. It has changed in this respect. The impacted area funds-are among the few Federal funds that go straight into the districts without strings attached and can be used for whatever the pressing need is in that district, whether it is teacher's salaries, more teachers, more buildings, whatever the need in that community is.

Now, repeatedly, year after year, I voted against various Federal aid to education bills. I voted against them because I could not see my way clear to support them. I wanted Federal aid to education but I wanted it to go into the districts with no strings attached.

I recall very clearly that each time we had a Federal aid bill up before the Congress, people working for the bill always came up on my blind side, as I am sure they did with others, and said, "You are not going to get your aid for impacted areas unless you pass this bill, because you are not going to get it separately this year.'

When the bill did not pass, I remember one session in the very last week, almost the closing hours of the session, by dint of a tremendous effort on the part of some Senators-I am sure the same is true on the House side we saved our impacted-area money.

This past year when the Federal aid bill came up I still had this same feeling about it. I felt, worthy as its objectives might be, the new title I benefits are earmarked and in many cases I feel they are earmarked for the fluff and the frosting of education rather than going right straight to the basic needs of education.

For that reason, I was reluctant to vote for it and expected to vote against it as I had in the past.

However, I finally decided to vote for it, one, because I had given up hope of a straight refund to States of a percentage of their direct income tax earmarked for education and not otherwise restricted.

Second, as usual, because it contained renewal of the impacted area fund.

I finally figured out that although my own State would pay more for title I than they were going to get back in title I, I did not like the risk of giving up or losing the impacted-area fund which I repeat goes directly to the districts and can be used for their more pressing needs.

I voted for this bill. Frankly, I regard it as an absolute betrayal when the first thing that happens is that the budget calls for, or the executive calls for, or you call or somebody calls for all or most of the money under title I and proceeds at this late date to chop off half of the impacted area funds on exactly the same ground that some of us talked about when impacted areas first became a fact in the Congress.

EFFECT ON NEW HAMPSHIRE

Twenty-one New Hampshire communities will be cut out entirely of impacted funds if my figures are correct; 29 more will be sharply reduced. The money coming in under title I, as the Senator from Rhode Island has so well said, will not replace them.

Furthermore, under title I, you apply the family income test.

In my State we do not have an income tax so we can have all kinds of people living in the community that have substantial incomes and pay a Federal income tax, but they do not pay 1 red cent into the local maintenance of the schools.

Our State, in distributing State funds, has a formula based on whether a community is rich or poor. In its resources our taxes come largely from real estate.

Under your formula, therefore, in title I, the four poorest school districts in the State of New Hampshire get not a cent. They are cut out entirely because it is based on the family income rather than what the resources are of the community for the support of the schools. Now, impacted area funds, whether they were wise or unwise in their inception, constitute the only direct payment into communities with freedom to use those funds where they are most needed for the fundamental needs in the schools.