SCHOOL ASSISTANCE IN FEDERALLY AFFECTED AREAS

Justification

This withdrawal of funds is one of several actions proposed by the President to provide for more equitable payments under the impact aid program. Accordingly, a rescission of appropriations under section 1012 of the Impoundment Control Act (Public Law 93-344) is proposed. In order to fund in this manner, specific changes in appropriation language would have to be enacted.

Payments for "a" children

Of the $14,683,083 proposed for rescission, $13,202,219 reflects the difference between administration estimates and higher congressional estimates used to determine the required funding levels for tiers I and II. This portion of the proposed rescission does not reflect a reduction in commitment levels and no programmatic impact is anticipated.

The remaining $1,480,864 proposed for rescission would, under the appropriation, provide payments for children residing in low-rent public housing whose parents are employed on Federal property or are serving in the uniformed services. Although these children have been counted for entitlement purposes in the past, payments have never been made for them. The administration proposes to continue nonpayment for this category, believing that low-rent public housing provisions change the nature of the program to that of a partially categorical program, thus deviating from the intent of Public Law 81-874. Furthermore, many children eligible under public housing provisions are also eligible for Federal assistance under title I of the Elementary and Secondary Education Act, resulting in further inequities in a program already characterized by substantial inequity. If the proposed rescission is enacted, these children will continue to qualify for eligibility purposes, but no payments will be made on their account. Payments for "b" children

The parents of "b" children live in the community while working on Federal property thus, paying property taxes which support local schools. In addition, their presence is generally an economic asset to the community. For these reasons the administration proposes that State and local governments assume a greater responsibility for "b" children and that $98,137,394 be rescinded. If the rescission is approved, payments to school districts for "b" children would continue at a normal rate of 50 percent of entitlement until January 1, 1976. For the remainder of fiscal year 1976, payments would be based on 50 percent of entitlement less an amount equal to 22 percent of the school district's total operating expenses in the prior year. After January 1, 1976, approximately 4,300 school districts would receive reduced payments for "b" children. However, no school district would lose more than 22 percent of its total operating budget for the previous school year.

Another $26,213,790 proposed for rescission reflects the difference between administration estimates and higher congressional estimates used to determine the required funding levels for tiers I and II. This portion of the rescission does not reflect a reduction in commitment levels and no programmatic impact is anticipated.

The remaining $56,342,487 proposed for rescission would, under the appropriation, provide payments for children residing in low-rent public housing or for children whose parents are employed on such projects. Although these children have been counted for entitlement purposes in the past, they have never received payment. The administration proposes to continue nonpayment for this category believing that low-rent public housing provisions change the nature of the program thus deviating from the intent of Public Law 81-874. Furthermore, many children eligible under public housing provisions are also eligible for Federal assistance under title I of the Elementary and Secondary Education Act, resulting in further inequities in a program already characterized by substantial inequity. If the proposed rescission is enacted, these children will continue to qualify for eligibility purposes, but no payments would be made on their account. Special provisions

Of the $4,591,698 proposed for rescission, $91,698 reflects the difference between administration estimates and higher congressional estimates used to determine the required funding levels for tiers I and II. This portion of the rescission does not reflect a change in the intent of the appropriation, and no programmatic impact is anticipated.

63-250-75- -4

The remaining $4,500,000 proposed for rescission would result in a program level that would allow payments to school districts to be based on 50 percent of entitlement less an amount equal to 22 percent of total operating expenses in the prior year.

An undetermined number of school districts would receive the reduced payments. However, no school district would lose more than 21⁄2 percent of its total operating budget for the previous school year.

Savings provisions

The proposed $11 million rescission would eliminate "hold harmless" payments to school districts which no longer qualify for their previous payment levels due to (1) the closing of military installations or (2) the elimination in Public Law 93-380 of out-of-State and out-of-county "b" children from the entitlement base used to determine payments. These payments are inequitable because they are not based on the entitlement criteria that apply to all other payments. The payments provide aid to school districts for children who are not using the school district's services.

Construction

This program provides assistance for construction of school facilities in school districts affected by Federal activity. The proposed rescission level of $10 million would maintain the 1976 request level of $10 million. This amount would provide funding to cover the areas of critical need. The amount proposed for rescission would provide up to $4 million in repairs and maintenance to school facilities on Federal property, $2,850,000 for construction assistance to local education agencies, and $3,150,000 for schools constructed on Indian land.

EDUCATION FOR THE HANDICAPPED

Appropriations under this head for the fiscal year 1976 rescinded in the following amounts: $35 million for part B of the Education of the Handicapped Act, which was to be available from July 1, 1976, through September 30, 1977; $750,000 for specific learning disabilities; and $625,000 for special education manpower development.

This withdrawal of funds is one of several special actions proposed by the President to restrain 1976 and 1977 budget outlays. Accordingly, a rescission of appropriations under section 1012 of the Impoundment Control Act (Public Law 93-344) is proposed.

State grant program

The rescission of $35 million would result in a funding level of $75 million for this program in fiscal year 1977. This is an increase of $25 million over the President's original budget request. A rescission of $35 million for this program would reduce the number of children served in school year 1976-77 from 406,000 to 285,000, a difference of 121,000 children.

The primary responsibility for providing basic educational services to handicapped children rests with State and local governments, which spend several billion dollars annually on such services. Federal expenditures in special education comprise a very small percentage of the total. A rescission of $35 million in this program, therefore, will have only a slight overall effect on direct services. This rescission assumes that the proposed level of $75 million will fulfill the Federal role of improving the capacity of the educational system to serve handi

capped children through demonstration, research, and training activities. Significant budget increases for such activities were requested and appropriated for fiscal year 1976.

Of the $100 million appropriated for fiscal year 1975, almost $70 million was not used in that year but was carried over for use in fiscal year 1976. The experience of fiscal year 1975 indicates that the States will most likely not be able to spend the majority of their fiscal year 1976 appropriation during that year, and will have an even larger portion of these funds available for their use in fiscal year 1977. This large reserve of funds available to the States for obligation will significantly reduce the programmatic effects of a rescission.

Specific learning disabilities

The proposed rescission of $750,000 maintains the President's original 1976 budget estimate of $4,250,000, which is an increase of nearly 30 percent over the 1975 appropriation. The funds proposed for rescission would support 6 projects, reducing the number of awards from 40 to 34. These six projects would be part of a program piloting a multidisciplinary approach to educating learning disabled children. Already included in the President's 1976 budget estimate were funds for several such projects, which would adequately support a pilot program. Special education manpower development

The proposed rescission of $625,000 would hold the program at the 1976 original budget estimate of $39,750,000. This is an increase of $2,050,000 over the 1975 appropriated level. The budget estimate of $39,750,000 would directly serve 35,123 persons through 653 projects. The funds proposed for rescission would support an additional 10 new projects, directly supporting approximately 195 students in preservice programs.

OCCUPATIONAL, VOCATIONAL, AND ADULT EDUCATION

Appropriations under this head for the fiscal year 1976 are rescinded in the following amounts: $250,000 for part D and $9,990,950 for part F of the Education Professions Development Act and $4 million for the Adult Education Act which was to be available from July 1, 1976, through September 30, 1977.

This withdrawal of funds is one of several special actions proposed by the President to restrain 1976 and 1977 budget outlays. Accordingly, a rescission of appropriations under section 1012 of the Impoundment Control Act (Public Law 93-344) is proposed.

Vocational personnel training (Education Professions Development Act, part F) This categorical program provides support to assist States and local education agencies and institutions of higher education in their efforts to recruit and train individuals in the areas of career and vocational education. An amount of $9,050 has already been obligated during fiscal year 1976. The proposed rescission of $9,990,950 would terminate further Federal support, which would, under the appropriation, have gone to approximately 30 institutions and, through them, to approximately 55,000 individuals. The rescission is proposed because other Federal sources of support are available to the institutions and the individuals. Institutions are eligible for alternate funding through vocational edu

cation basic grants. General support is available under the higher education student assistance programs for those who wish to pursue careers in vocational education.

Elementary and secondary training (Education Professions Development Act, part D)

The proposed rescission of $250,000 will maintain the program for training elementary and secondary education teachers at the level of $5,212,000 proposed in the 1976 budget. There are alternate sources of funding for training the 200 additional teachers that could have been funded by the amount proposed for rescission. Additional financial assistance for the training of teachers is available through general student support under the higher education and Indian education programs.

Adult education

The proposed rescission of $4 million to be used in 1977 would maintain, at the 1975 and 1976 level, a basic level of support by the Federal Government for programs aimed at ending illiteracy among U.S. adults. This basic level could be augmented by the States as they deemed necessary. The appropriated level would either increase support levels from $76 to $81 per participant or would expand Federal support to cover as many as 41,900 additional participants.

HIGHER EDUCATION

Appropriations under this head for fiscal year 1976 are rescinded in the amount of $768,139,840 of which $240,093,000 is from the appropriation for supplemental educational opportunity grants and $23,721,840 is from the appropriation for veterans cost of instruction.

Notwithstanding the provisions of title IV, section 411 (b) (4) of Higher Education Act of 1965, payments may be made under subpart 1 of part A of title IV out of the amount appropriated from that subpart for the fiscal year ending June 30, 1976.

This withdrawal of funds is one of several special actions proposed by the President to restrain 1975 and 1976 budget outlays. Accordingly, a rescission of appropriations under section 1012 of the Impoundment Control Act (Public Law 93-344) is proposed.

Supplemental educational opportunity grants

This program provides-to students of exceptional financial need-grants which must be matched by higher education institutions. The proposed rescission would terminate funding of this program. The proposal has two bases. First, significant

scholarship support is being provided under the basic opportunity grant program which provides a more equitable basis for assisting needy students. Second, additional Federal support has increased scholarship assistance available at the State level through the State student incentive grant program. The amount proposed for rescission would provide 242,000 new awards and 203,000 continuing awards.

Work-study

This Federal program supplements that of the private sector which provides more than $5 billion per year in student employment. It pays 80 percent towards the earnings of needy students employed at eligible jobs. The proposed rescission of $140 million would balance the funding for this program in relation to other components of an integrated Federal approach to student assistance. After the proposed rescission of $140 million, $250 million would remain available to support work-study employment. This amount would provide jobs during academic year 1976-77 averaging $525 for 574,000 students as compared to 895,000 students under the full appropriation, a reduction of 321,000 jobs.

Direct loans

This program provides long-term, low-interest loans to needy students through Federal capital contributions to institutional student loan revolving funds. It is estimated that approximately $3 billion in student loans are now in institutional revolving funds of which approximately $228 million will be available for relending without additional Federal capital contributions. These funds would provide average loans of $500 to 456,000 students. Further, the 1976 budget estimates that $1.6 billion in private student loans will be generated by the guaranteed student loan program. Because of the availability of these other student loan resources, a rescission of the $322,500,000 in additional Federal capital contributions and loans to institutions is proposed. This program has artificially low interest rates, compared to the guaranteed student loan program. Further, there is no national needs test to determine eligibility for these highly subsidized loans.

The proposed rescission would eliminate appropriations for further funding of Federal capital contributions to institutional revolving funds and eliminate $1,500,000 in loans to institutions. This would be more than offset by the $1.6 billion in private student loans generated by the guaranteed student loan program. The rescission would forestall loans averaging $690 to an additional 378,000 students. Funds appropriated for teacher cancellations ($8,960,000) and $500,000 already obligated for loans to institutions are not proposed for rescission. Language training and area studies

Over the past 17 years, the language training program has helped establish more than 100 foreign language and area studies centers. Today, more than 90 percent of the funding for the centers comes from universities and external sources. The proposed rescission of $4,660,000 is based on a diminished need for Federal support. It is estimated that training centers receiving Federal funds would number 50 rather than 76 at the appropriated level. Also, the number of research and exemplary projects would be 47, rather than 80 and the number of fellowships would be 600 rather than 798.

The Fulbright-Hays program would also be reduced from the appropriated level of $2,700,000 to $1,360,000. At the level remaining after rescission, 114 fellowships could be supported, rather than 180 at the appropriated level; 5 group projects, rather than 25; and 12 foreign curriculum consultants, rather than 20.

University community services

This program provides grants to States to aid college and university programs which assist in the solution of community problems. This program has not proved to be effective. The rescission proposal would terminate it. The marginal activities that would be supported by the funds proposed for rescission are more properly a matter of State and local concern. The $600,000 remaining available after the rescission would provide half-year administrative support to State agencies administering the program. These agencies would, thereby, have sufficient time to either find alternative funding in order to continue the program or to redeploy their personnel to other State functions.