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from the study, and the awareness we are gaining as individuals, is something that exists out in the States.

They are not deaf to this information. They are hearing it, and they want to do something about it, and I think the most important thing we can do is to provide the assistance to the States on an equalizing basis between the states and let them take care of the equalization within their State.

That is my view.
Chairman PERKINS, Mr. Brademas.

Mr. BRADEMAS. I only have one other observation, Mr. Chairman, because I know our time is running out.

I do think that the administration proposal has not sufficiently taken into account this extraordinarily difficult problem of the failure of the State governments to provide adequate state aid to local elementary and secondary schools, and one has only to look at the extraordinary range of percentage among the several States, to some of which I alluded in my earlier comment, and listen to the statement of our colleague from New York, Mr. Peyser, in which he commented on Governor Rockfeller's slash of state aid to local schools, to see what I am talking about,

I think Mrs. Green was very telling in her observation that your program, Commissioner Marland, as I understood her point, will not add any new money at all to the 7 percent of the expenditures on the elementary and secondary public school level now being paid from Federal funds, but rather your proposal is only a rearranging of the delivery system as to who gets the money. I think the Commissioner has been very candid in acknowledging that this charge is true, that there is no new money being proposed here by the administration.

Now that seven percent is targeted money, and we have already seen that we are not spending that as wisely as we should. That is one reason the administration wanted its comparability proposal.

To spread that modest amount of Federal money more broadly, and not target it, and without asking for any new Federal money, seems to me to be pouring a glass of water on the Sahara. I hope we will have a discussion through th next months on this matter because it seems to me absolutely essential, if you consider the implications of the California case and other cases which in effect say that the State governments must stop discriminating against children in school districts where there is not a good deal of wealth and do something to equalize expenditures. Mr. Pucinski has in this connection very tellingly raised the issue of the possibility of a Federal sales tax, which we all know is a regressive tax, if it is not based on some ability to pay. So I do not think that we can ignore, in considering revenue sharing proposals or, indeed, any other kind of proposals that have to do with the funding of education, especially at the elementary and secondary school levels, the question of the local property tax, relationships among the State aid and the Federal dollar. So I would hope in our continuing dialogue on this matter, Mr. Secretary, and Mr. Commissioner, that we can allude to these various matters and not rule them out of bounds for discussion.

I for one do not like the idea of the Federal Government taking State governments off the hook of fiscal responsibility, and that is exactly what you are going to do if you send Federal aid out to the States, without some sort of requirement that the States maintain their own support of the schools. The final point, I suppose, I would make is this and in this respect, I am in total agreement with the Wall Street Journal's editorial position over a period of years in its opposition to revenue sharing—it seems to me the path of great danger for a federal system to have elected politicians at one level of government responsible for spending the money while elected politicians at another level of government are responsible for raising the tax dollars.

If I were a Governor, of course I would like that situation, for all I would have to do would be worry about how to spend the money, and simply wait for Uncle Sam to drop the money into the State capitol like manna from heaven.

That path seems to me to be the prescription for all kinds of dangers, and one only has to look at elected State politicians, some of them, I shall make no specific allusions, because this pertains to State politicians of both political parties, who have certainly been sharing revenues from state taxes, but among themselves. I do not want to make it any easier for that kind of thing.

I do not mind going back to my electorate, and saying, yes, I voted for these spending proposals but I also voted for the taxes. So, gentlemen, I hope you will consider that your revenue sharing ideas may be totally undermining the federal system in eroding any sense of accountability to the public, for, to repeat, you impose the taxing requirement on one level of elected politicians while you let the other politicians be responsible for taxing.

Thank you, Mr. Chairman.
Chairman PERKINS. Mr. Pucinski.

Mr. PUCINSKI. Mr. Commissioner, there is one aspect of this proposal that has been somewhat disturbing to me.

It puts a great thrust in channeling these programs through the State agency

Now, in the emergency school bill, which you worked so hard to get through the Congress, we dealt directly with the school district, the Secretary and Commissioner. In looking at some rather interesting figures and statistics, it seems to me the large cities, the 25 major cities of the country, do not fare very well when you channel these programs through State agencies.

Are you really hard and fast on that?

Commissioner MARLAND. I personally would still hold to what the Constitution has established regarding responsibilities for education in the States.

Yes, I would, and for other reasons too, Mr. Pucinski, beyond the Constitution.

The issue is one of feasibility.

The Office of Education cannot in any imaginable way serve 19,000 school districts in a direct sense.

It just would be a horrible maze of bureaucratic management.

The 50 States, we agree, vary in their competence; they vary in their expertise; they vary in their staffing. Our position is to strengthen the States, to strengthen their competence, to strengthen their

technical ability to handle this kind of a network, so that those 50 States, centering on the Office of Education, will become more responsible, more productive.

Mr. PUCINSKI. I want to thank you, and, Doctor Kurzman, and your other assistants here, for your really candid answers.

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It is always a great pleasure to have you before the committee.

You come well prepared. You know your subject. I appreciate the fact that you talk in complete candor.

I think when we get through with the testimony here, there will be no questions. We may not agree, but at least you are frank enough to take a strong

a position on these things, and I appreciate that.

Commissioner MARLAND. Thank you very much.

Mrs. GREEN. I would like to make one final comment, Mr. Chairman.

It seems to me those people who are proposing, and they are indeed advocating a shared revenue, miss an awfully important point, a point which I have never yet heard made. I do not understand why.

We have revenue sharing at the present time. The Federal Government insists on sharing the revenue from the States, and of the municipalities. Moreover, the Federal Government has been doing so for many decades; but it all comes to the Federal Government, and the Federal Government is the one that spends it. Now let's share the funds collected from the States and cities with the States and cities and also share the responsibility for decisions on how the money is spent with the States and cities. In other words, let's decentralize the decisionmaking process.

Mr. KURZMAN. That is precisely our proposal. Commissioner MARLAND. The President said: 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.

That is precisely the theme you were citing. That is what we are trying to press for. What you have just said is true, and we want to work

Chairman PERKINS. Well, let me thank both of you, Dr. Marland and Dr. Kurzman, for your appearance here this morning.

You certainly have been helpful to the Committee because we never knew, really, what the administration had in mind.

You have told the committee that you will put in another appearance as soon as you have any further suggestions for elementary and secondary education revenue sharing. I want to thank you for your appearance. Let us know when you are ready to return.

We will be available to hear you.
Thank you.

At this point I would like to insert in the record a letter addressed to Mr. Pucinski from the Honorable Robert W. Scott, Governor of North Carolina, together with the statement to which he refers.



Raleigh, N.C., December 22, 1971. Hon. ROMAN C. PUCINSKI, U.S. Representative, Chairman, General Subcommittee on Education, Rayburn

House Office Building, Washington, D.C. DEAR MR. CHAIRMAN: As Governor of the State of North Carolina and Chair. man of the Education Commission of the States, I have been concerned with the direction of Special Revenue Sharing measures under consideration by the recently adjourned first session of the ninety-second congress and which, presumably, will come before the next convening ninety-second session. S. 1669, the proposed Education Revenue Act of 1971, is a case in point.

that way.

The enclosed testimony on S. 1669 will, I think, adequately inform your Subcommittee of my convictions with regard to this measure. I take this opporunity to express my deep appreciation to you and the distinguished members of your Committee for providing for the record to remain open to receive my comments. I believe that the modifications suggested therein have validity and that if given consideration by your Committee will serve to provide the Congress and the na. tion with a more acceptable measure and a more workable ordinance after its passage.

Again, accept this expression of my gratitude both to you, Mr. Chairman, and to the members of your Committee. I have the honor to be.


Governor of North Carolina Chairman, Education Commission of the States, 1971-72. STATEMENT OF Hon. ROBERT W. Scott, GOVERNOR OF NORTH CAROLINA AND

CHAIRMAN OF THE EDUCATION COMMISSION OF THE STATES Mr. Chairman, Members of the Committee, as Chairman of the Education Commission of the States, I appreciate the opportunity this statement of S. 1669, the proposed Education Revenue Act of 1971.

The Education Commission of the States was formed by the Compact for Education in 1966, for the purpose of encouraging effective working relationships among governors, state legislators, and professional and lay people from all elements of the educational community. Forty-three states and territories are now members of ECS. We recognize the primary responsibility of state government in the field of education, and the need for imaginative and effective leadership from the states in the improvement and reform of educational policies, and the development of better means of financing education.

The potential impact of passage of revenue sharing bill for education is enormous. The decisions of the Congress on this subject and on other bills pending in the Congress to carry out the President's revenue sharing proposals will determine the fundamental relationships between the Federal Government and the States for years to come. The adoption of revenue sharing, as a concept of government, would truly alter the structure of American Government–to the great advantage of the American citizen.

The Education Commission of the States, in a number of policy statements, has supported the concepts of grant consolidation as essential to a more flexible and logical system of Federal assistance for education. Secretary Richardson's statement before this Committee on S. 1669 aptly describes the ludicrous situation produced by the multiplicity of programs that exist under current laws, and is an excellent exposition of the need of consolidation. S. 1669 would streamline present processes by combing 33 existing formula grant programs concerned with secondary and elementary education into one program that would provide assistance in five broad areas of national concern; cut away many of the red tape requirements of the present programs; and give the States greater flexibility in planning and deciding on the application of Federal funds to their particular needs.

However, S. 1669, would not, in and of itself, provide for increased Federal assistance to States or school systems; it would not provide any general support funds for education; and it would not transfer full authority over the funds which it authorizes to the states. In short, despite its title it is a grant consolidation bill rather than a revenue sharing bill. This is not to deny the worth of grant consolidation, which ECS strongly supports, but rather to clarify what we are talking about.

A fundamental premise of this legislation is that the states should have the authority and opportunity to develop a comprehensive plan for the use of these funds. I would point out, however, that approximately 60 percent of the funds made available under S. 1669. including all funds for disadvantaged children and children living on Federal property, would be passed through to the local education agencies. Only the remainder would be subject to authority of State Government. These would be retained at the state level for the operation of state-wide programs and for distribution among local education agencies, according to relative needs for the types of assistance available, in accordance with a State Plan for each fiscal year developed consultation with a State Advisory Council which must be broadly representative of the education community in the state and the public.

This Committee and, indeed, everyone concerned with the future of education in the country must note a strong trend in increased state involvement and responsibility in the field of education. A number of states have taken steps administratively or legislatively toward state funding of education. This trend recognizes the limits of the real property tax as a means of financing local school systems and recognizes the right, as yet unfulfilled, of every child to equal educational opportunity without regard to place of residence. As seems to be ever the case, the judiciary has also taken a role in this process. Recent decisions of the Supreme Court of California and Minnesota are reflections of this trend.

As the trend toward full state funding of education continues, as we believe it will, these pass through provisions may become obsolete. I would urge this Committee to take account of this in framing the legislation before you, so as to permit maximum discretion on the part of state government to accommodate to the demand for, and to facilitate the development of, uniform educational opportunities throughout the nation. If a pass through provision of funds for disadvantaged children is considered necessary, there should be at least some mechanism for appropriate adjustment as states move in the direction of full state funding.

We have some reservations about the degree of administrative discretion in the basic formula for allocating funds to the States. Heavy weighting children from low income families as a factor undoubtedly has validity in measuring fiscal capacity of the recipient state and the magnitude of its educational responsibility. However, S. 1669 does not define low income families, but rather vests in the Secretary authority to define the term in accordance with such criteria as he may prescribe. Since this legislation is premised on the elimination of arbitrary Federal controls and administration, and the establishment of a clearly defined program of assistance for the states, such executive latitude is out of place.

Also, the 10 percent reservation of discretionary funds under S. 1669 is not keeping with the philosophy of either revenue sharing or grant consolidation. If the states and local education agencies are in a better position to judge the needs and priorities than is the Department of Health, Education and Welfare, it is difficult to see the justification for a discretionary fund which would be in excess of $300 million in the first full year even at the current inadequate levels of funding. Further this does not take account of the funding anticipated for the proposed National Institute of Education.

Beyond these suggestions for modification of S. 1669, we urge this Committee to examine the basic premise of the Bill, in the context of the General Revenue Sharing proposal, and consider making this legislation the vehicle for implementing a much broader program than it now contains. Secretary Richardson and other officials of the Administration have testified that the legislation as drafted is "open ended” with respect to funding, but it is clear from the fiscal year 1971 budget that it is not regarded as a vehicle for major increases in Federal support for education. The funds which would flow to the states and local educational agencies under its authority would be those which currently are available under existing Federal programs, albeit with fewer strings.

Spokesmen for the Administration have repeatedly indicated that advocates of more substantial Federal support for education should look to general revenue sharing for such support. I would submit that a number of considerations argue for amendment of S. 1669, to provide for Federal support for education which is broader in application and more substantial in amount than now contemplated.

First, General Revenue Sharing, which would be established at 1.3 percent of the Federal individual income tax base and produce approximately $5 billion in the first full year, would not entail as much support for education as might be supposed. Half of the money would be earmarked for local general purpose governments. Presumably, this would exclude school districts except where schools are operated as an integral part of a city or county government, or where such local governments voluntarily make payments to school districts. In theory, Federal revenues shared with municipalities and counties should reduce their dependence upon real property taxes, allowing school districts to raise their levies. However, this would be a most awkward procedure, running counter to the whole concept of revenue sharing, which is to reduce dependence upon real property taxes; and it would be inconsistent with the principle of educational equalization, by tending to force school districts to rely on widely disparate tax resources.

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