and the gifted. Emphasis should be on individualized programs within the mainstream of regular schooling as much as possible. States should be required to provide appropriate special-education services to all exceptional children, and should be encouraged to re-allocate Federal funds to local school districts on an excess-cost basis. Parents should have full hearing and appeal rights. A state plan containing these elements should be required to be approved in accordance with state law as a condition of such aid. 4. Impacted aid. While funds for impacted school districts have provided valuable revenues for education, they have also created a problem for the increasing number of states attempting to equalize educational spending. The present program allows large sums of money to flow into local education districts, but forbids the state to consider such funds as local revenues when distributing state aid. Since the new equalization formulas are designed to remedy inequalities in local revenues, impact aid money has the effect of undoing what the state legislature has done - of disequalizing where the Obviously, this intention was to equalize. The problem lies in the fact that the local contribution rate is equal to the per-pupil expenditure for education from local sources in comparable school districts in the state. penalizes those states with a high percentage of state funding for elementary and secondary education. The maintenance of this provision stands as a disincentive to states wishing to provide greater equalization of expenditures by moving toward increased state funding. In addition, Section 5(d) (2) of P.L. 874 should be reworded in such a way as to permit these funds to be counted as local revenue in any state which has passed equalization legislation. This provision in current law prohibits states from considering impact aid payments as local resources when considering the eligibility of a local school district for receipt of state education funds. This constraint has the definite effect of impeding the efforts of many states in developing equitable school finance structures. Under this new equalization plan, if P.L. 874 funds of a district cannot be considered as local resource, the plan would be subject to severe distortion. Specifically, if P.L. 874 is not taken into account, similar districts would be permitted to spend at similar levels but have widely varying taxing efforts. Since P.L. 874 is generally considered a kind of payment in lieu of taxes, it seems reasonable to consider such aid as being of the same general character as locally-generated taxes and therefore an element of local resources. I hope you will correct these problems. 5. Support materials and services. Consolidate Titles II, III, and V of the Elementary and Secondary Education Act, Title II of the National Defense Education Act and the Adult Education Act into a comprehensive state materials and services program to include adult education and school library and instructional resources. Up to 15 percent of any state allocation may be used for administering Federal programs and strengthening state education agencies. States should be required to submit state plans developed after public hearings, approved by the governor. 6. Special Federal responsibilities. Funds should be authorized for the discretionary use of the U. S. Commissioner of Education for furthering the purposes of the Act generally, but with specific emphasis on: Providing special assistance in the development of testing programs for evaluating the effectiveness of categorical programs as the basis for allocating compensatory education funds. -7 Improving the USOE data-gathering capacity to provide states with much-needed management and decision-making information, particularly as such information is necessary to implement aspects of Federal program consoli dation equalizing school finance systems, providing aid to exceptional children on an excess-cost basis, etc. Assisting the states in developing both a Cost-of-Education and an Educational Needs Index. Allow me to elaborate briefly on this point. Equal educational opportunities must be the goal of all levels of government. Equality, however, does not mean identical treatment. The value to be fostered by a system of public education is the opportunity to succeed, not uniformity of success. As the President's Commission on School Finance suggested, "To offer children only equal education, disregarding differences in their circumstances, is merely to maintain or perhaps even to magnify the relative effects of advantage and handicap. Equal treatment of unequals does not produce equality." A concept of equal educational opportunity should reflect a sensitivity to differentials in costs and variations in the interests and needs of those to be educated. However, attempts at relieving disparities by attending to their differences will prove fruitless unless those needs and costs can be clearly identified and adequately quantified. 7. Total consolidation. Provide for payment of most, if not all, Federal aid directly to those states which have school finance systems meeting certain minimum standards. Such total consolidation would be authorized when a state system is determined by the Secretary of Health, Education and Welfare to meet the objectives of existing Federal categorical programs. We do not have a specific proposal at this time. However, such standards might be framed in the following manner: Per-pupil expenditures in school districts within the state do not vary more than a determined percentage from the statewide average excluding assistance for compensatory education and educationally handicapped. The state aid system adequately recognizes the additional and higher costs of compensatory education and special education. State administered programs in these areas are administered equitably and are responsive to the needs of all children in the state. This concept is one which would permit a complete meshing of Federal and state funds. It deserves your attention and we would be happy to try to develop the idea further with you. Finally, Mr. Chairman, there are certain elements which should be built into any legislation emanating from this committee. Any program consolidation must include consideration of three additional factors: strategy and funding. accountability, Program consolidation block grants should go to the state agency legally designated by the state as responsible for elementary and secondary education. Public and public official accountability is assured, however, by requiring a separate state plan for each program consolidation area required to be approved in accordance with state law. These plans would have to be submitted to the U. S. Commissioner of Education for information, not approval - before a state could be declared eligible to receive its block grant allocation. The Commissioner should be required to report annually to the Congress on the effectiveness of program consolidation activities in the various states. -9 In addition, any legislation should contain the following general provisions: Provide adequate transition time. State and local education agencies and the U. S. Office of Education need time to plan, time to coordinate - new programs with existing programs, or, in the case of program consolidation, time to make the transition from one form of Federal aid to another. Thus, while a program consolidation bill enacted in late 1973 could become effective in the 1974-75 school year (fiscal 1975), any such legislation enacted in 1974 should not take effect until the 1975-76 school year (fiscal 1976). Provide forward funding. Funds appropriated in one fiscal year should be for use by the states in the following fiscal year. In this way every state would know the magnitude of Federal assistance in time to develop more effective plans for coordinating Federal and state programs. Consider Puerto Rico, the Virgin Islands, Guam and the District of Columbia as states. These areas are responsible for the education of several hundred thousand children. Yet many Federal programs provide limited access and unequal funding for these areas through a percentage set-aside technique that results in far lower allocations than would be true if these areas were to be considered as states. Provide for full state involvement in the preparation of regulations and guidelines to implement this legislation. ment in drafting guidelines and regulations. Too often U.S.O.E. officials draft guidelines without adequate outside advice and counsel and invite reaction only on an ex post facto basis. Involving state officials from the beginning would help prevent later misunderstandings, smooth the transition to new or revised programs and aid annual program administration. Maintain funding levels. The minimum level of first-year funding should at least be equal to total fiscal 1973 appropriations for all programs involved in any consolidation package, plus a 10 percent inflation factor. we believe these suggestions, if adopted, will permit meaningful progress toward an integrated and effective system of education finance. -10-11 |