OVERSIGHT HEARING ON ELEMENTARY AND

SECONDARY EDUCATION

WEDNESDAY, FEBRUARY 23, 1972

HOUSE OF REPRESENTATIVES,

COMMITTEE ON EDUCATION AND LABOR,

Washington, D.C.

The committee met, pursuant to call, at 9:30 a.m., in room 2175, Rayburn House Office Building, Hon. Carl D. Perkins (chairman of the committee) presiding.

Present: Representatives Perkins, Pucinski, Brademas, Ford, Bell. Peyser, Quie, Dellenback, and Landgrebe.

Chairman PERKINS. The committee will come to order.

A quorum is present.

It is a great pleasure for me to welcome before the committee as our first witness one of our distinguished colleagues, Congressman Joel Broyhill. I know the great interest that Congressman Broyhill has always displayed and held fast to in the so-called impacted-area programs, Public Laws 815 and 874 of the 81st Congress; maintenance and operation and the school construction programs have played a great part in helping finance the school systems in your district.

The legislation was extended through, if I recall, June 30, 1973. We are looking into all aspects of the general education program-I mean the categorical programs, such as Public Laws 815 and 874, and the Elementary and Secondary Education Act.

Mr. Pucinski next week will commence hearings on general education bills pending before the committee. We are hopeful that we can sometime later on this year enact a general aid-to-education bill, and certainly it is my hope that we will be able to extend and expand the impacted-area programs. I know these programs have been of tremendous benefit to the school systems throughout the Nation where we have had this so-called governmental impact in the past. The programs, to my way of thinking, have worked out well.

Congressman Broyhill, I am delighted to welcome you here this morning. I do want to state that on many occasions when we were in trouble on the House floor you gave the sponsors of the legislation invaluable assistance and we have always appreciated it. We are delighted to welcome you as our first witness today.

Proceed in any manner you prefer.

STATEMENT OF HON. JOEL T. BROYHILL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF VIRGINIA

Mr. BROYHILL. I feel I should quit now while I am ahead and just put my statement in the record.

Chairman PERKINS. I always thought you have done very well all through the years.

Mr. BROYHILL. I thank the chairman for his kind words and for the privilege of appearing before the committee this morning. Realizing that the committee does have a very heavy schedule, I would like to submit my statement for the record.

Chairman PERKINS. Without objection, the prepared statement will be inserted in the record.

(The statement referred to follows:)

STATEMENT OF HON. JOEL T. BROYHILL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF VIRGINIA

Mr. Chairman: It is a pleasure to appear before your Committee today in behalf of the continuation of programs authorized by Public Laws 815 and 874, 81st Congress, providing for aid to Federally impacted school areas.

As the Committee knows, these programs have been misunderstood and actively opposed by the last four Administrations. They have been singled out repeatedly in the press for carping criticism and such labels as "pork barrel" and "handouts". In 1970 the President of the United States vetoed the Education and Labor appropriations measure sent to him by Congress, and in so doing devoted much of his veto message to criticizing impact aid as a wasteful and unfair program which favors wealthy communities over the poor.

It is easy to see how these misunderstandings arose, Mr. Chairman, because ever since 1965 we have lumped impact aid in with all other elementary and secondary education programs, and in the process we have failed to label it as what it was originally intended to be and has in fact been ever since, a formula by which the Federal Government can make a payment in lieu of taxes to the communities in which it operates.

Whether or not we support the enactment of more and more legislation to take from the haves and give to the have nots, these programs were never intended to be that kind of social legislation. Enactment of these laws and their continued funding over the years has represented an acknowledgement on the part of Congress that the Federal Government has an obligation to the communities in which it operates comparable to that any private industry which operated in a similar manner would have.

I might say at this point that my own communities in Northern Virginia would fare much better financially if we could assess and tax all the federally owned property on the same basis it would be taxed if it were private industry. In Arlington County, for example, we have 4.6 square miles, or approximately 128 million square feet under Federal control. This is 18% of the total land area. Some of this land is extremely valuable, as is demonstated by the fact that land between the Pentagon and the Washington National Airport is valued at about $12 a square foot, and land in the Rosslyn complex not far away at more than $26 a square foot. However, if we estimated on the basis of 18% of all the Arlington County property and all types of zoning, then assumed a rock bottom price of $4.00 per square foot, the market value of government held property in Arlington would be $512,960,000, and if it were assessed at 40% of appraised value, or $205,000,000, annual revenue from real estate taxes alone would be a minimum of $7,851,500.

The impact aid programs enable the Federal Government to pay part of the cost of educating children of employees who work or live on these tax-free properties. But these payments fall far short of meeting the full obligation the Federal Government, as an employer and property owner, would assume were it privately owned and operated. Arlington County's share of impact aid for Fiscal 1971 is $1,853,268, roughly $6 million less than the County would receive in real estate taxes alone for comparable non-Federal property.

Mr. Chairman, it is unfortunate that after so many years of recognition by Congress that we do have an obligation to these communities, we must continue to defend it year after year from charges that it somehow discriminates against the poor of the Nation. I believe we made a grave mistake back in 1965 in not fighting much harder to prevent lumping impact aid in with other education programs your Committee considers from time to time, as we have made it a

little more difficult for critics to accept our explanation of its purpose. I have introduced and supported measures which would provide for direct Federal payments to communities in lieu of real property taxes, and I believe enactment of such legislation would remove once and for all the question of the purpose and equity of payment of these funds. But until such time as Congress acts favorably on an alternative proposal, I urge the Committee to continue and even to consider expanding payments under Public Laws 815 and 874 to more accurately reflect the revenue loss sustained by those communities in which the federal government operates on tax-free property.

Mr. BROYHILL. I think we should attempt to clarify what the original concept of the impact aid program was. I know the chairman of the committee was a Member of Congress at that time. I came to Congress right after the program was enacted. It was my understanding that while the use of the word "impact" recognized the sudden thrust of Federal operations in the communities, the main reason to justify the aid was the fact that the Federal Government was in these communities operating as an industry and that property had been taken off the tax rolls, which is generally the main source of revenue to support the school system in any community.

You can take any town, the town of Pittsburgh or any town, a principal industrial town, and you will find a major part of the tax revenue comes from the place where people work, not where they live, because the residences themselves are a dead loss to the community. In fact, the President has suggested another form of raising revenue in order to support the school systems of the country because residences alone certainly cannot do it.

So I think we should clarify and emphasize why we have the impacted aid program to start with; that is, there is a payment in lieu of taxes based on the fact that the Federal Government is there operating as an industry.

I urge that the committee do something to further clarify what the impact aid legislation, or Public Laws 815 and 874, is all about. Chairman PERKINS. The gentleman is analyzing the situation correctly. I served on the subcommittee back in 1949, the subcommittee that drafted the original impact aid legislation, and we had in mind one thing. When the Federal Government came in, took over property, took it off the tax rolls, the local government was to be compensated for its loss of local revenue.

Go ahead, Mr. Broyhill.

Mr. BROYHILL. I am not talking about wasteland, Mr. Chairman, or park lands or property that is of no value taxwise to the communities. I am talking about productive property.

If that property were assessed at the same rate as other property in the community, averaging out assessment of residential and business property, we would receive six times more in Arlington County than we receive through Public Laws 815 and 874.

We should do something to clarify for not only this administration but future administrations that we are talking about a Federal obligation and not a handout or something of that sort.

Second, Mr. Chairman, I know that the committee has expressed its concern many times about the uncertainty as to whether the program is going to be continued or whether the appropriations are going to be made from year to year. Once we put a program on the books,

the communities get used to living with it, anticipate the funds coming in each year, and they set the budget accordingly.

Then when appropriations are cut back or there is a threat of not extending the program, they face a real problem trying to remain sound and efficient in preparing their budgets from year to year.

So if the committee can do something to eliminate the degree of uncertainty-there is nothing ever completely certain about what Congress will do from year to year, but I think we can make it more assured.

Third, in an effort to eliminate this constant criticism that rich communities are getting benefits from impacted aid programs and that we should direct it at communities where the need is greater, I say again it is an obligation. If it is an obligation, we cannot renege on an obligation just because we think the people to whom we own the obligation do not need it.

I think we should set this up as a permanent obligation that will be met from year to year, and then, when we come along with the other elementary and secondary education programs, more emphasis can be placed on the need of the community, what the community is doing for itself, what the sources of revenue happen to be, and maybe credit can be given to them or to the Federal Government for the impact aid funds that the community has received, so that the programs that should be based on need-and I think an elementary and secondary general education program should be-are funded on that basis. There is no point in feeding Federal funds to the wealthy communities at the same rate as the poor communities. But at the same time you could then take into consideration the needs of all communities, including those who benefit from the impacted aid program, to determine if they are indeed wealthy communities and do not need the benefits of Federal support for elementary and secondary education programs.

In other words, Mr. Chairman, instead of arguing year in and year out as to whether the wealthy communities or alleged wealthy communities are entitled to the benefits of impact aid, eliminate need entirely from future considerations of impact aid and make that a factor only in the consideration of the general elementary and secondary education program.

That would help to clarify this problem which I think should be clarified, and also to eliminate this degree of uncertainty which makes it extremely difficult for these communities to plan their budgets year in and year out, and have a sound, efficient, and orderly educational system.

Thank you very much, Mr. Chairman.

Chairman PERKINS. Let me say to you, Mr. Broyhill, that, in my judgment, when the committee members read your testimony they will find that you have been most helpful to the committee. You have certainly pointed up the problems to the committee, and I am most hopeful that we can take action on them this year.

I want to thank you again for the support that you have always given the committee and the legislation. Chances are the bill will not be marked up for several months, but we will confer with you again from time to time and may call you back.

Mr. BROYHILL. Thank you very much.

Mr. DELLENBACK. Mr. Chairman, may I make a brief comment? We appreciate very much, Mr. Broyhill, your being with us. Your advocacy on behalf of your constituents of this concept is well known. It has been very effective, and you do it well.

Let me just say very briefly that I, as one individual, strongly support the idea of advance funding and predictability. That is a large part of what you said. It is frustrating for a school district not to know what is going to happen. It is an impossible job when administrators are not able to call the shots a few months in advance, but are in the middle of a school year before they know what they are going to get in the way of school aid. Yet, too frequently we have done that.

I think Federal support for schools on an elementary and secondary as well as higher education level is vital. No community ever says it does not need more money, and you have talked in terms of the rich and the poor school districts. It does not matter whether you are talking about the wealthiest school district in the Nation, it will always look for additional funds if it sees them coming.

I read your testimony and listened to you again this morning, and I repeat you have done it well, defending the idea of Federal aid, not necessarily defending the present formula.

I think that is a very important distinction to make because there is a fundamental distinction between the idea of Federal aid--and I think it should be forthcoming-and a district like yours which has such a heavy involvement with the Federal Government. I think there is an obligation on the part of the Federal Government to contribute to schools. But that does not mean that the formula we have at the present time is the ideal formula. Once it is on the books it is difficult to change.

Some of us who want to support Federal aid are not of necessity prepared to defend the present formula. So I just wanted to be sure that you understood that particular point, and I do not really read you as contradicting that. I did not read in any part of your testimony-and I read it over while you were talking-an item-by-item defense of the present formula.

You have defended the principle, and I think you have done it ably and well. We appreciate your testimony very much this morning. Chairman PERKINS. Congressman Broyhill, let me state that I personally feel that your congressional district, the people that you have represented so well, are very fortunate, especially from the viewpoint of the great support that you have given the schools. I share the concern as expressed by Congressman Dellenback that we should do something about the advance funding aspects that we enacted several years ago. We have never gotten the Appropriations Committee to go along. For 1 year they partially went along with us. But I am hopeful that we can eliminate some of these problems by timely authorization and timely funding, including advance funding. That is really one of the purposes of these hearings. You have been very helpful to the committee.

Our next witnesses are representatives of the National School Boards Association: Kenneth Buhrmaster, president, National School Boards Association; George Oser, Houston, Tex.; and Augustus Steinhilber, National School Boards Association.