I am not unaware of the court cases concerning the property tax which are being discussed throughout our land. I am not unaware of the rethinking of public school financing which is just around the corner. I am pleased that Congressman William Ford's General Aid Bill uses the Public Law 874 "concept" as a model. It will be a few years before there are vast changes in financing. In the meantime, the schools of Ayer, Shirley, New England, New York, New Jersey, and other school systems throughout our country who are impacted must deal with curriculum innovations. remedial instruction (especially necessary with transient youngsters), expanding costs, and the administration and control of schools that are common to other American school systems. I know that the members of the Committee are giving their best thinking to possible changes in educational financing. However, until a future Congress is able to make changes, I urge full funding for Public Law 874 and Public Law 815. Thank you. STATEMENT OF FRANCIS LAUFENBERG, ASSOCIATE SUPERINTENDENT, BUSINESS AND FINANCE, LONG BEACH, CALIF. Mr. Chairman and Members of the Committee, my name is Francis Laufenberg and I am Associate Superintendent for Business and Finance of the Long Beach Unified School District. I am appearing today as the representative of the California League of Federally Aided School Districts. Thirty-seven districts are members of the League. My purpose in testifying today is to urge your continued support of all existing Federal programs for education. I especially urge your full support of PL 874 and PL 815 until a comprehensive bill for general support of education, such as Congressman Ford's HR 12696, can become effective. In pleading for the continued support of PL 874 and PL 815, I would like to briefly list a number of hard cold facts which, I hope, may conteract the cliches, catch-phrases and generalities used for over twenty years by administrative critics of PL 874 and PL 815. 1. School Districts are and will continue to be largely dependent on the property tax. During 1971-72 the State of California will provide an average of only $284 per pupil in grades K-14. The average cost of education in California is over $800 per pupil. The bulk of the money comes from the property tax. The Long Beach Unified School District budget for 1971-72 totals $77 million. Only 19% of that $77 million comes from the State. Local property taxes provide 73%. 2. Homes, as property, never have and never will provide the taxes necessary to educate the children of a community. 3. The major portion of school district taxes comes from the businesses and industries that create a community. 4. Federal Government activity is a large industry in many communities. Such activities bring in workers and children and at the same time they remove land from the tax rolls and produce no taxes on the improvements built on that exempt land. 5. Money spent by Federal employees in a community may help the local businessman, and even the City via the sales tax, but there is no direct flow of money to help the local school disrict meet its obligations. 6. When any portion of our industrial society is exempted from taxes, the burden of filling the void is automatically distributed among the remaining taxpayers. 7. The fact that the Federal Government has removed taxable property from the assessment rolls, and created a group of workers whose children must be educated by the remaining taxpayers, has been partially offset by means of Public Laws 874 and 815. 8. Public Law 874 currently authorizes the payment of $450.32 for every child whose parents both live and work on tax exempt Federal property. The actual cost per pupil in local property taxes in the Long Beach District is $675.25. 9. Public Law 874 currently authorizes the payment of $225.16 for children whose parents work on Federal property but live in tax producing local housing. The average home in Long Beach is valued at $20,000, and is assessed at $5000. Such a home produces approximately $200 per vear in school property taxes. Even in a home with only one child, the above contribution leaves a tax shortage per pupil of approximately $250. 10. Public Law 815 authorizes funds for construction of schools needed because of the impact of Federally connected children. Again the law assumes some of the burden of bond interest and redemption normally paid for by local property taxes. 11. Both Public Laws 874 and 815 have been efficiently administered. The funds pass directly from the U.S. Treasurer to the local district without interference from Federal, State, or County bureaucracies. 12. The Stanford Research Institute in 1965 and the Battelle Memorial Institute in 1969 both recommended the existing programs as "defensible” and “sound." SERRANO-PRIEST DECISION Many people are now discussing the "Serrano-Priest" decision in California relating to equity in school financing. The intent of the Supreme Court of California, in ordering this case to be heard in Superior Court, was to require that court to arrive at a decision which would mandate a more equitable distribution of school funds, including the existing income from the property tax. The recommendations of the State Supreme Court do not abolish the property tax or require it be increased or decreased as a total statewide source of income. The mandate is simply that a system be devised by the Legislature which will distribute the income from the property tax more equitably. There is no evidence that the final decision on Serrano-Priest will be made this year or next. There will probably be long court delays and appeals. The principle of Serrano-Priest will provide no additional money for schools and will possibly injure the urban districts, which have usually spent above the State average. The National Urban Coalition, and other liberal groups who supported the Serrano-Priest lawsuit, are now having second thoughts. Many fear they have actually caused harm to the very urban districts that SerranoPriest was designed to help. The urban districts, which actually depended largely on the property tax, will see their property taxes distributed statewide and their financial problem increased rather than reduced. In summary, there appears to be no hope of additional State or Federal funding in the next year or two that could replace the loss of existing PL 874 and PL 815 funds. We therefore urge the renewal of these authorizations for another two year period. Your continued full support of other urgently needed Federal programs for education is also requested. Mr. HAND. I wear three hats today: First, as superintendent of schools in Ayer and Shirley, Mass., highly impacted areas; second, as the New England representative of the National Impacted Area School Superintendent's Association; and third, representing our national chairman, Superintendent Arthur Briscoe, of Alameda, Calif., to bring testimony for the Northeast area. At this time, Mr. Chairman, with your permission I would like to introduce two school committee members who are with me today. Chairman PERKINS. Without objection. Mr. HAND. Mr. Frank Harmon, vice chairman of our Ayer School Committee, and Mr. David Legere, chairman of Shirley School Committee. They have a real interest in the things you are doing. Chairman PERKINS. Let me put one question to all of you gentlemen. Do you have some other educational program that can take the place of the so-called impact aid program or do you want to hold fast to the impact aid program? What is your answer to that? Mr. HAND. We want to hold fast to the impact aid program until we have a massive Federal aid program. Chairman PERKINS. What about you, Mr. Burkhead? Mr. BURKHEAD. I would hold fast to the impact aid program. Chairman PERKINS. What about you? Mr. LAUFENBURG. Yes, that is the essence of my statement. Mr. HAND. First, I would like to discuss my local situation. Large portions of the original land of the towns of Ayer and Shirley, Mass., have been taken over by the Federal Government for military purposes and no longer are taxable. Of the 8.82 square miles of the town of Ayer, approximately 2 square miles, or one-fourth of our land area. has been taken for Fort Devens, the largest military installation in New England. In Shirley, the Government has taken 589.6 acres, or approximately 1 square mile. The loss of this land not only means a loss in taxable property, but also means for each of these towns that it can no longer be used for the normal expansion and growth of industry and housing to make a broader tax base. In Ayer, the total school enrollment is 3,700. Of this, 67 percent of Ayer's entire school population is federally connected. The valuation of the town of Ayer is $8 million. The school budget is close to $3 million. The population of the town is less than 5,000. The assessed valuation per pupil is a little over $2.000. This says, in layman's terms, that the amount of money behind each student is very limited. The picture in the town of Shirley is much the same. The town's valuation is $4 million, and over 20 percent of its pupils are federally connected B pupils. In Shirley, 7 percent of the school budget reflects Public Law 874 aid. I have been associated with Public Laws 874 and 815 for 15 years as a teacher, principal, assistant superintendent, and superintendent. I have liked the way they operate. I have liked the freedom given local school committees to use the funds for the educational benefit of students with a minimum of redtape. However, recently I have been concerned about the possible curtailment of field services by our regional HEW offices. I feel that their proposals will make the administration of Public Law 874 extremely and unnecessarily cumbersome at the local level. I am here to speak for the extension and full funding of Public Laws 874 and 815. I am not unaware of the court cases concerning the property tax which are being discussed throughout our land. I am not unaware of the rethinking of public school financing which is just around the corner. I am pleased that Congressman William Ford's general aid bill uses the Public Law 874 "concept" as a model. It will be a few years before there are vast changes in financing. In the meantime, the schools of Ayer, Shirley, New England, New York, New Jersey, and other school systems throughout our country, which are impacted, must deal with curriculum innovations, remedial instruction-especially necessary with transient youngsters-expanding costs, and the administration and control of schools that are common to other American school systems. I know that the members of the committee are giving their best thinking to possible changes in educational financing. However, until a future Congress is able to make changes, I urge full funding for Public Laws 874 and 815. Thank you. Mr. QUIE. Dr. Hand, could I ask a question? You say in your testimony you have been concerned about possible curtailment of field serv ices by regional HEW offices. I don't know what field services you are talking about. Mr. HAND. I am in the Boston area, where the HEW people come out to audit our records and give us guidance in terms of the financial aspect of the program, check the forms, and so forth. Now there is a program underway whereby we are going to have to take two counts, get two forms, send 3,000 forms to Boston where some secretary is supposed to check the forms, and school registers and all this type of thing are going to have to be brought to Boston. I have 13 areas where some reorganization may take place. Now, in the past a regional representative would come to the town of Ayer and take my 2,500 forms. He would check the forms. He would check my financial records, check my school registers, and help me in terms of the proper administration of Public Law 874; throw some forms out that I included that I should not have included; in other words, saving the Government some money. Now the new thought is a secretary in Boston can do this type of thing, and I personally feel that administratively it is going to hurt our program at the local level. I have the 13 suggestions, if I could submit this for the record. Chairman PERKINS. Without objection, it will be inserted in the record. Mr. Peyser, any questions? Mr. PEYSER. No, sir. Chairman PERKINS. You go ahead, Mr. Burkhead. STATEMENT OF G. C. BURKHEAD, SUPERINTENDENT EMERITUS Chairman PERKINS. Without objection, you will be permitted. (The statement referred to follows:) SUPPLEMENT TO THE ORAL TESTIMONY OF G. C. BURKHEAD Mr. Chairman and members of the Education and Labor Committee, I am G. C. Burkhead, superintendent emeritus of the Hardin County Schools, Elizabethtown, Ky. On February 23, 1972, I have oral testimony before this committee and asked permission to submit supplementary testimony in writing for the record. This request was granted, and for this I am deeply grateful to the committee. This testimony not only reflects the interest of my own school district, but also it is in the interest of the other sixty districts in Kentucky who receive funds from Public Laws 815 and 874. I believe that it also presents the sentiments of a large majority of the impact districts across the Nation. I agree wholeheartedly with the statement made by Congressman Broyhill of Virginia before this committee on February 23, 1972. He said in substance. "When the U.S. Government takes away a portion of the tax base from a school district, it places itself in the position of a taxpayer and should pay such district for the consequent loss of revenue." In Hardin County where Fort Knox Army Post is located. 110.000 acres of land have been removed from the tax base. This is about one-fourth of the total land area of the county. The tax revenue from this vast amount of land is lost forever to local governmental agencies. The acre value of this land would be comparable to that of the other land in Hardin County. It is true that the Fort Knox Army Post has attracted great numbers of people to this area, and it has provided great numbers of jobs. It has, however, utterly failed in compensating the local governmental agencies for the loss in tax base. It is this tax base that provides funds for the operation of schools and other governmental functions. If, however, we disregard the loss in taxable property, the government still has a firm obligation to provide aid to the schools just as industry would do if investments were made in factories that brought to the area an equal number of people. The Government must place itself in the position of taxpayer in order to compensate for its vast installation of nontaxable properties. Since World War II, the school enrollments in Hardin County have tripled. About one-third, 3,250 pupils, are federally connected. Approximately one-half of this number are children whose parents are in the uniformed services. Counting 21⁄2 children per family, it would take 1,350 homes to house them. If they all lived in homes valued at $100,000 each, the tax revenues received would pay less than one-third of the actual cost of educating these children. These families, of course, do not live in expensive homes; many of them live in trailers and pay little or no tax. According to the latest count by the Hardin County Health Department, there are more than 6,000 trailers in the county. In this connection, I would also like to point out that automobiles of service personnel are not taxed, and that much of their shopping is done for food and other necessities at the post exchange where no sales tax is paid. For more than thirty years, the Hardin County School District has levied the maximum tax rate provided by State law, and it has been forced to keep its bonded indebtedness at the maximum. Without the aid of Public Laws 815 and 874, it would be impossible for the school district to provide for more than a six month school term and provide even a minimum program of education during those six months. These same facts can be duplicated in hundreds of school districts throughout the Nation. There is simply no other way except through Public Laws 874 and 815 for many, many districts to even keep their school programs in operation. I would like to pay tribute to those superintendents who, during the late forties fought so valiantly and courageously for Impact Legislation. The school leaders deserving the most accolades are Ralph E. Hood of Brunswick, Georgia, the late Oscar V. Rose of Midwest City, Oklahoma, and Bill Simmons of Detroit, Michigan. There were, of course, others. I would like also to pay respect to the many fine, foresighted Congressmen who realized that this legislation has enabled school districts all over the Nation, more than four thousand of them, to keep the school doors open and who because of their understanding and support have made it possible for millions of children to have at least the minimum essentials of a good education. The need was great in 1950 when P.L. 815 and 874 Laws were first enacted by the Congress. The need still exists today, and in many cases the needs have increased and continue to increase year by year. The title of the first Bill passed read, “A Bill to Provide for the Education of Children Residing on Certain Nonsupporting Federally Owned Property and Children Residing in Localities Overburdened with School Enrollments Resulting from Federal Activities in the Area, and for Other Purposes." Gentlemen, the need has not changed. We still have the Federal Activities-increased activities in some areas-there are still the rising school enrollments in these areas, and there is still the large concentrations of population. We still have more than four thousand school districts affected by Federal Installations, four thousand school districts who year by year find it more difficult to balance the school budget because of dwindling Impact Funds. Many districts have been forced to cut services because Congressional Appropriations have not met Congressional Authorizations. I would like to remind this Committee and the Congress that any sudden cut-off of Public Law 874 Funds would result in disaster for millions of children throughout the Nation. For several years, the funding for this legislation has been gradually reduced. Even greater reductions are being recommended for the next Fiscal year. The Touring Committees of 1949 found unbelievable conditions in the schools then, and I protest that further reduction of funds would result, in many instances, of conditions even worse than those found in 1949. |