There is another bill before the subcommittee which has the purposes of meeting the present need for Federal aid but fails to face up to the present situation or to the future educational needs of the Nation. This is S. 1016.

First of all, this bill sets forth a 5-year program whereas there is every sign that the need for Federal aid will continue indefinitely with no end in sight.

Second, while obviously recognizing a serious situation exists, the bill backs away from the necessary steps toward prompt and effective action to cure this situation.

Third, the bill completely ignores the teacher shortage and the best means of getting qualified teachers.

In short, the Federal Government would make advances to school districts to pay one-half the annual principal and interest on bonds issued to finance new and urgently needed school construction. These advances would be conditioned upon the State advancing the other half.

A maximum of $600 million worth of Federal funds each year over a 5-year period would be made available to the States on the basis of a formula allotment and every community would have to make a reasonable tax effort whatever that is, before the Federal Government would help pay back the local school bonds. There are many additional strings attached to Federal support under this bill.

My basic objection to this approach is a simple one. In my judgment, it simply won't work. A few days ago I took the time to study how this bill would operate in the case of Milwaukee. Let's suppose Milwaukee had an urgent need for school construction which wasn't being met and could not be met under current methods of taxing and financing. What must be done to get Federal aid under this bill?

First, we would have to convince the State education agency of our emergency needs and get the State to submit a plan to the U.Š. Office of Education, on behalf of the city of Milwaukee and any other community needing aid.

Second, Milwaukee must undertake to make a reasonable tax effort, as determined by the U.S. Commissioner of Education and must show that this effort plus all available State and other aid will not provide the urgently needed construction. This reasonable tax effort, by the way, could be either the amount now being raised or it could include additional taxes, necessary to pay part of the construction costs. If new taxes are needed, we might well have to go to the legislature to increase our taxing authority.

Third, since Milwaukee has practically reached its present debt limit, as set by the legislature, the board of education would have to get the approval of the common council for lifting the debt ceiling and then go to the legislature to request them to raise our limit by the amount of the proposed bond issue.

In Wisconsin the legislature only meets every other year and the next regular session will be in 1961.

Fourth, the State legislature might well have to pass a new law guaranteeing debt payments on one-half of the new Milwaukee bond issue, or providing grants covering one-half the cost of school construction, with the bond issue covering the other half. Again, this could not normally be done until 1961.

Fifth, having obtained authority for further indebtedness, Milwaukee would then have to conduct a popular referendum to authorize the new bond issue to the maximum of the new debt limits.

Only after all of these steps, taking at least 2 or 3 years to work out, would Milwaukee be in a position to obtain assurances of Federal servicing of its new bond issue.

After floating the new bond issue at "the most favorable rate of interest and other terms," Milwaukee would have to maintain its "reasonable tax effort," during the life of the bonds or obligations, and for 10 years thereafter. If there are any surplus revenues left after the payment of all prior school construction commitments not covered by the new bond issue, these revenues must be applied toward retiring the new issue.

The Federal Government would then pay up to one-half of the servicing costs not covered by surplus revenues until the bonds or obligations are fully paid and retired. The State must pay the other half. In the event the State meets one-half of the new construction costs by a grant, then the Federal Government will pay off the entire bond issue to the extent that a reasonable tax effort fails.

After the bonds or obligations are retired, Milwaukee then would have to address itself for the next 10 years to the problem of paying the Federal Government back.

According to this bill, the local school district must during this period pay one-half of the surplus, if any, resulting from a "reasonble tax effort" to the Federal Government, and if the State should similarly advance debt service payments, then the other half to the State.

During these 10 years the school district would be required to pay interest on the unrepaid Federal advances at a rate determined by the Secretary of the Treasury in line with the rate on similar obligations of the Federal Government.

At the end of 10 years Milwaukee would be relieved of any further obligation to the Federal Government and the balance due would, in effect, become a grant.

And it is my opinion that, not only with respect to Milwaukee but also with respect to other communities as well, the school district would have so completely exhausted local sources of revenue before seeking Federal aid that a "reasonable tax effort" would fail to produce a surplus. The result, in the long run, would be indirect grants from the Federal Government to pay local loans, plus interest, instead of outright grants, without interest, to build schools and pay teachers quickly, effectively, and with a minimum of redtape.

I say this because my experience leads me to believe that most communities are like Milwaukee in that they have been struggling against heavy odds to meet their own educational problems themselves with their own financial resources. In fact, generally speaking, they have had little alternative. As a result, I believe you will find the communities which need help the most are least able to raise more money locally.

Just last Sunday I read a story in the Milwaukee Journal telling about a tax survey and report made by the Citizens Governmental Research Bureau of Milwaukee and its 28 suburban neighbors. The report said that Milwaukee divided its taxes about equally between

schools and other purposes controlled by the common council, while its Milwaukee County suburbs spent three-fourths of their taxes for schools and only one-fourth for other purposes. In the border communities an average of 94 percent went for schools.

As to the tax effort being made in the Milwaukee area, the report stated that, over the last 10 years, the amount of taxes levied in Milwaukee had increased 125 percent, from $46 million in 1949 to $104 million this year. In the suburbs the taxes jumped 173 percent, from $16 million in 1949 to $43.6 million this year.

If our metropolitan area is in any way typical of the rest of the country it is difficult for me to see how a "reasonable tax effort" could call for a further increase in taxes or how it could fairly produce a surplus to pay off any new bond issue or, for that matter, the Federal Government.

This is why I say the administration bill is, in the last analysis, a system which won't work. It doesn't face realities and it doesn't meet the urgent needs of our most hard hit towns and cities. It is slow, cumbersome, and expensive. It would not produce classrooms quickly, if indeed it would produce classrooms at all. It would inject the Federal Government into local financing and taxing systems as a judge and jury to an unprecedented and entirely unwarranted degree. But above all, and I am again speaking in terms of Milwaukee, it would fail miserably to provide the very kind of Federal assistance that we may most desperately need, that is, aid in training good teachers and paying them decent salaries.

To put it mildly, I am confident that this subcommittee can come up with a more straightforward and hard-hitting approach to the alarming problems which face our school boards today.

Before concluding my testimony, Mr. Chairman may I make one additional statement?

President Richard J. Gray of the building and construction trades department has told me that the department has given serious consideration to the classroom and teacher shortage.

While I am a vice president of this department, I am not speaking as its representative. I have merely been authorized to say that, due to the needs of our children and of our children's children, and to the opportunities presented for relieving many areas of unemployment in the building trades, the department wholeheartedly endorses the position I have presented to you today.

I thank you very much.

Senator MURRAY. Thank you for your very able and thorough and, I must say, very impressive statement. I am sure it will be given very careful study by the committee.

I think you have made a very comprehensive statement. The example of Milwaukee is repeated in many, many communities I know, urban and rural, throughout the country.

Thank you very much.

The next witness is Mr. Arnold Zander, president of American Federation of State, County, and Municipal Employees.

Mr. ZANDER. Thank you, Senator.

Senator MURRAY. You may proceed.

STATEMENT OF ARNOLD ZANDER, PRESIDENT, AMERICAN FEDERATION OF STATE, COUNTY, AND MUNICIPAL EMPLOYEES

Mr. ZANDER. My name is Arnold Zander. I am a vice president of the industrial union department of AFL-CIO. And I am appearing here on behalf of that organization.

The industrial union departments made up of 69 affiliated AFLCIO unions which have an industrial union membership of some 7 million. It is part of the AFL-CIO, supports the policies of the parent body, and represents the specific and general interests of industrial workers both inside the federation and before the general public.

I am also president of the American Federation of State, County, and Municipal Employees, a union with a membership of 200,000 nonFederal public employees. The membership of my union includes employees who work in our schools, universities, and for public and private educational institutions and authorities. My union is interested in good schools for the children of its membership, and has a special interest in adequate wages and working conditions for all public employees.

Industrial workers have a deep and abiding interest in the problem of education. As citizens, they look upon the schools as an important means to equip their children for living in our changing world.

Today, education plays an increasingly important role in the lives of all Americans. The complex issues before our world demand an educated citizenry. We can meet the challenge of the atom and of science only by an ever-rising level of education.

We stand today at the threshold of a world of leisure and abundance. At least, we are assured by our scientists, educators, and industrialists that this is in prospect. That world will be meaningless unless we prepare now through education to live within it.

Industrial workers have an average wage of some $87 per week and although they have been blamed for inflation, the facts are that such a wage level requires most industrial worker families to live in low income or modestly middle-income neighborhoods. These are neighborhoods where school problems are often acute. Too often, they are marked by rundown or obsolete school facilities, overcrowded classrooms and split-shift sessions.

Today, America is plagued by hard-core unemployment that is warping the lives of millions. The Nation also suffers a loss of wealth far beyond any present budget deficit because upward of one-fifth of its industrial plant is idle. The manpower and facilities to build new schools and solve our education problem are readily available.

America badly needs legislation designed to solve our school crisis. Such a program will create future wealth by educating our youth for more creative contributions to the economy and at the same time will help to put idle manpower and plant back to work.

Despite the fact that the school problem is national in scope and import, it is being argued in some quarters that the source of education funds should be States and localities exclusively. Let's examine this contention in some detail.

First of all, let it be noted that the States now provide approximately 40 percent of education funds, the local school districts 56 percent,

and the Federal Government less than 4 percent. If every cent that has been proposed is spent by the Federal Government, these proportions would not be greatly changed.

But what has happened in the States and localities? As reported in the Wall Street Journal of February 3, more than one-third of the school districts in the State of California have reached and are within 5 percent of their debt limits and must turn to the State for help. Though California's population explosion is exceptional, this situation is repeated the country over. Communities are groaning under a tax burden while relies disproportionately on the real property tax in a day when real wealth is often held in other forms. This burden hits hard those homeowners of middle and low income-and even those on pensions who have paid for their homes but still have to pay property taxes when their incomes have declined drastically. There are definite limits to the ability of this type of tax to support the present-day need for schools, and I am not speaking only of legal debt limits. I am speaking of what the traffic can bear.

What is the situation at the State level? It is not much better. You know of the financial crises facing even the largest and wealthiest of States-New York, Pennsylvania, Connecticut, and Michigan, to take some well-known examples. Pennsylvania's $100 million State construction grant program runs out in 1960 and it is questionable if the State legislators can renew appropriations. The pressure is on most State legislatures to boost State aid, even if this means adopting sales taxes or raising the rates of existing sales taxes.

This is not the place for a treatise on the incidence of taxation, but you gentlemen know who pays through the nose when the sales tax is used. You are not responsible for the nature of State tax structures, but you can see that the Federal Government meets its responsibilities to ease in some measure this burden which stems from a national problem of population growth.

It

This is not the time for schools-as-usual or taxation-as-usual. is a time for extraordinary measures to meet a national problem of extraordinary magnitude.

We are pleased to note that, despite the reluctance of the administration to sponsor any forceful legislation in the education field, there is a measure of bipartisan support for a real education bill. This support is shown by some of the legislative proposals before you, notably that of Senator Javits of this subcommittee whose thoughtful and thorough bill deserves your earnest consideration, though it falls short in its dollar amounts of what is needed to meet today's urgent educational problems.

We would like to affirm our support of the Murray-Metcalf bill which deals directly and on an appropriate scale with the two basic problems of school construction and teacher salaries. We will talk in more detail later about some of its provisions.

But first I would like to emphasize what is not needed in American education, and that is any further generalized study of the problems it faces. These problems have been repeatedly identified in study after study, and to hesitate further in the face of the overwhelming evidence is sheer irresponsibility. The basic problems are these: shortages of safe classrooms, inadequate teacher salaries, and lack of opportunity for education beyond the high school. These are by no