proportion of our roads must be paved. Eighty-five percent of our highways are surfaced, while the national average is only 65 percent. With modern secondary road construction costs running at $200,000 a mile, Maine people must sustain a per capita road burden of $4,000 more than the average U.S. citizen, and $25,400 more than the average New England citizen.

I realize that a perfect formula cannot be devised for the allocation of funds under the program we are supporting. However, I do believe that every effort should be made to take into account the peculiar problems which various States must meet, to avoid discriminating against States which have low incomes, and which have special financing needs in other areas. An effort index based on the relative standings of the States in expenditures for education alone is bound to discriminate against States which must spend a disproportionate amount for roads, public welfare, or other categories.

It is my firm conviction that if an indicator of effort is used, it should be modified at least by the realtive tax load which citizens in various States must bear. For example, Maine, although below the national average in per capita income, is above this average in the relative burden of taxes on individual citizens.

The following table, comparing four States, will illustrate our standing, and that of Delaware, Mississippi, and Montana :

State and local tax revenues during fiscal year 1957 in four selected States

You will note that Delaware's relative tax burden is slightly more than half of that in the State of Maine. And yet, Delaware ranks 12th in per capita expenditures for education. Obviously, any effort index based on expenditures for education will tend to favor a State like Delaware, while placing additional burdens on States like Maine, whose per capita tax collections exceed the national average and indicate a willingness to accept fiscal responsibilities in spite of relatively. low per capita income.

It is my recommendation that this committee give careful attention to a possible modification in the effort index formula to make allowances for the relative tax burdens in the several States. I am not a statistician, and consultation with a number of educational leaders has not provided a magic answer, but two alternatives have been suggested. One approach would be to multiply the effort index by a factor derived from the percentage State and local tax collections are of individual income payments, and to specify that those States whose corrected effort index was above the national average would not be penalized simply on the basis of relative standing in expenditures for education. The other alternative would be to specify that States with a tax

burden more than 10 percent above the national average would not be penalized by the effort index.

It may be that no formula can be worked out on this basis which would command widespread support in the Congress. However, I do believe that this committee has an obligation to explore the possibilities very thoroughly before a final bill is reported. If our intent is to help States achieve a higher level of educational opportunities, we must not draw a bill which will penalize them or hamper them in the process.

In closing, may I again state my firm support for the general purposes of this legislation, and urge that within the limitations of careful consideration of all the factors involved, speedy action be taken to aid our children and our Nation in the quest of an educational program geared to our age and the future. We must answer the question: Do be believe in our free system of education strongly enough to give it the support it needs? Or are we token worshipers at the shrine of education, bowing to the image of education but doing nothing to perpetuate its influence?

Mr. UDALL. Well, the gentleman has performed a real service in calling this to our attention. Of course, the purpose of the maintenance of effort indexes that we want to guard against States using Federal revenues as replacement for local efforts. I notice in H.R. 22 that a provision during the first 3 years of the operation of the bill, the maintenance of effort index be suspended presumably so that we can carry out the study that you have in mind. I think calling this to our attention in advance as a very vital problem that some States face has focused attention very properly on it.

Mr. COFFIN. I think that suspension factor in this bill is an improvement over the bill a year ago, and it may be that this will do it. If you could not get a formula, and I think it might be difficult, to get a formula during these hearings, and if in your committee report indicated that during the grace period there should be a maximum attempt to tackle this problem, that I think would be a good service.

you

Mr. THOMPSON. I do not see why the establishment of an equitable formula would be an insuperable obstacle at all. I think that the gentleman's point is very well taken, and it certainly deserves the consideration that it will get, I am sure.

This is a terribly difficult thing to come up with something that really works everywhere, as it should.

Mr. COFFIN. I admit it is a terrific problem, but I think we have to trust the States. We may not always have made the effort that we should, but yet we have to be in the position of saying "Well, the States must be trusted to take care of their people in the way that the people want to be taken care of."

I don't know that it is our province to pass judgment as we are if we allocate these moneys solely on the basis of money spent for education.

Mr. KEARNS. Would you yield there?

You mentioned about school buses.

Mr. COFFIN. No, I did not.

Mr. KEARNS. About your cost of transportation.

Mr. COFFIN. I mentioned the roads, and I did not mention the buses.

Mr. KEARNS. Do you feel today-I think one of the greatest problems we have is this cost of transportation to the States of school buses. Now a child goes to kindergarten, and the mother gets up in the morning, and gets the child dressed and then the bus picks up the child and takes the child to the school.

I worked in education a long time, and I walked 32 blocks to school. You can walk out to Sears-Roebuck in Wisconsin Avenue today and keep up a cadence of 120 steps.

Mr. COFFIN. No, you won't, I don't think that I will keep up with

you.

Mr. KEARNS. We are making children too soft, and they are taken to school and they are taken home from school.

Mr. COFFIN. May I point out to the gentleman this factor: The best kind of education that we can provide our children in a State like Maine

Mr. KEARNS. And you have a different problem than I do in Pennsylvania, and I realize that.

Mr. COFFIN. The best education is going to be to get a good school to serve a large area, and where we should expect the child to walk a mile to the little road school-house, if it is going to be 10 miles he has to have transportation. This new program that we have in Maine, where it involves all of these communities, that is exactly the effect.

Mr. KEARNS. I thought that your statement was very good, and I appreciate your forthrightness, and I am glad that we have a few people of the press left here, because you know the only reason we aren't building schoolhouses, it isn't this side of the aisle alone, or that side of the aisle alone, but it is because people did not believe in a philosophy or a formula that could have worked. All they have been doing, here, that side of the aisle, and this side of the aisle, is fighting a formula. It is not the issue, Mr. Chairman, and we all agree we should build schoolhouses, and we have been fighting formulas here for years, and I cannot understand, with the intelligence that we have on this committee, why we cannot sit down and take Mr. Bailey's bill, and mine, and we introduced it in the 84th Congress, and the whole thing is all over. But you see, it didn't go far enough, and the NEA did not get their foot in the door through our bill, and all we were doing was building schoolhouses, and when you don't please the NEA, you can't write a bill up here, that is all. And I am a member of the NEA.

That is all.

Mr. THOMPSON. Does the gentleman from West Virginia have any questions?

Mr. BAILEY. I have no comments.

Mr. THOMPSON. I thank our colleague from Maine very much. Mr. COFFIN. I thank the committee and it has been a pleasure and I wish you every success in the labors that face you.

Mr. THOMPSON. Our next witness will be Mr. Edelman, from the office of the State comptroller of New York State, who will present to us the statement of the honorable Arthur Levitt, the comptroller of the State of New York.

You may proceed. Mr. Edelman.

STATEMENT OF ARTHUR LEVITT, STATE COMPTROLLER, STATE OF NEW YORK, PRESENTED BY EDWARD EDELMAN, OFFICE OF THE STATE COMPTROLLER, STATE OF NEW YORK

Mr. EDELMAN. Mr. Chairman and members of the subcommittee, for the record I am Edward Edelman, of Scarsdale, N.Y., a consultant on State and municipal finances, and I was also director of the Governor's committee on the marketing of school bonds. From 1938 to 1951 I was Chief Counsel of the Public Agency Branch and special bond counsel to RFC in Washington.

I have with me a statement of Mr. Arthur Levitt, the comptroller of the State of New York, which is entitled "The Need for Federal Aid for School Construction."

Mr. Levitt also was the chairman of the Governor's committee on the marketing of school bonds. I respectfully request your permission to read his statement. Mr. Levitt expected to be here personally this morning, to make the statement, but was detained by a legislative problem in New York State.

Mr. THOMPSON. You may proceed, Mr. Edelman.

Mr. EDELMAN. "The Need for Federal Education for School Construction" is the title.

This memorandum is submitted in support of legislation pending before the Education and Labor Committee of the House of Representatives which would provide for Federal assistance to the States for school construction.

The present cost of the Nation's schools is more than $9 billion a year, and based on past performance, and present forecasts, this cost will more than double in the next 10 years. Any such radical jump in costs will place an intolerable burden on the local taxpayers. I do not think real property is in a position to bear these added burdens. The ownership of real property has little bearing today on the overall ability of the taxpayer to pay taxes.

The States and the local public bodies cannot afford to carry the burden of education by themselves. The States now pay from State taxes approximately 40 percent of the total cost of public elementary and secondary schools. Most of this is paid for the current expenses of operating schools for teachers' salaries and other operating expenses. I do not think that the States and local public bodies can carry the total burden.

The Eisenhower administration's bill, H.R. 4268, would authorize the Federal Government to commit to pay one-half the debt service on $600 million obligations to be issued each year by the local school districts in the various States.

The plan set forth in this bill is a very cumbersome and complicated one, which was designed not so much to hasten the construction of schools, but to lessen the impact of the program on the Federal budget during the next few years. Costs of the program would be spread over the 20 to 30 years that the school district bonds issued under the program would be outstanding. The immediate budget impact of the program would be slight, primarily for the costs of administering the act.

The act would provide for a hybrid type of school district bond which would have certain security features differing from those of other school district obligations issued in the same State. This additional security would come from the Federal commitment to pay 50 percent of the debt service on the bonds under certain conditions. The State would also be required to make an agreement to pay the other 50 percent of the debt service on the same bonds.

This administration bill, in my opinion, would provide little relief for needy school districts, and would, because of its requirement for extraordinary State enabling legislation, raise difficult problems for all of the States.

It is my opinion that certain other bills pending before your committee have much more in their favor than the administration's bill. Grants to the States are needed to provide an effective answer to the school problem.

Grants-in-aid would bring relief to the poorer school districts, and would enable many of them to finance the balance of their construction requirements. Climbing real estate taxes have had their greatest impact on the people in the suburbs. In the small communities scattered throughout the suburban New York metropolitan area, the largest share of the local tax money goes to support the public school. But there is little likelihood that these local communities will find they can levy sufficient taxes to pay for the construction and upkeep of decent schools in the future.

Federal grants for school construction should be appropriated to the States to be distributed to local school districts. If total grants for this purpose are to bear any relationship to the magnitude of the need, your committee must study carefully the total authorization which it will recommend.

Despite any large Federal aid program the great bulk of the money for schools will continue to come from the States and the local communities. It is clear that any Federal program can only provide a minor percentage of the annual expenditures each year for schools.

For several years I was chairman of the Governor's committee on the marketing of school bonds. This committee studied the problems of the school districts in selling their bonds at reasonable rates under the changing conditions of the bond market, and issued a report making a number of recommendations.

One of the committee's conclusions was that the development of better methods for the marketing of bonds would bring lower interest rates for many of the school districts. The committee recommended the creation of a New York State School Financing Authority which would purchase the bonds of the marginal school districts, particularly during periods of tight money, and would sell its own bonds to raise funds for this purpose.

It would seem to me that a Federal school aid bill should provide for the Federal purchase of school bonds when such bonds are not readily marketable at reasonable rates of interest. The school districts with poorer credit ratings need to find a better place to market their bonds in periods when money is scarce and when even the highest rated school district obligations sell at poor prices.

I feel that any provision for the Federal purchase of school bonds should be limited in scope, since I feel that Federal control over edu