(The letter above referred to in its entirety is as follows:)

THE STATE OF WISCONSIN

DEPARTMENT OF PUBLIC INSTRUCTION

MADISON

FEBRUARY 15, 1955.

ANALYSIS OF S. 968

There has not been an opportunity to secure the benefit of legal counsel in this analysis of bill S. 968. Hence this interpretation of its effectiveness so far as Wisconsin is concerned must necessarily be subject to reanalysis and reinterpretation if subsequent legal advice indicates that there has been an error in any of the conclusions.

Title I authorizes Federal purchases of part of the obligations of local educational agencies where such obligations cannot otherwise be marketed at reasonable rates of interest. According to press reports, a rate below 3.8 percent would be deemed reasonable. We have no school-district bonds selling in excess of 3.8 percent. Wisconsin does have school-district obligations in the form of promissory notes where the interest rate exceeds 3.8 percent. It is not believed, however, that obligations other than bonds would qualify.

If the interest rate which would qualify local district obligations were materially reduced, this title I might have real significance to Wisconsin. As it appears in S. 968 it is not believed it would be effective in Wisconsin.

Title II authorizes Federal support, with State participation, of obligations issued by State school building authorities. There is serious constitutional question in Wisconsin whether the State as such can organize or participate in a building authority. Certainly if such legality were to be ultimately established, the procedure of amortization with title passing at the end thereof would require a drastic revision of our State aid laws. Presently no State aid may be paid with capital outlay or debt retirement forming a portion of the basis of the calculation of State aids. If all legal barriers were overcome, this study of title II would still indicate it to be a cumbersome procedure of limited advantage.

Title III authorizes grants to school districts who cannot proceed under either title I or title II because of lack of economic capacity. If this interpretation is correct, Wisconsin would be unable to participate not because of lack of economic capacity, but rather because of economic ability in title I or legal or constitutional question in title II. Hence, no direct grants would be available to Wisconsin under title III.

Title IV authorizes grants to States to assist them in meeting the administrative costs of developing State programs to overcome local financing of school construction. Funds so authorized would be restricted to new programs and would require matching by State funds.

It is readily apparent that S. 968 is of extremely limited applicability and use to Wisconsin. Title I if amended to be practicable has potential utility. Title III represents some possible advantages. Titles II and III appear to be extremely cumbersome and improperly developed in the light of current educational administrative philosophy and contrary to good Federal-State relationships. G. E. WATSON,

Superintendent of Public Instruction.

Mr. FULLER. Now I have a few authorized quotations I have received by telephone and were read back and specifically approved for entrance into the record here.

From State Commissioner E. Allen Batemen, of Utah:

The bill won't help us at all in Utah.

From State Superintendent Thomas G. Pullen, Jr., of Maryland:

S. 968 would be of no advantage to Maryland, and we object to the Federal controls in it.

From State Superintendent Clair M. Taylor, of Michigan:

In general I favor the President's stand for Federal aid for education but I have difficulty interpreting S. 968 as a bill which would carry out the President's purposes.

I think that was the theme of my testimony here.

I suggest amendment by adding the Bennett bill.

Now, Mr. Chairman, the Bennett bill was introduced by Representative Bennett, Republican of Michigan, and it is the KearnsBailey-Humphrey-Ives bill except the term is 4 years and the appropriation is not to exceed $1 billion a year.

From State Commissioner Lewis A. Wilson, of New York.

The administration's bill for Federal assistance for school construction would be of no substantial benefit to New York State.

From State Superintendent Vernon L. Nickell, of Illinois:

If it is possible to use Federal funds under the bill introduced by Senator Dirksen of Illinois (S. 522) and match from local districts in Illinois over all on a 50-50 basis and if the funds could be allocated by the State department of education according to its own priorities of need, then I think the Dirksen bill would be good for Illinois.

I might say the Dirksen bill is identical with the Humphrey-Ives bill, Senate bill 480, and is among the bills which I suggested as desirable alternatives to S. 968. It would meet the conditions stated by Dr. Nickell.

From State Commissioner of Education Finis E. Engleman, of Connecticut:

S. 968 will be of little or no help to Connecticut. It will cause delay and would even be dangerous. Titles 2 and 3 are impossible.

From the State superintendent in Virginia, Dowell J. Howard:

I have received the administration's school construction bill. My interpretations are that the provisions of this bill would be of no advantage to the State of Virginia. In the first place, our counties have no debt limit. The only control they have is the degree to which the people of the county will vote to bond themselves. I know of no school division in Virginia that could not issue bonds at a reasonable rate of interest.

Even if our counties had limitations, it would appear to me to be unsound to provide plans by which they could apparently circumvent our own laws. If money were made available on the basis provided, according to my understanding, the counties could not borrow the, money without a vote of the people. If they required the vote of the people they could in my opinion finance their school construction program cheaper than the proposed plan. They would be in violation of the constitutional provisions if they attempted to borrow the money without the vote of the people from any source other than from our literary fund. If we had from $20 million to $30 million additional in our literary fund itself, with the willingness of many of the school divisions to vote bonds, we would have funds of tremendous aid to the localities in school building construction. It appears to me that whoever wrote the bill certainly did not have Virginia in mind because I can see no way by which it would be of help.

From the Mississippi State superintendent of education, J. M. Tubb: Mississippi needs assistance in schoolhouse construction but not to the extent of surrendering control of funds that might be allocated. Inclined to stand by council policies and to rely on your judgment in opinion of all four titles.

From Rex Putnam, State superintendent of public instruction in Oregon:

Administration construction bill not at hand

This was a rather early reaction

*** Disapprove on basis of press accounts.

Especially administration by

agency outside State departments of education. Amounts too small and administration expense "too much"

-

I assume it should have read "too much administrative expense."

Will abide by your analysis.

From Arizona the State superintendent of public instruction, C. L. Harkins:

In reference to your telegram-administration school construction program: title 1, not related to Arizona; title 2, unconstitutional; title 3 has possible value; title 4 would definitely help Arizona.

From the State commissioner of education of Minnesota, Dean M. Schweickhard; I shall not read the whole letter, Mr. Chairman, I am trying to save time here:

Title I would not help school districts in Minnesota since their bonding capacity is limited by statute to 50 percent of their assessed valuation, and bonds issued within that limit find a ready market.

Minnesota could not accept provisions of title II without legislative action creating a State school building agency and a very substantial appropriation of funds with which to operate.

Title III is the only title of the bill which offers any workable possibilities in Minnesota, but like the other titles it would require legislative action creating a State school building agency. At the very minimum it is estimated that this would require a State appropriation of $4 million to $5 million per year. (The letter above referred to in its entirety is as follows:)

Dr. EDGAR FULLER,

STATE OF MINNESOTA,
DEPARTMENT OF EDUCATION,
St. Paul, February 15, 1955.

Executive Secretary, National Council of Chief State School Officers,

1201 16th Avenue N. W., Washington 6, D. C.

DEAR ED: Since receiving your messages concerning S. 968, have given it careful study. The following are my reactions:

Title I would not help school districts in Minnesota since their bonding capacity is limited by statute to 50 percent of their assessed valuation, and bonds issued within that limit find a ready market.

Minnesota could not accept provisions of title II without legislative action creating a State school building agency and a very substantial appropriation of funds with which to operate.

Title III is the only title of the bill which offers any workable possibilities in Minnesota, but like the other titles it would require legislative action creating a State school building agency. At the very minimum it is estimated that this would require a state appropriation of $4 million to $5 million per year.

With the remote possibility of Minnesota's qualifying under titles I, II, or III, there would be no use for the provision under title IV since it has to do with administration of building programs under other titles.

I hope these reactions will help you in preparing your testimony before the committee.

Sincerely,

DEAN M. SCHWEICKHARD, State Commissioner of Education.

Mr. FULLER. From Wendell P. Butler, the State superintendent of public instruction of Kentucky:

Your analysis coincides essentially with our analysis. We are extremely anxious that the amount under title 3 be increased so that it will provide some real assistance. We favor title 4 if it will make it possible for us to expand our consultative service in the area of schoolhouse planning and construction.

Here is the one from Wilbur Young, State Superintendent of Public Instruction, Indianapolis, Ind.:

Our legislature is in session and I have not read the administration's school construction bills. There is no such thing as Federal aid without Federal control. If our legislature does what I think they will do, Indiana will not need Federal funds.—Wilbur Young, State superintendent of public instruction, Indianapolis, Ind.

From Alton B. Jones, State Superintendent of Public Instruction, State of Idaho:

Our evaluation of construction bill. Most certain needs improvement. Decidedly complex throughout and too much Federal control. Surely legislation can be written with few and easily applied Federal requirements with protection against fraud.—Alton B. Jones, State superintendent of public instruction.

And from M. D. Collins, State superintendent of schools of Georgia; I shall not read this entire letter either, Mr. Chairman, because it is lengthy.

Title I: Only a small amount of money is involved under this title. For that reason, this section could not be very significant. There may be advantages in some sort of guaranteed ceiling on interest rate, although there is a possibility that such a guaranty might have the effect of raising the rate to the maximum set by this section. I can see no reason for one-half of 1 percent to be added to the interest rate on bonds purchased by the Government (p. 5, lines 21 and 22 of bill).

Title II: A State which sets up an authority similar to the Georgia State School Building Authority could operate very satisfactorily without the plan proposed in this section. This bill will not provide aid in meeting the present emergency. Provisions for Federal control are excessive and not acceptable. Title III: The amount of money set up is too little; too much Federal control. The formula for distribution of funds would penalize the poorer States. would be totally inadequate to meet the need.

It

Title IV: This title should be rewritten as a separate bill to implement the State and White House Conference. The matching provision is questionable. In general, the bill will not provide for the present emergency. Title I might be useful for a long-range plan. We need grants to States on the basis of need, with minimum of Federal control, such as provided in the Hill and Kearns bills. (The letter above referred to in its entirety is as follows:) STATE DEPARTMENT OF EDUCATION, Atlanta, Ga., February 14, 1955.

Dr. EDGAR FULLER,

Executive Secretary, National Council of Chief State School Officers,

Washington, D. C.

DEAR DR. FULLER. Please allow me to thank you for your telegram relative to the school-construction bill. My opinion of the four titles of this bill is as follows:

Title I. Only a small amount of money is involved under this title. For that reason, this section could not be very significant. There may be advantages in some sort of guaranteed ceiling on interest rate, although there is a possibility that such a guaranty might have the effect of raising the rate to the maximum set by this section. I can see no reason for one-half of 1 percent to be added to the interest rate on bonds purchased by the Government (p. 5, lines 21 and 22 of bill).

Title II. A State which sets up an authority similar to the Georgia State School Building Authority could operate very satisfactorily without the plan proposed in this section. This bill will not provide aid in meeting the present emergency. Provisions for Federal control are excessive and not acceptable. Title III. The amount of money set up is too little; too much Federal control. The formula for distribution of funds would penalize the poorer States. would be totally inadequate to meet the need.

It

Title IV. This title should be rewritten as a separate bill to implement the State and White House Conferences. The matching provision is questionable.

In general, the bill will not provide for the present emergency. Title I might be useful for a long-range plan. We need grants to States on the basis of need, with a minimum of Federal control, such as provided in the Hill and Kearns bills. With highest personal regards and best wishes,

Sincerely yours,

M. D. COLLINS, State Superintendent of Schools.

Mr. FULLER. I would like to enter for the record here a letter sent by the State superintendent of Washington, Pearl A. Wanamaker. Her testimony will be given this afternoon, but this covers some additional points.

Chairman HILL. Without objection, it is so ordered. (The letter above referred to is as follows:)

SUPERINTENDENT OF PUBLIC INSTRUCTION,

STATE OF WASHINGTON, Olympia, February 16, 1955.

Dr. EDGAR FULLER,

Executive Secretary, Council of Chief State School Officers,

Washington 6, D. C.

DEAR DR. FULLER: I have sent tonight via airmail-special delivery 50 copies of my statement to the committee concerning S. 968, a copy of which is enclosed. I hope that the 50 copies will reach you in time for presentation.

Enclosed also for your information is a copy of the State superintendent's report on school-building construction from June 1951 through January 1955. The report includes building construction with State assistance from a $40 million bond issue voted in November 1950, and a $20 million bond issue authorized by the legislature in 1953.

Summary statements of facilities provided and financial summary appear on pages 16 through 33. You will note that the financial summary shows also Federal funds applied to these projects. A report of projects financed entirely with Federal and local funds begins on page 170.. A summary of school-building needs projected to 1960 is reported on pages 34 through 46.

I am sending you also a copy of a publication which we prepare for each session of the legislature for reference use of the legislators. The purpose of sending you this booklet is that it contains the school-building construction planned in this State for the 1955-57 biennium. This report is shown beginning on page 50. You will note that the total cost of proposed construction during the ensuing biennium amounts to $123,487,189.52.

Based on our present State School Building Act's matching ratio, this would require $45,128,105.24 in State funds and $78,359,084.28 in local funds. We have requested $30 million from the State legislature to meet the State's obligation in financing school building construction, which, if the legislature makes the $30 million available, still will be $15 million less than the amount needed to match local funds. I also wish to call your attention to the fact that local districts will not be able to raise the total amount of $78,359,084.28 shown in this report as local funds required, due to the fact that 93 of the school districts listed already have reached their maximum bonding capacity. This means that we shall not be able to meet the school building construction needs during the ensuing biennium without Federal assistance. I hope that this information will be helpful.

I deeply regret that I cannot personally present my testimony to the committee; however, this is a very critical time in the Legislature with regard to our appropriation requests, both for basic school support and school building construction aid, and I dare not be away.

With best wishes and kindest personal regards.
Sincerely,

PEARL A. WANAMAKER,

State Superintendent of Public Instruction.

Mr. FULLER. I would like also to enter in the record, Mr. Chairman, a study of distribution of funds which was made by the Council a short time ago.

Chairman HILL. Without objection, it is so ordered.