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year to year or rather short term of years with no certainty that the lease might continue.

The title II plan would not meet the needs of California school districts in many instances due to the fact that the difficulties of the local districts arise because they have exhausted their bonding capacity and are no longer authorized to issue securities with which to finance additional buildings.

The present California State Allocation Board, which likely could be substituted for the “State school building agency" specified in S. 968, provides funds to the local school districts in whatever amounts are necessary beyond their bonding capacity, and provides a maximum tax rate to be levied to repay the principal and interest. However, if the principal is not entirely liquidated at the end of 30 years, the State of California makes an outright grant to the school district. There is never any question as to where the title will eventually rest. The district assumes responsibility for the building just the same as though it had been built entirely with district funds.

Title III provides that certain grants may be made to school districts if:

(a) The district is unable to sell its obligations to the Commissioner under title I in the amounts needed to construct the facilities, or

(b) The rent to be paid for such facilities would not be comparable to that charged by the State school building agency under agreements set forth under title II.

These 2 provisions seem to indicate that a district which had exhausted its own bonding capacity and had no other resources would be eligible to participate in the total $200 million fund which is applicable for the 3 fiscal years. As a matter of fact, California alone has found it necessary to provide at least $200 million a year to take care of the situations which might fall under (a) and/or (b).

We would not benefit on the part (a) because we can sell our securities and the State would have no difficulty, I am sure, in selling any it might issue. The only situation would be under (b) which would be the part now under which the State of California makes a contribution directly to the district.

While a complete analysis cannot be made of the details of administration, due to the fact that certain operations require regulations, none of which are available at this time, there does appear to be a very sizable amount of discretionary control which can be exercised by the United States Commissioner of Education over the State agency and the local school districts.

And I want to say there, that since the time I have been with the Department of Education, some 8 years, I have had as my responsibility in the Division of Public School Administration to deal with practically every one of these Federal agencies in their operations.

I haven't so much complaint with the law as it is written, but I certainly have a lot with the regulations that are promulgated out of the law. When I made this statement, we had no idea what kind of arrangements are going to be worked out in terms of regulations, and we have had some very difficult problems under former regulations. We believe there is too much opportunity for disagreement and argument and that impossible situations can develop out of those sections.

Something about the California needs:

Data obtained from the State school facilities survey in California shows that there was a total need to provide school housing from the years 1952 to 1959—that is the deficit after meeting the maximum bonding capacity in each district of $676,207,000, which could not be supplied through the normal method of providing funds for school buildings. Toward this amount $285 million has been advanced from State funds, leaving a net deficit at the present time of $391,207,000 to provide the school buildings which California will need by 1959.

The following table shows the anticipated increase in enrollments in California for the years 1953–63, inclusive. This tabulation also shows the estimated number of classrooms which will be required annually to house these children.

In 1953-54 we had 171,227 more children than we had before, which necessitated the construction of 5,189 classrooms.

Chairman Hill. That is at the rate of 33 pupils per classroom.
Dr. WRIGHT. Yes.

Our State plan crowds them in at the rate of 35, which is entirely too high.

In Florida they have to build one school every week. In California we would have to build about 10 to 15 school buildings every week of the 40 weeks during the school year. By 1963, we will need a total of additional classrooms amounting to

a 35,266 in order to take care of the growth of population.

Í realize California is one of the 12 to 14 States that were mentioned a while ago as being one of the wealthier States. It is true we have had probably the greatest migration of people and birth rate in the history of any State in the Union.

In California it took the first 90 years of its growth to get the first million children in school. The second million arrived 13 years later. The third million is anticipated in 7 years. We are now about 142 years into the 7-year period. So we have to take care of, in the next 61/2 years or so, the number of children that we had 90 years to take care of before, or 13 years in the second period.

We have about 20,000 people coming into our State weekly, migrating into the State.

In addition to that we have 15,000 children born every week. The population has increased about 35,000 per week.

As to the number of pupils on half-day sessions, that is shown on the following chart. In October 1952, we had 140,669 children on half-day sessions. The following October we had 164,545, or an increase of 23,876. This last October, it has gone up to 202,177, or an increase of 37,632.

Senator DOUGLAS. That is roughly 1 child out of every 10.

Dr. Wright. Yes. So, in spite of the fact that we have since approximately 1947 built over $1 billion worth of school buildings, we are still not keeping up with the half-day-session problem.

Of this amount, $590 million has been provided by the State of California in addition to all available funds which the districts themselves could raise.

In conclusion, what is needed in a state such as California is some actual cash money made available to the State educational agency to assist in a very material fashion the districts which have long since exhausted their full bonding capacity. S. 968 gives comparatively little direct relief except certain encouragements to get districts to do for themselves the things which in California are already being provided. The burden of responsibility for providing school buildings, as far as the local district level is concerned, comes from common prop; erty taxes. The State school building aid, some of which will be repaid by the districts, comes from some other taxes; however, payments to the State by the local districts come from local property taxes. It seems reasonable that even a State which is as financially well off as California should find it possible to secure funds from some of the tax sources which have been virtually denied the States, due to the fact that the plan of Federal Government taxing almost entirely derives its funds from taxes other than real and personal property taxes.

I have a statement, purely as a matter of information, which is the State school building aid plan in effect in California. It may be of interest to you. I am not particularly desirous of trying to sell that plan. I am not interested in that, but we believe that the plan we have evolved in California is the type of a plan to which Dr. Füller referred, and is referred to in Senate bill s. 5, which relates to the State agency of the State plan.

That plan provides briefly that every district must bond itself up to its full capacity and then the State will come along and give them sufficient additional money to build the school, and then the district is required to pay a fixed tax rate which is approximately the amount of taxes that would be required for maximum bonding capacity, and then at the end of 30 years, if they have not paid off the principal and interest, the State makes an outright grant of the balance.

They have the buildings at the end.

That requires that in our State the attorney general has ruled that to accept a loan from a State, the people must vote by a two-thirds majority, the same as for a bond, to accept that loan. That is on the general theory that no obligations can be incurred by a district without the consent of the people.

I question very much, although I am not an attorney, the possibility of our ever accepting the use of a building on any long-term lease agreement without having that voted by the people under our Constitution, because it virtually obligates them for a 30-year payment unless they take it year by year, and then it is possible certain things could happen that a district could say, "We have no further use for this building.” They could walk off and leave it, if they take it year by year.

That seems to me to be an almost impossible and intolerable situation to face.

Chairman HILL. Have you a copy of your plan, Doctor?
Dr. WRIGHT. Yes.
Chairman HILL. We would like to have it.
Dr. WRIGHT. This is a copy of the plan. It is a digest of it.
Chairman HILL. A digest of the plan?
Dr. WRIGHT. Yes.

Chairman HILL. I think we would like to have it in the record. It might be very helpful to us.

Dr. WRIGHT. It was intended to be attached to that statement.

Chairman HILL. Without objection, the plan will go into the record at this point.

(The plan referred to follows:)

STATE SCHOOL BUILDING AID IN CALIFORNIA

THE PLAN

The purpose of the State school building acts, generally referred to as chapter 1389 and chapter 19, is very similar. The plan requires that school districts shall use all of their own resources before making application to the State for school building aid. The plan also is geared to a cost program to the district comparable to what a full maximum bonding capacity tax rate would require for a fixed number of years. The plan provides that a district, once having made a maximum effort as provided by law and having exhausted all of its own taxing resources, may apply to the State of California for a loan in an amount which together with any local resources will provide the necessary school buildings to house the unhoused children which the district has. The plan also provides that children housed in unsafe and obsolete school buildings are considered to be unhoused and are therefore eligible for assistance.

In general the plan takes into consideration all of the existing law regarding a district's voting its own bonds, constructing its own buildings, and for all intents and purposes having title to the buildings, even though the distrie may be under obligation to the State for repayment over a period of years. Interference with local management and control is kept to a minimum and about the only part that the State has in the picture is to supply the funds which the district lacks in order to provide the school buildings needed.

ELIGIBILITY

To be eligible, a district must have voted 95 percent of its full bonding capacity, which in California is 5 percent of the assessed valuation of the district. If a district has qualified by such vote, it is eligible to receive an allocation from the State. The number of unhoused children is based upon the estimated number of children which the district will have 2 years beyond the date of application, and the square footage allowed is based upon not to exceed 55 square feet per child for grades K-6, 75 squarefeet for grades 7 and 8, and 80 square feet for grades 9–14. From the total number of eligible square feet, which is the number of children times the square footage allowed for the grade level, shall be deducted the number of square feet of acceptable and usable existing building space which the district has. The difference is the number of square feet for which an application may be made.

A district also is required to make available any other available funds which in the opinion of the director of finance can be used toward financing the project before it is eligible for a loan. The sources of these funds may be excessive balances, accumulated building funds, or other budgeted funds which may have been dedicated for school building purposes or which may be available.

ADMINISTRATION AND OPERATION

The State school building aid acts are administered by the department of finance and the department of education. The department of finance generally has to do with all matters dealing with the financial and contract aspects of the program. The department of education has responsibility in the area of educational adequacy needs and approval of the facilities for such construction. The department of education is responsible for determining the number of unhoused children and the facilities which are needed to care for such children.

The State allocation board is the agency which has authority to make allocations of funds to the districts based upon the applications submitted. This board consists of the director of finance as chairman, the superintendent of public instruction, the director of public works, two members of the senate, and two members of the assembly. Allocations are made to districts based upon the cost of providing approved facilities as determined by bids received. Districts are limited in the number of dollars which may be allocated per square foot for various types of construction.

OWNERSHIP AND REPAYMENT

The allocation is made to a school district based on the principle of a loan. The district is required to repay to the State the amount of money which a 30-cent tax rate will produce applied to the assessed valuation of the district obtaining the loan. Such repayment shall include the interest and principal of the loan. The district, through its local responsibility, is required to levy a tax to retire its own bonds. From the 30-cent repayment may be deducted all of the bond tax rate except 10 cents, which has the effect generally of holding the tax rate to a limit of not to exceed 40 cents. Thus, a district that requires a 40-cent tax rate to pay the principal and interest on its own bonds would not be required to make any payment to the State. As the tax rate for local bonds is reduced, the payments to the State are increased.

Repayment of the State funds by the district is made by deducting the necessary amount from the apportionments made to the district for general maintenance and operation. The board of supervisors of the county must then levy a local tax to compensate the district for whatever funds have been deducted at the State level from the district's maintenance and operation moneys.

If at the end of 30 years the district has not met its full payment obligations, the State makes an outright grant of title to the district. As far as the general operation of the plan is concerned, the building is for all intents and purposes the property of the district, and the management of the property at the district level is no different from that of any other property of the district to which there is no State obligation attached.

Senator Douglas. Is the State superintendent of public instruction in California an elective or an appointive officer?

Dr. WRIGHT. He is an elective officer.
Chairman Hill. Elected by the people?
Dr. WRIGHT. Yes, and at a general election.
Senator Douglas. Does he run under any party designation ?
Dr. WRIGHT. Nonpartisan office.

Senator ALLOTT. I might say for the sake of the record, Mr. Chairman, I think the junior Senator from California, who is the sponsor of S. 968, is planning to come up and testify on bel.alf of his bill.

Chairman Hill. We will be very happy to have him.

Doctor, you came a long way to be with us. You crossed the continent, didn't you?

Dr. WRIGHT. Yes: I did. Chairman Hill. It was very fine of you. You have given us a lot of helpful testimony, a very graphic description of the situation in your State. You have made us realize how compelling is the need in your State.

Ďr. WRIGHT. It is very compelling.

Chairman Hill. We all look upon California as one of the really richest States. If the situation in California is such as you have described it, we know pretty well what the situation is in so many of the other States.

Dr. WRIGHT. We are rich, and we are rich in children.

Chairman Hill. You have been most helpful, and we want to thank you and express our deep appreciation, Doctor. You have been

very fine.

Miss Borchardt, we will hear from you Monday morning at 10 o'clock, if that is agreeable.

Miss BORCHARDT. Thank you very much.

Chairman HILL. The committee will stand in recess until 10 o'clock Monday morning. We will meet here in this room Monday morning at 10 o'clock.

(Whereupon, at 5 p. m., the committee stood in recess to reconvene at 10 a.m., Monday, February 21, 1955.)

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