PUBLIC LAW 874 FUNDS FOR COLORADO

In Colorado, under Public Law 874, we would get in fiscal year 1967 $11,534,000. If your proposed budget were adopted, that would drop to $4,830,000, or a difference of $6.705 million.

Mr. CARDWELL. That is correct.

Senator ALLOTT. I, of course, have heard from many people in Colorado. There are 62 districts.

I want to point out two things. As Senator Pastore pointed out, your analogy is not compatible because your title I funds, as I understand it, have to go into new programs; is that correct?

Mr. COHEN. That is correct.

Senator ALLOTT. Therefore, they are not compatible when we say we are putting a million dollars more into Alabama or Colorado or any State. You are not talking about the same things.

I want to give you some figures here. Your overall cut under Public Law 874 amounts to about 56 percent, Mr. Secretary. I had one school district come in and speak with me, and I happen to have figures on this school district.

In Colorado, we have a very hard real estate assessment of 30 percent. In other words, our taxes are based upon 30 percent of the actual valuation of the property, and it is a very hard valuation based on real estate prices and exchanges.

We tax ourselves on an average, if my recollection is correct, around 341⁄2 mills for our public schools, not counting our colleges.

This, I think, places us in about the upper 10 percent as far as tax collecting and levying in the United States is concerned so that I think, by any reasonable standards, it can be assumed that the people of Colorado are doing their best to take care of their school situation.

WIDEFIELD SCHOOL DISTRICT, SECURITY, COLO.

The Widefield School District at Security, Colo., is just south of Colorado Springs. It involves Fort Carson, or a good many people associated with Fort Carson, Ent, NORAD, and other defense agencies in and around Colorado Springs.

Their total mill levy today for education in this district is 42.31 mills. If this district were cut on the same basis as your overall cuts, they project that for the purposes for which they are now conducting their schools, with no expansion of school facilities, this one district would have to tax itself to 71.81 mills just to sustain what they have. Now, I know this area very well, I am personally acquainted with it. This is not an area of affluence. This is homes of $10,000, $15,000, and a $20,000 home would be an unusual home. It is a relatively new community. Tax valuation is based on the actual sales there so we know there is no skulduggery going on there in the assessor's office or anywhere else.

Now, these people simply cannot afford to tax themselves to the extent of 71.81 mills for the support of their schools.

If, as the Senator from Rhode Island suggests, it is Congress' intention to phase this out, Congress and the administration, I don't see how you phase it out and give these people a chance to adjust in less than a period of 5 years, and I would say probably it is going to require 10 to phase them out.

Very frankly, if this goes through, the people who have been in my office, both the school officials and the county officials who are very concerned about this, say they have several choices, one of which is to cut down the hours of school each day and foreshorten their school facilities. One would be to simply say to the people who are associated with the military, "You take care of your children." They would have to say that to 5,000 personnel at the Air Force Academy. Roughly, they would have to say to the Air Force Academy, "You take care of your kids because we no longer can do it."

SENATOR ALLOTT'S POSITION

I just don't think, despite the Stanford research study, there is any practical way of doing this and, frankly, I can see no solution. I can see no solution for our 62 districts in Colorado if this cut is sustained. I want to make my own position on it very clear. I shall do everything I can to see that the moneys are reinstated because I can see no way out of it for these people. When we tax ourselves in the very highest bracket in this country to support our schools-and we are taxed pretty well-I don't see how we can sustain a cut like this.

I want to thank the chairman. There are other matters that later I want to talk to the Secretary about.

STATEMENT BY SENATOR COTTON

Senator HILL. Senator Cotton.

Senator COTTON. Yes, I would like to make a preliminary statement. In the first place, back before the formation of the present Department when this impacted area system was first devised, I was politically foolish enough to antagonize many of the school people in my State by saying precisely what you have evidently learned from the study made by Stanford.

I spoke then and in the House Appropriations Committee I voted to hold down the impacted area assistance, because in my own Stateand I am sure it is true in others-chambers of commerce, local civic organizations everybody would come down, cry for an airbase, and other Federal installations. They wanted to get them into their towns to furnish employment. But as soon as they obtained them they came down promptly and wanted aid for their schools because of the increased population.

I thought at that time and said so and nearly lost my political head for saying exactly what at this late date you come in with this study. However, no, no, under the great conception of helping people, the Federal Government being a Christmas tree, everybody voted for the aid to the impacted areas and they went the full way.

Now, the situation has changed. It has changed in this respect. The impacted area funds are among the few Federal funds that go straight into the districts without strings attached and can be used for whatever the pressing need is in that district, whether it is teacher's salaries, more teachers, more buildings, whatever the need in that community is.

Now, repeatedly, year after year, I voted against various Federal aid to education bills. I voted against them because I could not see my way clear to support them. I wanted Federal aid to education but I wanted it to go into the districts with no strings attached.

I recall very clearly that each time we had a Federal aid bill up before the Congress, people working for the bill always came up on my blind side, as I am sure they did with others, and said, "You are not going to get your aid for impacted areas unless you pass this bill, because you are not going to get it separately this year."

When the bill did not pass, I remember one session in the very last week, almost the closing hours of the session, by dint of a tremendous effort on the part of some Senators-I am sure the same is true on the House side-we saved our impacted-area money.

This past year when the Federal aid bill came up I still had this same feeling about it. I felt, worthy as its objectives might be, the new title I benefits are earmarked and in many cases I feel they are earmarked for the fluff and the frosting of education rather than going right straight to the basic needs of education.

For that reason, I was reluctant to vote for it and expected to vote against it as I had in the past.

However, I finally decided to vote for it, one, because I had given up hope of a straight refund to States of a percentage of their direct income tax earmarked for education and not otherwise restricted.

Second, as usual, because it contained renewal of the impacted area fund.

I finally figured out that although my own State would pay more for title I than they were going to get back in title I, I did not like the risk of giving up or losing the impacted-area fund which I repeat goes directly to the districts and can be used for their more pressing needs.

I voted for this bill. Frankly, I regard it as an absolute betrayal when the first thing that happens is that the budget calls for, or the executive calls for, or you call or somebody calls for all or most of the money under title I and proceeds at this late date to chop off half of the impacted area funds on exactly the same ground that some of us talked about when impacted areas first became a fact in the Congress.

EFFECT ON NEW HAMPSHIRE

Twenty-one New Hampshire communities will be cut out entirely of impacted funds if my figures are correct; 29 more will be sharply reduced. The money coming in under title I, as the Senator from Rhode Island has so well said, will not replace them.

Furthermore, under title I, you apply the family income test.

In my State we do not have an income tax so we can have all kinds of people living in the community that have substantial incomes and pay a Federal income tax, but they do not pay 1 red cent into the local maintenance of the schools.

Our State, in distributing State funds, has a formula based on whether a community is rich or poor. In its resources our taxes come largely from real estate.

Under your formula, therefore, in title I, the four poorest school districts in the State of New Hampshire get not a cent. They are cut out entirely because it is based on the family income rather than what the resources are of the community for the support of the schools. Now, impacted area funds, whether they were wise or unwise in their inception, constitute the only direct payment into communities with

m to use those funds where they are most needed for the fundaeds in the schools.

I regret having voted for this education bill and as far as I am concerned you are not taking care of the fundamental needs of my people by giving them all the frills and frosting under title I and taking away the one aid that we have that can be put where it is most needed, and you will reduce impacted funds over my dead body. If there is going to be a reduction, it going to be in title I, as far as I am concerned.

FULL ENTITLEMENT PROBABLY WELCOME BY DEPARTMENT

Senator PASTORE. Would the Senator yield?

Senator COTTON. I yield to the Senator from Rhode Island. Senator PASTORE. We are not going to break the heart of Mr. Gardner or Mr. Cohen if we put this money back. It is just a very bad way of running a railroad. I have never heard them yell or object when we put the money back. I think their hearts are on our side, too. It is just not the way to do it is what I am saying.

PHASING OUT OF PROGRAM

Senator COTTON. What I was saying is certainly not a personal criticism of you gentlemen.

I do want to add that I do not view with much enthusiasm the suggestion of our good friend from Rhode Island that we phase out impacted funds and gradually reduce them because you are gradually reducing aid to education that goes to the heart of education and replacing it by aid to education that goes to desirable but, in my opinion, nonessential purposes.

Senator PASTORE. I merely said if it is going to be the policy of the Congress and the administration to do this, it ought to be done under some system of phasing out. If it is going to happen, that is the way it ought to be.

Mr. GARDNER. May I comment, Mr. Chairman?

Senator HILL. Go ahead, Mr. Secretary.

Mr. GARDNER. Whether or not it is a desirable program

Senator COTTON. I admit it is a highly desirable program under title I. It is only a question of whether it is absolutely essential. I don't want to lose the aid we are getting for essentials.

Mr. GARDNER. I am speaking of the impacted area aid program, which, in my opinion, and in the opinion of most educators, is a program with very grave defects. When educators talk about this program among themselves, they joke and are cynical about it. It seems to me regrettable that when good Federal dollars are going to good school districts that it should be open to public cynicism.

FEDERAL GRANTS FOR EDUCATION

Senator PASTORE. Why do you say that, Doctor? You are a very distinguished educator. In many, many instances the Government will make certain grants in lieu of taxes. Education as you and I know it is the most expensive item in the conduct of Government if we want. to give our children the proper type of education. That is the reason we got into Federal programs.

Basically, the philosophical constitution program was that it has always been a local program and step by step there has been an encroachment, if I may be permitted to use the word, on the Federal

level because we are one Nation, we are one people, and we must give to these people the proper education in order to meet the challenges of tomorrow. That is recognizd and this is a cliche and I do not have to make a speech to you.

Then you have an influx of young families with many shoes to provide. Recognizing this, the Congress felt that something should be done in lieu of taxes and we made these grants. Maybe there was another way of doing it, but to say it is subject to cynicism when this money is being spent to lift up the intellect of our children, how can it be so cynical? How can it be? If the Federal Government is not to be in it at all, you have an argument, but if we are getting into education with Federal help, what better way would there be to have the local people decide how to educate these children?

I do not see the cynicism.

Mr. GARDNER. I am a believer in Federal aid. I think the Federal dollars should flow to these school districts and I think they should flow in such a way that the school districts do not have to resort to pretense, nor should there be inequities between school districts. I cannot believe that we are unable to devise ways to wholly serve that purpose.

Senator PASTORE. You are talking about administration now.

DIRECT REFUND OF TAXES FOR EDUCATION

Senator COTTON. What you said, I think, was directed to me because I spoke so strongly and bluntly, but if you want to go down the line on cynicism, I have a little cynicism.

I, frankly, admit that the formula in the division of the impacted area aid money may be faulty. In the beginning I had grave doubts. about the complete justice and equity of the program, as I stated, and now we are talking about something that is fait accompli, because the bill is passed and we have title I.

However, the one thing that stood out in my mind was if there is any purpose for Federal dollars to be spent, it should be for education. I have always subscribed to that. I have had the crazy idea and have had some support, but was never able to get very far with it of a direct refund, so you would not have a complicated formula. In other words, a direct return of a percentage to the States.

EARMARKING OF FUNDS

My educators and superintendents of schools, when they have come and talked to me over the years about the various aid to education bills, have said to me, and with great frankness, that these new bills are all earmarked, and they have grave imperfections and we would not even be for them except for the fact that unless we get some Federal aid in some form, the people of our districts are not going to raise enough money. They are going to be too frugal in taking care of our school needs. If the Federal Government, collecting vast sums of Federal income tax, returns it to us, then in a sense, Congress is forcing the expenditure of money in local districts.

Even though the State or the district may be paying more in taxes than they are getting back in dollars, at least in impacted area f the dollars are earmarked for education, and that is very logisome cynicism involved when Members of Congress are