We will start with the property tax and without going into detail, the employment in Tullahoma is centered in the AEDC, in which most if not all of the wind tunnel testing for the space program takes place.

To compare Tullahoma with Alcoa, Tenn., which has a tax base which gives them five times as much property value behind each student in their school system, we feel this is rather sick, and also we can go around the State and take another 10 or 15 city school systems comparable to ours in every way except they do not have the large influx of federally impacted students.

In every instance, their property tax base is larger than ours. I would like to say in relation to a question you asked, if we would lose the impact aid funds or if they were distributed under the proposed formula, it would cost us 77 cents of each $100 of assessed valuation to maintain status quo educational programs.

I would like to talk for a moment on general revenue sharing. We feel the city of Tullahoma is being penalized. The city itself through local funds raised via the property tax supports our school system very well.

However, according to the formula which is used to determine the amount of funds the local governments will receive, money spent for education must first be deducted before a local effort index is maintained.

The city of Tullahoma spends 44 percent of its funds for education. This must be deducted before a local effort index is calculated to determine how much Tullahoma will get. Therefore, Tullahoma received less in general revenue sharing funds than towns no more than 16 or 20 miles away that do not do nearly as much to support education. Chairman PERKINS. That has been the greatest injustice in the world. Mr. KONNERT. We feel that is pretty sick. Without dwelling more on this and belaboring in detail, I would like to conclude by saying that AEDC has been a tremendous asset to Tullahoma. During one of the recent moon shots, when they ran into trouble, we were proud to have citizens who could help them solve the problem.

We would like to see the Government continue to help us provide a quality education for these students.

STATEMENT OF JAMES ROOKS, SUPERINTENDENT OF SCHOOLS, PRINCE GEORGE COUNTY, VA.

Mr. Rooks. Approximately 43 percent of my school population are impact students "A" and "B" and approximately 20 percent of my budget is in impact aid funds at the present time.

Just briefly in answer to two of the questions you asked. I am cochairman of the group of Virginia superintendents with Dr. Kelly, I feel I can speak for all when we say we feel one of the major problems at the present time is the lack of full funding, particularly when it comes in the middle of a budget year for funds that have already been budgeted and a good bit spent.

Second, in answer to your question about the special revenue sharing, I personally feel that in the State of Virginia, unless this money could come with direct implications that it must on a per pupil basis be allocated for impact aid to the areas of Virginia, we would lose money under such a proposition.

Thank you, Mr. Chairman.

Chairman PERKINS. Any further statements? Identify yourself and proceed.

STATEMENT OF HARRY BOWEN, WAUKEGAN PUBLIC SCHOOLS, ILLINOIS

Mr. BOWEN. My name is Harry Bowen, Waukegan Public Schools, Illinois. I have testimony in, but I would like to speak in behalf of schools in Lake County. We have within our area, Glenview, Downey Hospital, Great Lakes Naval Base, and Fort Sheridan.

We have a feeling that it seems to appear that we are trying to divide and conquer from Members elsewhere in Congress. We fully believe that "A", "B", and "C" students all should be funded at 100 percent, because in our area, it would be quite difficult to draw a line down the middle of the road and say you fund this or you fund this one over here, because these people, either military or employees, work on both sides of the road.

So, you cannot distinguish and say just because this child goes to school in our district or he goes to school in Libertyville or other places, that you can divide these people.

Most of all, one of the questions that was asked, where does the money come from. We have talked about it and we feel with the slowdown in Vietnam, that it would be possible that money would come from there.

We heard the President speak about this prior to his election, at times, that there would be money. So, maybe that is one area. We feel it is an injustice to us if we are going to come out of it with an honorable peace that we are going to rebuild our country that we won an honorable peace with.

Maybe we should help rebuild some of the areas in education that we feel children really need an education, and they are not getting it. Chairman PERKINS. Thank you very much. Do you have any questions?

Mr. CROSS. The gentleman from China Lake talked about the Indian Wells and adjacent district. Indian Wells is the adjacent district? Mr. SPEARS. Yes.

Mr. CROSS. One of the possible reforms that have been discussed with impact aid is the possibility of where money crosses district lines of only allowing the money to cross the district line to be assessed at pupil valuation. I would assume in Indian Wells that the district would still get that money, because without anything else, they do not have a tax base.

Mr. SPEARS. They do have a tax base, but it is rather low naturally because of the loss of all of the business property. But, I did not quite understand your statement about crossing lines.

Mr. CROSS. One of the problems is the "B"-out if you understand the term. "B"-in and "A" are less of a conceptual problem than the "B"

out.

One suggestion for reform is that you only pay money on "B"-out if the district is a poor district, rather than that is determinedMr. SPEARS. They are less than the statewide average.

Mr. CROSS. In this case that means Indian Wells would get the money, whereas Montgomery County would not.

Mr. SPEARS. I think that would be a partially successful solution to the problem. Yes; I would agree with you on that.

Mr. CROSS. The gentleman from South Carolina mentioned the problems of funding there. As I recall, South Carolina has a rather large State share of the school finances, somewhere in 70 or 80 percentile. isn't it?

Mr. TODD. Probably two-thirds I think would. Speaking of the "B”in and "B"-out aspect that you have, South Carolina approximately 20 years ago had in excess of 1,500 school districts. At the present time we have less than 100 school districts.

Charleston County, of course, with the airbase and the navy yard and Polaris missile bases, we recently consolidated eight school districts into one 4 or 5 years ago. Some of our adjoining county's school districts, Dorchester County and Bertwin County, practically all of their 874 pupils are category "B" pupils.

You, of course, could have a school district that would cross county lines. If you tried to make a distinction between a "B"-in and a "B"out, there of course would be nothing that would prevent the school districts in Charleston County and adjacent counties from merging into one district so all pupils would be "B"-in pupils, or that would thwart any intent of the law you might have in trying to draw a distinction between "B"-in and "B"-out pupils.

I think that since this is not categorically but does follow the child, I think regardless of where you find the child, it is only right that the Federal Government pay its share of educating that child.

These bedroom communities in the adjacent counties, Dorchester and Bertwin County, would not exist were it not for the large military installations in Charleston County, and I think it is only right and proper that the Federal Government pay for the education of these children because they would not be there but for these large military installations.

Mr. CROSS. Let me finish my thought. You already have two-thirds of the money coming from the State and in most States, the State share is increasing as States react to Sorrento-Rodriquiz type of claims.

There are lawsuits in almost every State. As you move toward full State funding, the rationale for an impact aid program where the money goes to local districts becomes less and less clear because for one thing, you could well have a situation where you would arrive at the place where impact aid money is the money that makes the district inequitable in a way to make them wealthier.

It seems to me under circumstances of that sort, giving the money for the State, for the State to make the decision would be a more equitable way to treat the "B" and the “A.”

Mr. TODD. I think what you are doing is anticipating or forecasting what direction financial support for education is going to come. Of course, Rodriquiz and Sorrento have not been decided yet.

Whatever equalization formula comes up, I would be surprised if it were entirely divorced from some form of property tax. I think we will have equalization but I think it will still have to be tied in some way to a property tax.

Mr. CROSS. But if you have a statewide property tax, then giving the money to the State is the only corollary to that.

Mr. TODD. Yes, but we are not at that point now. I think this committee and this Congress, unless we can see what direction financing of education is going to take, I think you have no alternative but to continue 874 program in its present state, and then some years in the future, when we see what direction this problem is going to take, then, of course, you will have to look at it again and it might be that 874 in fact would be dismissed.

Mr. CROSS. Hopefully, we will know the Supreme Court decision on Rodriquiz by June or perhaps even earlier.

Mr. TODD. But once the decision comes out, I do not think that is going to decide all of the ramifications that are going to become apparent for financing education at that time.

Mr. CROSS. Now, but perhaps it might mean that you do not want to go ahead with impact aid for another 5 years if there is going to be a lot of turning in that 5-year period.

Mr. TODD. Önce you authorize a program for 5 years in this appropriations committee, whether you appropriate money or not, that is an entirely different matter. Let's go ahead and provide the 5-year authorization and then if we find out that we do not need the money, then let the appropriations committee handle it at that level.

Mr. CROSS. The gentleman from Waukegan who is sitting in the audience talked about public housing section part C. If I understand the public housing law, the decisions on placing public housing are made by the local county-city, whatever the unit of government that has to be.

Conceptionally that is far different from a decision being made by the Federal Government to buy, like West Point, to buy and install a military installation or some other Federal land there.

I assume that when your city of Waukegan made the decision to put in public housing, it realized what it was doing as far as tax.

I think conceptionally the differences between "A," and "B," and "C" particularly between "A" and "B" and "C" over here, are far different and you can not make the same argument on "C" that you can on "B," because a local decision has been involved in that.

Mr. BROWN. When you are in a Government installation, you cannot draw the line up and down the road and say because "B" is in, you cannot separate them. The kids have to go to school and we have to take care of them in the best way we know how.

All I can say is that Public Law 874 in its present form still has the best answer. I have not seen anything that comes any better to replace it.

Mr. CROSS. Again as you move toward greater State assumption of funding, that is going to speak to that issue.

Mr. BOWEN. And the only other thing I could add is that it is important that these things take place without waiting for the last minute to make a decision that it is not going to be.

We are in the middle now of preparing for the next step. If this is not done, 10 percent of our teaching staff will be on the job market. Mr. CROSS. Thank you.

Chairman PERKINS. Thank you all. You have been very helpful to the committee.

Without objection, I have several statements in my hand that I will deliver to the reporter to include in the record. [The statements referred to follow.]

JEFFERSON COUNTY PUBLIC SCHOOLS, Louisville, Ky., February 20, 1973. To: Hon. CARL D. PERKINS, Chairman, House Education and Labor Committee: This communication is intended to establish a continuing need for federal educational funds in the Jefferson County School District. We are especially concerned with the prospect of elimination or drastic reduction of programs which are helping us to provide for educational needs.

As the chief financial officer of the Jefferson County School District, a system of 96,000 pupils, I have major responsibility for preparation of the school district budget under the direction of the Superintendent of Schools. In the next few minutes I would like to express some concerns over FY 1973 Revised and FY 1974 Proposed funding. Superintendent Richard Van Hoose has approved this presentation.

The Elementary and Secondary Education Act has been a valuable tool in meeting the diverse needs of school children in our system. We have been fortunate in qualifying for several titles under the Act. For example, a counseling and reading program was initiated through Title I. This eventually led to a system wide adoption of these services. We are told that Fiscal 1973 Revised figures, based on growth in pupils, will result in less money for many school districts. The same would be true next year. It would seem to us that action should be taken to add more funds to continue this program.

Under Title II program, we have utilized funds for the establishment of instructional materials centers and the upgrading of our libraries. For Fiscal 1973 we will receive about 3 less than last year. Our $100,000 entitlement must be divided among 96,000 public school pupils and 20,000 nonpublic school pupils. To eliminate this Title in Fiscal 1974 would cause a curtailment in our purchase of these much needed materials.

Title III has brought into our community an innovative center for emotionally disturbed children. As the project supervisor we are in a position to know the benefits from this program. Children have been returned to the regular classroom-others have been moved into more closely structured satellite classes. This program has been validated as an exemplary national award winning project in the area of cost effectiveness, innovativeness and exportability, and general over all effectiveness.

In addition Title III, Section 306 (Discretionary Funds), has assisted us in a complete curriculum revision for our elective quarter plan. This we hope, will be carried forward into a twelve months school year program.

We would also like to enter a strong plea for continuance of NDEA, Title III. Based on Fiscal 1972 appropriations we stand to lose $150,000.00 which is used for equipping new schools and remodeling our older structures. Our five year building program is based on using this source for new equipment. Remodeling plans will be reduced if the Act is not funded.

Finally, the Jefferson County School District has a real concern in the proposed reduction of entitlement under Public Law 874. Our school district first qualified for the program in 1958. We are neighbors to Fort Knox Army Post which brings trailers and low cost housing into the southwestern part of Jefferson County. Also, the Louisville Naval Ordnance Station is within our district. School property tax is not collected for this large installation located in a prime industrial area. PL 874 offsets this loss in property tax revenue.

The information we have received indicates that for category B pupils, only the children whose parents are in the uniformed services would qualify for payment. Our total category B pupils this year will be just under 4,000. Of this 755 will qualify for total reimbursement of $106,372. We stand to lose $452,961. Our entitlement for Fiscal 1972 was $716.761. This figures out to a loss of $6.50 per child, and the money will be hard to replace.

At a time when we are attempting to: (1) implement an extended school year program, (2) meet the needs of 4,000 children requiring special education, and (3) maintain a viable instructional program, this reduction in revenue could entail substantial budgetary reductions. I am sure it is not the intent of this Congress to lower the level of educational opportunity in our district as well as the others throughout the Nation.