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1,578, 527, 352 185, 726, 909 16, 833, 119, 404 136, 221, 414 37, 797, 654 3,886,909, 707 1, 434, 278, 762 126, 926, 701 77, 737, 309 142, 654, 720 48, 021, 841 110, 167, 338 97, 358, 583 57, 871, 698 153,809, 112 169, 126, 680 232, 290, 765 393, 941, 560 3, 442, 522, 786

38,892, 990 724, 317, 755 141, 194, 498 75, 197, 564 33, 433, 478 963, 444, 439 1,618, 565, 970 1, 201, 088, 653 125, 439. 243 26, 270.639 73, 291, 975

July and October weighted FTE, 1974

29, 360.3018

4, 013.0684 25, 297.9166 5, 497. 2052 70, 525. 4146 183,000. 5652 2, 717.4382 7, 148. 6544 9, 133.4554 16, 448.6970 16, 104.8438

9, 144. 2442

335, 781.6814 4, 526. 5546 2, 304. 1384 139, 284.7550 60, 529.0254 1,815.8104 2, 350.0620 12, 205. 1498 1, 881. 4616 1, 581.3516 3,609, 0822 3,290.8856 4, 678. 7532 4, 901. 4312 7, 374. 4720 8,980.3814 143, 547.0212

4, 108, 4256

11, 490. 3486 10, 405.6850 3, 144.8104 1,035.7864

21, 181.6512 32,818. 4422 28, 602.8100 5,047. 1254 1, 321. 4192 4, 176.0406

Public Law 874,

1973-74

receipts

112, 332

796,600 28, 861 3,604, 147

54, 802

749, 141

67,759

1, 329, 057

1,622, 021 1,524, 617

28, 032

1,813

1,047, 178 18, 890

Liberty

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Dr. FISH. In regard to the report that was presented there was one fact that was mentioned this morning.

With regard to the top 5 percent, we can understand removing the top 5-percent school districts. There are school districts which through quirks of nature, long bus trips and other things like that far exceed a reasonable range.

The bottom 5 percent is still not practicable. Either they are districts which are not spending an adequate number of dollars for children—and this is what this is about or it refers to districts which are nonoperating.

I believe Commissioner Bell used those terms. To clarify what a nonoperating district is, I think we can uncharitably call a lot of these places "tax shelters." They are districts where there are so few students quite often that they find it expedient to pay tuition and they are paying it at such a low rate that they are so far below in expenditures that the only way that they can be identified must be as a tax shelter. They are not possible in a truly equalized system.

I make a recommendation in my testimony regarding equalization. I believe that the approach taken by the administration here has made a basically simple issue complex.

We propose basically that a case-by-case basis be identified, one that shows individual school districts what they are going to receive per student and one which would show why this would vary from a standard.

It could vary because districts have been allowed to increase taxes on an equal rate or the special education needs of children have been adjudged to be identified as true classifications and they require special services as provided for in the law.

The other major point we would like to go at relates to debt service in regard to the basic equalization.

I must refer to San Diego. We are given that Public Law 815 was for the problem of school construction. This is not valid because Public Law 815, if we received the funds, it didn't result in a debt service. The school is built and operating and there was no burden back on the local property taxpayer.

Under the basic concept of Public Law 874 is burden. We did accept the burden. San Diego has 26,000 out of 123,000 federally connected children. The school district just accepted the burden of voting a tax override of $219 million, the eventual total cost of paying for these schools caused by growth.

One of the areas of growth in our city that we are servicing with these funds is the Murphy Canyon naval housing project, where the Navy has built 2,321 units which supply 4,990 students. It is in a growing suburban area where builders of new homes are being charged a surcharge on the cost of construction slated against the developer and actually paid by the homeowner when he moves in. It is several hundred dollars.

The surcharge is being paid because schools are not adjudged to be available.

The irony of the situation is that the way that the Public Law 815 law works it says you can only be paid in terms of a total district en

rollment. That may even disqualify us from receiving funds for a new school in that area.

We have received funds previously for one school in which we have put nearly 2,000 students on a year-round basis. The actual rate of capacity for the school in our 815 application was 1,440.

So when our community accepted this burden it was because of the failure of the Government's activities and the failure of the Government through 815 to supply an adequate relief to the local property taxpayer.

I bring to your attention that I have asked the assessor of San Diego County to give an estimate of the land cost of our property in the city limits and school district of San Diego and the 15 military installations.

Two years ago this was. He identified the land in market value alonewas over $730 million, disregarding any improvement on it. Just imagine how much lower the property tax would have been that our people voted to pay for schools if that land had been on the tax rolls. This is one case where there was a great deal of justice.

I would like to speak later to a fact which came up in the course of the concept paper or rather three factors which did not come up in the concept paper and have not been mentioned here today.

One, we do not believe that any State which has not complied with any court mandate to equalize educational opportunities should even be considered in any way for receiving funds as though they were equalized.

In the previous discussion it was said that this might be possible. It is my understanding now that the new guidelines would remove that potential. It is such an obvious point, I don't want to comment on it further.

Second, the guidelines for the first time, parts of impact aid have been identified as a categorical program.

I would like to make two very basic points about the public housing section. I see that Mrs. Bertha Leviton from New York is in the audience. I assume she will speak to these points further. But I would like to state, one, that public housing is the result of Federal activity. It is a Federal law that created it. It does pose a burden on the local school district that with a categorical limitation tied to the Federal payment for the public housing student, that this should not be considered under any equalization formula. It has not been. Equalization formulas relate to general aid to education.

Second, we interpret congressional intent to mean that this money was to fill in holes in the services that we provide to students in lowincome areas of the school district.

Many school districts, San Diego being one, have found it necessary to supplement with local taxpayers' funds various compensatory education programs. The school district should have the maximum flexibility in meeting these kinds of identified additional services.

Yes, they are for low-income students. But, no, they should not be tied up with the expensive categorical mandates which impose costs above the reimbursements for the Federal programs.

In other words school districts do incur additional expense from compensatory education programs and maybe one of the best uses of

the public housing would be to help meet and help service low-income students in general and not tie it down to extremely expensive categorical limitations. I am sure Ms. Leviton will speak to that further. In the interest of time I will reduce my statements further, except to respond one final minute to the administration's proposal.

I regret that this was brought in because frankly I did not see the Batelle report which endorsed impact aid and the Stanford report which endorsed impact aid can be considered as a major justification for the major surgery that they recommend.

We have always been tarred with the brush of Washington, D.C. This Nation only has one National Capital. There are only a few school districts around here.

I wish everytime they brought up one of these school districts they would have to bring up the city of San Diego, Calif., San Antonio, Tex., Bremerton, Wash., Cape Canaveral, Fla., which is in Brevard County, West Point, N.Y.

have a list that could go on forever. This country is national. It has one National Capital. I think they have a justified case in the school districts around the national capital.

But we are concerned with the disastrous impact at the local level by proposing to reduce budgets by an arbitrary 5 percent.

Our district this year carries a budget reserve of 0.65 percent. We are having CETA's employees who are showing up at 5 in the morning to work.

Our major problem now is finding enough money to buy equipment for them to use.

They are fine people. They are there becaues our employment rate in our community is approaching 11 percent, if it is not beyond it at this point in time.

So we would lose 5 percent of our budget. In 1974 it was 4.9 percent of impact aid. I don't think impact aid, as we have shown, with 26,000 federally connected students, can be considered incidental in San. Diego.

To lose that money would pose an additional 40 cents on our tax rate. I would hate to think of how many people would literally lose their homes. I know that kind of emotional pitch is offensive on occasion. But it is the truth of the matter.

Local property taxpayers would have to absorb the burden or we would start with additional layoffs of those people who we have the power to lay off, those at the lower end of the economic scale in education, teacher aids, the probationary teachers, and so on.

We would lay them off out of district funds and acquire them out of CETA. Something is wrong in the administration's thinking.

Thank you.

Mr. FORD. Thank you very much.

We also have a statement here from the Sierra Sands Unified School District by Mr. Grant Pinney.

Without objection it will be inserted in the record at this point. [Prepared statement of Grant Pinney follows:]

PREPARED STATEMENT OF GRANT PINNEY, SIERRA SANDS UNIFIED SCHOOL DISTRICT,

RIDGECREST, CALIFORNIA

I am Grant Pinney, Assistant Superintendent of the newly formed Sierra Sands Unified School District. This district was formed July 1, 1974 by combining the

China Lake Elementary School District, the Indian Wells Valley School District, the Rand Elementary School District, and a portion of the Kern Union High School District.

The total district is now more than 3,000 square miles in size and is located in the Mojave Desert east of the Sierra Mountain Range in Kern, San Bernardino, and Inyo Counties in California.

This area is isolated from all cities of any size by at least 90 miles. The cost of living and school costs are exceedingly high. One of our highest costs is transportation.

In this area the assessed value of property per pupil is among the lowest in the State of California, so P.L. 874 money is the lifeblood of this school district.

In October 1974 we accounted for 2,300 "A" category students and 2,700 "B" category students out of a total ADA of approximately 6,500 students. Sierra Sands Unified School District is 77% impacted with federally connected students, making this district a "slave" of the Naval Weapons Center at China Lake, California. This school district exists only because the Naval Weapons Center exists. While the enrollment is 77% federally-connected children, the income is only 22% federal money. The people of this area have taxed themselves to the limit. The local tax rate for this school district exceeds $6.00 per $100 of assessed value of the privately-owned property. The total assessed value of the school district is $34 million, while the estimated assessed value of the governmentowned property in the area is over $500 million. If this school district would lose the P.L. 874 income, the $6.00 tax rate would have to be increased to $11.89 per $100 of assessed value to make up the loss in federal funds. Under the present system of financing in California it takes a vote of the people to increase the revenue limit. While the taxpayers in this area have carried the federal impact up to this point, I am sure they would not vote to nearly double the already excessive tax rate.

Thank you for this opportunity to appear before your committee.

Mr. FORD. You have developed, Mr. Eldred, quite an extensive set of figures here on the impact on individual school districts across the country that you have selected out by categories of States.

Have you been in contact with the local administrators of all the school districts that are listed here?

Mr. ELDRED. Yes. They have filled our worksheets themselves. I have more copies for committee use. They are as they came in, no special order, no special selection. And they are still coming in.

It would be my intention to enter these figures.

Mr. FORD. I would ask you to add a couple of columns of your figures here and give us also the additional returns that are generated by your survey.

When we get a place like Huntsville City in Alabama that has $355,000, what does that represent as a percentage of their operating budget? What does that loss represent?

And what happens to the same school districts if you apply the 5percent absorption that the administration is proposing?

Mr. ELDRED. We will be pleased to enter those figures, sir, and it would not be difficult for us.

Mr. FORD. I presume you could probably get them from what you already have. You heard the Commissioner this morning. He still has some of his people here.

I would be glad to offer on behalf of the committee our assistance in arranging for you and a representative group of people from the impact aid districts to sit down with their experts and see if you can't come to an agreement on the criteria to determine to the degree that is possible, before the guidelines are finalized, what the impact consequently on the school districts will be on July 1 if all these formula changes kick in.

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