It will be very expensive, but we hope a good system, based on the oversight of the Montreal case, and individuals, architects, professionals and people who are knowledgeable of the problems of the handicapped are constantly consulted on the design; its total design, elevators, yes, escalators are fine for me and elevators preferable to you, the facility, restrooms you mentioned, water fountains, et cetera. I hope they have examined most of these problems but the Montreal subway shows what happens when you become forgetful.

Thank you very much.

Now we have Mr. Vaughan, right?

Mr. VAUGHAN. Yes, Senator. I am a retired citizen. I belong to several golden age clubs. I also belong to AARP, American Association for Retired Persons, and I will make a little different report than the rest of them have. I will tell you what our club does. It doesn't do much.

Our club is sponsored by the Parks and Recreation Department of Kansas City. I don't know what the other clubs do, but I can tell you what ours does. We have approximately 540 members. We meet once a week. We provide entertainment for our members. The Park Department provides about four or five parties or get-togethers per year. Some of our members do visit nursing homes for entertainment, of which the nursing homes are very much in need.

We retired people are very much in need of cheaper transportation, which should be cheaper than what we have now.

There is something I have never seen anybody bring up is a guarantee by the Government for retirement loans like the Vista Del Rio or the John Knox at Lees Summit or any of those. I want to ask you what guarantee does the person have who buys into these homes. You put down $8,000 or $10,000 or whatever it is, it goes to 16, and you pay someone to run it $150, $200, a monthly plus 160 maybe for meals. What guarantee do these people that are in these homes have that they will be taken care of? I think my idea would be that the Government take them over and act toward them like they do the banks.

We also need more, better, and stricter inspection for nursing homes. I heard one man say that we need full coverage for medicare. I will go along with that.

I want to thank you very much, Senator, for being here.
Senator EAGLETON. Thank you, Mr. Vaughan.

My special thanks to Mr. Boris Steiman who is the regional director of NRTA and AARP. He is the gentleman at the far end of the table. He was very instrumental in putting this panel together for us. We appropriate, Mr. Steiman, your help on this matter. We are deeply appreciative to the entire panel representing these organizations. Very good.

Senator EAGLETON. We have had a very patient preacher with us all morning. I want to introduce the Reverend Truman Dollar of the Kansas City Baptist Temple. I consider Reverend Dollar to be one of the really able and energetic gentlemen in this area in terms of working with and along with elderly people. He is an articulate man who can learn quickly and he has done extraordinarily good work. So, Reverend Dollar, you proceed at your pleasure.

1

STATEMENT OF REV. TRUMAN DOLLAR, KANSAS CITY BAPTIST

TEMPLE

Reverend DOLLAR. Thank you, Senator Eagleton.

I think one thing that will be accomplished, you will probably keep me from a nervous breakdown, after 3 years having found someone to pour out my frustrations to.

I want to read part of my prepared speech and then make comments as I go along.

It is not necessary that statistics related to the increase in the elderly population or the mounting social problems arising from this increase be cited to the members of this subcommittee. Improved medical skills have graciously given longer life to millions of Americans and no one knows better than the Senate Subcommittee on Aging the magnitude of unique problems these elderly citizens face. Concern, lled planning and definitive programs are essential if America sives the needs of our aged.

It is my judgment that the problems are so large and complex that State and local governments cannot adequately meet the needs without Federal assistance. However, at the same time, local governments rust become involved and cooperate in creating viable solutions. Conred private nonprofit agencies at the local level should provide the itiative to implement the programs. These four levels of cooperation. Federal, State, city, and private, if given sufficient thought at the Festeral level can meet the most shameful crisis of an affluent society that has neglected its aged. Initiative must arise from the private secfor, but direction and coordination at the Federal level.

The Kansas City Baptist Temple presently operates two senior etizens homes: Paraclete Manor, a 120-unit, nine-story, section 202 project, located at 4725 Prospect, and Temple Heights Manor, a new section 236, 149-unit project, located at 5420 Blue Ridge Cutoff. I am the president of both corporations and initiated the new project, Temple Heights Manor, since becoming pastor of the Kansas City Baptist Temple. A multitude of problems have come to my attention in both the administration of Paraclete Manor and the construction of Temple Heights Manor. Temple Heights Manor was one of the first section 202 applications converted and funded under the section 236 program.

If I have any expertise at all in this area it is in the field of our economy.

Lere are a number of problems I want to call to your attention, the first and major problem being that the tax burden may finally destroy federally sponsored elderly housing.

Federally sponsored housing for the elderly was specifically designed and funded to operate under the sponsorship of nonprofit corporations that would allow city and county tax abatement. In fact, when the application for Paraclete Manor was made we were required to submit to the Federal Government a written statement to the city and county assessors that we would not be taxed. That was a part of the package. As you know, we were now on the Federal tax roles.

Federal requirements for the management of these corporations are so austere that the abuse of these corporations for private profit is virtually impossible. I am president of two of them and I have never

received cover fee money out of them. The benefits of the program are so obvious that there have been four States that have specifically excluded section 202 projects from city and county taxes by statute. A host of other States allow tax abatement after examination of the corporate structure which is so carefully supervised by the Federal Gov

ernment.

In recent years there has been a growing revenue crisis at the municipal and county levels. Everyone is aware of this. Unfortunately, one solution used by these governments is to tax elderly housing. This policy makes little sense when considered in the context of the whole problem. First, it is a direct tax on the elderly whose fixed incomes can least afford the expense in the days of inflation. Second, and of extreme importance, is that the policy is endangering the success of the entire Federal housing program for the elderly.

The budgets of elderly housing projects, largely determined by Federal guidelines, have not been structured to bear the additional cost of taxation and be economically feasible. Our regional director of the Department of Housing and Urban Development, Bob Long, informs me that two projects in our area are already in serious trouble and two others are approaching a financial crisis. In fact, every section 202 and 236 project in this HUD region is a potential failure because of the burden of city and county taxes. This is the testimony of the regional director of HUD. If these projects are allowed to fail, it will bring the end of federally sponsored elderly housing and will only serve to illustrate the economic shortsightedness of city and county governments. I think at the same time we ought to make some comparisons. Under the Federal statute titled "Slum Clearance, Urban Renewal, and Farm Housing," section 1452(g), urban renewal projects are tax exempt. The State of Missouri following the Federal pattern in its statute "Urban Redevelopment Corporations Law," section 353.110, made statutory tax abatement provisions to qualify for these Federal funds.

As a result the Crown Center project, with an estimated construction cost of $200 million, will be relieved of general ad valorem taxes for a period of 10 years; and for the next 15 years thereafter the assessed tax valuation is not to exceed 50 percent of the true value.

Senator EAGLETON. At the same time these two homes, Paraclete Manor and Temple Heights Manor, are being assessed at their full fair market value?

Reverend DOLLAR. Absolutely. This is the policy. I know because I carried it to the Supreme Court of the State of Missouri and lost. A VOICE. Amen.

Reverend DOLLAR. See, the problem is that the definition of a nonprofit corporation in the State of Missouri differs from the Federal statute of a nonprofit corporation.

Senator EAGLETON. So in order to comply with the Federal funding methods you are out of compliance with what they deem to be the State

Reverend DOLLAR. The State definition is you must be a charitable institution, not simply a nonprofit. It was on this contention that we were ruled ineligible for tax abatement. It has become a crisis proportion right now, very critical.

It may be argued that the economic value of Crown Center makes the tax loss worthwhile. Yet it must also be taken into consideration that there are economic losses to Jackson County if section 202 and 1236 projects fall or are discontinued because of the reluctance of qualified sponsors. This Federal money will no longer flow into this county. As you know, we just spent $2.7 million. The expenditure is something like $15 million of the economy. So there are economic values if the county never receives a penny in taxes for these two projects. I just think it is simply shortsighted and the Federal funds are going to be lost unless something is done.

I would propose that unless the individual States agree to prohibit counties and cities from levying taxes on section 202 and 236 projects for the elderly that all funds be cut off from that State for this type of housing. There is, in fact, a precedent for such a policy, both in the Slum Clearance, Urban Renewal, and Farm Housing Act.

As you know, unless Missouri has a statute in compliance with the Federal statute they cannot receive these funds for urban renewal. The same is true with the Highway Beautification Act. The Federal Government told Missouri it does not have to move the signs, but if it doesn't it will not get any money. I think that is a great idea. I think the Federal Government ought to include in this law in which they grant these funds a simple provision that no section 236 funds for elderly housing will come to the State of Missouri unless the cities and counties comply with the Federal statute. I think it would solve the y problem. It would take about 10 minutes for the State of Missouri to pass a law allowing all of this to be done.

It is tragic, indeed, that while the Federal Government looks upon elderly housing as an opportunity to assist the needy, the cities and counties look upon them as revenue windfalls. The presiding judge of the Jackson County court, George Lehr, has proposed a Homestead Act to exempt the elderly from real estate taxes. We have heard here today testimony that that act has been through the House in Jefferson City, that it is before the Senate. In my judgment the current crisis of Federal projects requires equal attention.

The second problem that is involved in these projects is the absence of long-range planning.

Scores of potential sponsors of elderly housing projects have been either eliminated or discouraged by the abrupt change of direction on the part of the Federal Department of Housing and Urban Development.

Incidentally, when one starts one of these projects he does it because he cares, not because there is money in it. There is no way on earth that my church can benefit from profit. In fact, the Federal statute prohibits us as a nonprofit corporation from receiving any money. The only reason one begins these projects is because he cares. With that under consideration the absence of long-range planning is discouraging or eliminating many sponsors.

The change in the administration was partially responsible for some of the difficulties.

Those whose section 202 applications were in process in the early part of 1969 were faced with a confused administration, without guidelines for converting to section 236, although the administration

had directed this change. Both delays and stringent budget requirements of the new section 236 program discouraged many less persistent sponsors. There was a period of several weeks when HUD officials confessed that they had insufficient direction to produce even an application form. In my own case they moved the regional office from Fort Worth to Kansas City, Kans., and lost my application.

So great was the confusion in the Washington office that on one occasion when my secretary called, the HUD switchboard operator took 211⁄2 hours to locate the director of elderly housing. She did not know his name nor the division in which he was located. During this morass great sums of money and immeasurable man-hours were lost by potential sponsors, architects, and attorneys. The deficiencies of the present section 236 program and the fear of another such abrupt change has stifled the initiative of some of our country's most capable sponsors. I would not right now, in good conscience, advise people to start projects such as we have because of the frustration. Longrange and consistent guidelines are essential elements of a viable elderly housing program. Bipartisan interest and concern should compel all administrations to be fair, consistent, and implement only such programs that support continuity and confidence.

There is a third problem that I think is going to be one of the essential problems that we face, and that is the absence of an adequate philosophy and coordination.

There are now in excess of 28 million citizens-I checked this yesterday with the Federal bureau here-who are over 60 years of age. Their physical, social and economic needs are staggering. There are at the same time some 9,712,000 Americans who derive their living from farming. We have a Secretary of Agriculture at the Cabinet level to direct the farm program. While there are three times as many elderly, there is no single administrator even at the assistant secretary level to coordinate the programs for the elderly. Have we been willing to let elderly programs drag without philosophy or adequate direction because they are politically unorganized? Are hog production and wheat storage more important than the lives of 28 million Americans who have built this great country?

The Federal Government has divided the primary responsibility of meeting the needs of the elderly citizens between two Cabinet administrations: the Department of Housing and Urban Development and the Department of Health, Education, and Welfare. To HUD has been consigned essentially the responsibility for brick and mortar. To HEW the human problems. It seems they have meticulously observed the Biblical injunction "Let not thy left hand know what thy right hand doeth."

Senator, we have been talking today about the act with which we are concerned, the Older Americans Act of 1965, which would be administered under the Health, Education, and Welfare Department. There was a bill called Old Americans Housing Act of 1972, introduced into the House on February 2. Incidentally, on Tuesday of this week it was introduced in the Senate. This bill is, at least, to be administered by HUD [indicating]; this bill by HEW [indicating]. When you read the two bills, you will find many of the same things that your bill is representing are in the HUD bill. I don't understand why there is no coordination of all of these activities. They simply are unwilling to let each other know what they are doing.