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Office of the Superintendent

June, 1977

Mr. Chairman, distinguished members of the Sub-Committee: I want

to thank you for the opportunity to testify before the Committee today. My

name 18 Richard Triplett, and I am Superintendent of Schools at Bellevue,


Located within the Bellevue district are of futt Air Force Base and

Headquarters, Strategic Air Command. As a result, approximately one-third

of the more than 10,000 pupils enrolled in the district are "A" pupils and

another one-third are "B" pupils, practically all of whom are dependents of

those employed at the Air Base. As you undoubtedly know, the parents of the

"A" pupils both live and work on base. The parents of the "B" pupils work

on base and reside in privately owned property within the district.


district is one of the few in the nation which has more than a 25% impaction

of "A" pupils. Such districts, the so-called Super "A" districts, receive

full funding for their "A" pupils but receive the same reductions as other

districts for any "B" pupils.

The PL 874 formula which provides a full rate for the "A" pupil and a half-rate for the "B" pupil has been under attack by the use of the argument that while "A" payments are justified because there is no tax base for such

pupils, the "B" payments are not justified because the parents of "B" pupils

pay taxes on their residences just as anyone else.

The argument while

persuasive, is fallacious. Local taxes throughout the nation come equally

from two sources, one, the place of employment and two, the place of residence.

In the case of the "A" pupil, both sources are lost to the district and the

full rate is justified. In the case of the "B" pupil, one-half of the tax

base is lost, namely the place of employment. Thus, the half-rate for the

94-584 0 - 77 - 10

"B" pupil is justified in exactly the same manner as the full rate for the

"A" pupil.

if, however, it is the decision of the Congress that PL 874 funding

should more properly be diverted to other educational uses, some priorities

of funding must be established for the highly impacted districts and parti

cularly for those serving military installations. The expedient way of just

eliminating the "B" funding would result in economic disaster for highly im

pacted districts which have a high proportion of military "B" pupils, of

which our district is a prime example.

Another argument that is used against "B" funding is that the economic

benefit of a federal installation makes up for the possible loss of "B" fund

ing. To counter this argument in our own case, the following data are provided.

Of futt operates or houses numerous businesses furnishing many services

for military personnel, their dependents and for retirees. Among these are

barber shops, cafeterias, filling stations, restaurants, bowling establish

ments, theater, shoe repair, cleaners and laundry, bank, golf courses, motel,

pharmacies, hospital; and the commissaries and exchanges selling everything

from groceries to lawn mowers and clothing.

All such sales are exempt from

the state sales tax. Offutt's comissaries had total sales of over $24

million and the base exchange had sales of over $14.5 million during 1976,

none of which were subject to sales tax.

Due to the soldiers and Sailors Relief Act, military personnel may

maintain their legal residence in other states and thus may pay income taxes

and personal property taxes to their home state. Thus the apparent wealth

in terms of income and personal property held by the non-residents in the

uni formed services is generally not taxable by the state of Nebraska or the

local sub-divisions of government. For instance, of the 60,000 automobiles

registered in Sarpy County, 22,000 carry non-residence license plates and

are taxed in the state of residence.

This represents a loss of more than

$ 2 million dollars per year to the local taxing agencies in the county,

assuming an annual tax of $100 per vehicle.

The exercise of the principle of exclusive jurisdiction by the Air

Force over the base has the effect of denying to the district a share in the

personal and business property taxes that normally in Nebraska would be assess

ed against privately owned property on the base. (utilities, leased computers, etc. are estimated at a value of several million dollars). Bellevue 18 the

only district in Nebraska in which the principle of exclusive jurisdiction

is applied.

There are eight Nebraska districts which serve the dependents of personnel working at Offutt, all in the Omaha area. Of these eight districte,

three are immediately adjacent to, or encompass, the base and are highly im

pacted. Five are further removed from the base and are more lightly impacted. For this purpose, a highly impacted district is defined as one with a relative

impact of more than 10%, counting an "A" pupil as one pupil, a "B" pupil as one-half pupil and dividing the sum by the total enrollment.

The three districts immediately adjacent to Offutt, the districts with

more than 10% relative impact, display the following characteristics as

compared with the five districts which each have less than 10% relative


Assessed Valuation Per Pupil - (1974-75)

The average assessed valuation per pupil for five lightly impacted

districts is $19,255 as compared with $6,963 for the three highly impacted

districts, almost three times greater. For the state, the average 18

$22,010 per pupil.

Millage Rates - (1976-77)

The average millage rate for the five lightly impacted districts 1s

63.93. For the three highly impacted districts it is 80.20. Approximately

25% greater. For the state as a whole the average is 40.00 mills.

Cost Per Pupil - (1974-75)

The average cost per pupil for the lightly impacted districts is

$1,209, for the highly impacted districts $973. Thus, the lightly impacted

districts expend at a level of 24% greater than the three highly impacted


The state average cost is $1,274 per pupil.

Pupil/Teacher Ratio - (1974-75)

For the lightly impacted districts, the average pupil/teacher ratio

For the highly impacted districts, the pupil/teacher ratio is

20.0. Thus, the highly impacted districts place five percent more pupils

in each classroom.

It 18 apparent that any positive effect which may exist from the

economic benefit resulting from the presence of the federal installation is

not reflected in the financial data for the highly impacted districts. Under

the current level of reducing funding, the three highly impacted districts

have a much lower level of available resources upon which to tax, they make

a much greater effort in terms of mills levied, their costs per pupil are much lower and they place more pupils in each classroom than their more lightly

impacted neighbors which also serve the base. The only apparent conclusion

is that the highly impacted districts are least able to absorb any proposed

reduction in PL 874 funding. Further reductions would either further increase

an already inequitable tax load, or decrease the level of education offered.

It 18, however, apparent that the lightly impacted districts have a less favorable financial structure than the average district in the state. Thus,

even the lesser degree of impaction apparently causes a negative effect upon

school finance measures.

of the 297 unified districts in Nebraska, 30 or approximately 10% are

PL 874 recipients. Of the 30 recipients, eight have a relative impact of

more than 10%. Of the highly impacted districts, three are immediately

adjacent to Offutt, and are those previously referred to, the other five

serve Indian reservations which obviously also lack a tax base because of

the federal or tribal ownership of real property in the districts. In the

case of our own district, the base owns 18% of the land area of the district.

In summary :

(1) The "B" funding can be justified on the same philosophical and

economic basis as can the "A" funding.

(2) In the event further reductions in funding are implemented,

(a) Full funding should be provided districts with a high

relative impaction. In Nebraska, at least, the distinc

tion between high and low relative impaction is at 10%.

(b) Full funding should be provided for districts which serve

military installations because of the effect of the

Soldiers and Sailors Relief Act, the operation of tax

free on-base services and the application of the principle

of exclusive jurisdiction.

(c) A distinction in funding levels should be made between

civilian "B's" and military "B's", with a higher priority

established for military "B'8".


Provisions should be made for an in-lieu of tax for the

land area which 18 occupied by the federal installation

when such ownership exceeds 10% of the district's total


(e) It is doubtful that any formula can be applied equitably

to those few districts which are severely impacted, those

with a relative impaction of greater than 40%, for

example. For such districts, a budget balancing provision

should be written into law which allows the U.S. Commissioner

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