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