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Mr. ELDRED. Thank you, Mr. Chairman, for the opportunity to

add to that statement.

Dr. Fish and I have split up the testimony to be offered.

In the interest of avoiding duplication Dr. Fish will handle the equalization issues and touch on some of the problems on Section C.

I think perhaps the most immediate concern facing many of the local school districts around the country is the economic pressures to relate to the Federal funding and then as they relate to this coming year to the tier levels payment under the authorization and appropriations of 93-380.

Attached to the back of this statement are, first, a table of recaps from school districts around the Nation in the order that I received them. They are coming in daily. It would be our intention to add to these recaps and share this information with you as we go down the road.

I do wish to point out that at the top of the sheet it should be "fiscal year 1974" in the left column and "fiscal year 1975" in the right column. We got carried away there with the financial year's data we asked for from school districts based upon fiscal year 1975.

We interpreted back to 1974 in case the statistics offered this morning by USOE were based upon that year.

A brief look at this recap shows percentage losses from current year levels of payment which is already prorationed running to possibly as high as a 50 percent loss, such as Jackson, Ala.

I have with me by the way in the box on the floor the actual work sheets received from every one of the school districts that is mentioned in the recaps before you.

They also appeared to fall more heavily in the range between 28 to 35 percent. You will find very few districts in the recap showing any gains at all.

The local school districts presently are hard-pressed due to the lack of collection of tax moneys and the unemployment problem facing many of the people in this country forbids them from meeting their tax bills.

The school districts then are further plagued by a financial bind in that the States have a hesitancy to appropriate the funds to support the schools.

To the above problems we now would seem to face the possibility of Federal funds being curtailed through many of the educational agencies because of the activities of the Federal Government.

I have an example in my testimony. Becky Anderson, who is a fictitious person by the way, her facts and the figures are true, represents a good example I think across the Nation of what an effect there could be on an educational agency, should they have Becky.

Becky Anderson is the daughter of Lieutenant Colonel Anderson. She attends the base school at Camp Lejeune, North Carolina. The

Federal Goverment pays for the support of Becky's education some $962.36.

Should for some reason Becky transfer to the Onslow County School District the Federal Government now would only pay toward her education $430.15.

Should Colonel Anderson be transferred to Southeast Asia or some other place the Anderson family would no longer be entitled to base housing and would most likely reside in the community while waiting for the return of Colonel Anderson.

Now for Becky's education the local district would only get $151. Yet Becky is still there as an act of the Federal Government.

It would seem unavoidable here that Becky's education would have to diminish as the school loses the resources to educate her.

It would also seem reasonable that the Federal Government is receiving quite a bargain by having Becky educated in the local community instead of having them educate her themselves.

On top of the above problems for Onslow County the schools face under Public Law 93-380 a further 17 percent loss from the abovementioned payments should the hold-harmless clauses not be funded.

The possible results of decreased impact aid on local school districts range from outright reduction in programs to further refusal by some school districts to even educate the Federal child, which is possible in some of our States.

There are people already in trouble due to economic conditions. We have a fear that an effort to raise local taxes to replace lost Federal dollars would meet with a great deal of hostility directed at the local school boards and perhaps a great deal directed to the peoples' representatives here in Washington who might receive some of the blame for having placed this burden upon them.

I would like to go on briefly and cover some of the other sections of the law.

I should point out that the recaps represented to you today are on Section 3 of the law only. You will find mention in the recaps of figures from California and those figures might conflict with the figures presented to you this morning by the two Congressmen.

But the two Congressmen were speaking only on section 2 and I recapped only on section 3.

Section 2 of the law actually predates the impact aid law itself, going way back to the Landrum Act. Calculations were based upon a loss of assessed valuation coupled with a continuing financial need. There are only about 170 section 2 districts in this country. All of them have lost at least 10 percent of their assessed valuation due to Federal activities. In many of them the loss extends to well over 50 percent and some as high as 80. But there are definitely few that are that high.

Approximately one-third of these 170 school districts receive no money from any other part of the impact aid law.

Section 2, which has been one of the least contoversial over the years, is dealt with very harshly in the new law.

I have there on page 4, in the middle, that the payments prior to 93– 380 were 100 percent of entitlement for section 2.

As we look at payments now under tier 1 and tier 2 of funding we find that even through the end of tier 2 a section 2 district will receive

only 60 cents on the dollar. And the section 2 districts stand no chance of recovering any of this additional money because they did not participate in any of the hold-harmless clauses.

There is I think a distinct need to address some attention to the plight of the section 2 districts. There is a need which I think should be returned to 100 percent funding level at the paragraph 1 level. As you can see by the amounts of money before you, it would cost the entire United States in the coming year approximately only 11 million dollars to take care of those 170 school districts.

Further, should it not be applicable to adjustment at this time, then some manner could be found to indeed hold those districts harmless. Another problem in the new law, inadvertently, I think, is that no post office facilities qualify. We would concur that leased post office facilities by the Government are of questionable qualification as far as impact is concerned.

We do feel, however, that there are large collection facilities in many of our large cities in this country that in that case are definitely a burden on the local school district just as much as any military facility might have been.

Some means needs to be found I think to reinstate at least a segment of post office services.

We find some difficulties and confusion as was expressed by the gentlemen before us when we look at these hold-harmless clauses. It appears that two of these clauses may be included in the initial appropriation bill. It also appears that two of the others must wait a possible supplemental appropriation bill.

I believe the current thinking of USOE is to report all four of these for separate appropriations.

The intent of Congress I believe was truly to hold districts harmless with a change in the formula. We would hope that when they come out with rules and guidelines here the hold-harmless clauses are such as they are worded.

Another problem we see is the distinction between a child's father as to whether he wears a uniform or not.

I have some brief statistics on the bottom of page 5 which show, for the fiscal years of 1966 through 1968 that the Department of Defense converted 114.000 military positions to 92.000 civilian.

There is a gap in here. But for fiscal year 1973 through 1975, 48,000 military positions were converted to 39,000 civilian.

The total of those years means 162,000 military positions converted to 121,000 civilian positions.

The impact of the Federal Government's activities, whether a father is in a uniform or a white shirt or a bathing suit, it matters not, as far as the school district is concerned, when it receives that child.

As we look at the tier levels and the hold-harmless clauses we relate them to the hard economic times we face, we have a fear that should the funds through tier 2 through the hold-harmless provisions be funded, I am not sure that anybody at this point in time can accurately say what that figure is.

However, using USOE's figures alone, I can find estimates that range from $746,472,000 to as high as $884,552,000 for funding through

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