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In essence what we appear to be doing is, instead of increasing the pie, New York City appears to be getting a smaller and smaller slice of the pie. That pie has remained constant or is increasing only marginally.

One other point I think that should be kept in mind is that the inclusion of public housing pupils as a basis for establishing eligibility for impact aid increased the number of eligible school districts around the Nation.

However, the failure to fund public housing pupils combined with an increase in the number of eligible school districts has had the effect of reducing the amount of impact aid to all districts for the other types of eligible pupils. In other

words you have put us in a confrontation with other districts that have large numbers of A students and double A students.

One other factor that I think bothers us tremendously is that in fiscal year 1976 according to the legislation being proposed it is implied that all funding should be eliminated to districts where the impact represents less than 5 percent of the operating budget.

Obviously if we are talking about a large city like New York or Chicago or one of the other large cities although we are not talking about 5 percent aid we could be talking in terms of tens of millions of dollars.

We think this 5-percent restriction is one that penalizes and undercuts the entire notion of funding students living in public housing projects.

I guess one other factor we want to get at is that the impact aid legislation provides for an entitlement level of only 25 percent in the first tier funds and the second payment excludes any funds for public housing pupils and the likelihood of any funding in the third payment cycle hinges on the amount that is appropriated in excess of the current $65.6 million level.

If students living in public housing were fully funded, at least on a 45-percent level, New York would receive approximately $30.2 million. At a payment rate of only 25 percent in tier 1 the amount is approximately $7.5 million.

I have to constantly throw these figures out because you are measuring this against a loss of $109 million in tax revenues.

Even a $30.2 million funding level would represent only approximately 25 percent of what we would be getting if we were able to tax these properties.

In short, if we were attempting to summarize the position of New York City I think we could do it in the following way.

Point No. 1. We support full funding of impact aid for public housing pupils in fiscal year 1976.

Point No. 2. We are asking that you increase the appropriation for impact aid over the $656 million funding level for 1975 to compensate for public housing pupils.

Point No. 3. We are asking that you reject the President's proposal to eliminate impact aid for all districts in which such aid represents less than 5 percent of the operating budget.

Point No. 4. We are asking that you raise the entitlement level for funding public housing pupils.

Point No. 5. We are asking that you extend the privilege of counting handicapped pupils of military families as 1.5 times a regular child when computing impact aid to include all eligible handicapped pupils.

The higher costs of special education programs are associated with the type of handicap to be serviced and not with the type of family membership

We are caught in a dilemma where we might actually be funding a child of a poor parent living in a public housing project at a level less than we would be funding the child of a general receiving an income in excess of $30,000 a year simply because that child happens to be a member of a military family.

Therefore in the interest of all equity all federally connected handicapped pupils should be counted as equals and at least in the present legislation as 1.5 times a regular child.

On behalf of the chancellor of the city of New York and the board of education, I wish to express my appreciation for this opportunity to share with you these concerns and urge your strong support to implement the five recommendations presented.

Thank you very much.
Mrs. CHISHOLM. Thank you, Dr. Gifford.
Will you be testifying separately?

I was going to call on some other members. But they are not here.

First of all, I would like to ask, Dr. Gifford, what would be the impact of using attendance rates rather than enrollment figures to compute impact aid, the impact aid grant?

Mr. GIFFORD. First of all I think the question is a very important one. Let me attempt to give a little background.

In most of the Federal legislation, especially categorical Federal legislation, we usually receive moneys on the basis of average membership, average attendance.

Let me back up just a little bit. Traditionally when we have asked for Federal categorical aid we have continuously questioned the notion of giving aid on the basis of average daily attendance.

Here is a case where we think this practice is especially pernicious because we are dealing largely with those students because of special problems associated with coming from poor families—and after all you have to be poor to live in public housing projects—they tend not to attend school at the same rate that students let us say coming from middle-class families or children from the families of generals do.

Using average daily attendance penalizes us to the tune of some 10 to 15 percent since children from poor families tend to be in school anywhere from 80 to 85 percent of the time, compared to the children from wealthy families who attend school.

So I guess one of the other reasons that we have to change the legislation is to move from an average daily attendance basis to a basis where we can actually fund children. With the extra money obviously we would be in a position to increase our personnel services and see that the children who are in school receive the services due to them.

Mrs. CHISHOLM. I understand that some of the members of our committee are proposing a 1-year delay in the implementation of the amendments that would mandate the funding of low-rent public housing students.

Can you please tell us what effect this would have on New York City's school budget?

Mr. GIFFORD. It would be a catastrophe. Under limited funding of this particular piece of legislation for impact aid you are talking about a $7.5 million impact on public housing and a $1.4 million impact on nonpublic housing. So you would have a total loss to New York City of $8.9 million.

Even more pernicious, if we were funded at a level we are requesting, just 25 percent in the first tier, we are talking now about a potential loss of $:30.2 million.

I think, Madam Congressperson, that these losses must be considered in conjunction with the potential losses resulting from the changes in ESEA regulations or proposed regulations which would cut New York City down by another $20 million over the cuts it received last year.

In short, as I stated previously in my testimony, we are asking that this Congress appropriate funds over and above the current $656 million level. We think this is crucial if New York City and the large cities are to gain benefits.

Mrs. CHISHOLM. Would you like to add something?

Ms. LEVITSON. If I may I would like to point out that during the discussion in the authorizing legislation there was a conflict concerning continuation of part 1. part C, concentration grants.

The Honorable Jacob Javits led a tremendous fight on our behalf. It appears--it doesn't "appear”-it is self-evident that he was supported by Members of Congress in securing the funding of public housing pupils to replace the elimination of the ESEA, title I, part C concentration grants.

Failure to find the public housing pupils in fiscal vear 1976 will in essence agreed to would replace the part 1-C grants. We lose the grant that presumably the machinery or the vehicle for the replacement of those funds.

So either way we cut the cake we are going to end up losing a very significant portion of the appropriation.

Mrs. CUSTOLY. In other words actually under the new amendments New York City would get approximately $7.5 million in public housing and about $1.4 million for I and B for a total of about $8.9 million

Mr. GIFFORD. Yes.

Mrs. CUSTOLM. New York City's current funding is $1 million for it and B children. The total loss under the new title 1 formula is approximately $27 million this year; correct?

lir. GTrFORD. That is right.

Mrs. CHISHOLM. So if there is no part C funding at all and part A will decrease fundings it means you are going to be hardly able in your city to make up for the total loss of approximately $28 or $29 million under title 1.

Mr. GIFFORD. Absolutely right.

Mrs. CuSiOLM. I am really very sorry that more members of the committee are not here to hear you testify because I think it is very important for them to understand what will happen if they remove or do not include the public housing youngsters under impact aid.

The fact of the matter is that there is much nontaxable property for which the city of New York loses millions of dollars yearly in taxes.

I asked my staff just to draw up for me the 10 cities in this country that have the largest number of public housing youngsters.

We notice that the cities include New York City, Los Angeles, the city of Chicago, Philadelphia, Detroit, Dade County, and Baltimore City.

We found that in all of these cities there is a large number of public housing units, thus making it impossible to collect taxes from this property which then could redound to the benefit of the educational system if such property were taxable.

One of the difficulties that we have with our committee is in the understanding of the entire public housing situation. This is why I am so terribly sad that they are not here because we know the problems well.

I was wondering if Representative Ford-see if Mr. Ford is out there. I know he wants to ask questions because I know he has a keen interest in impact aid and may want to pursue it from another point of view.

Mr. GIFFORD. Madam Congressperson, in the State of New York we are experiencing at this very moment the collapse of probably the major legislative vehicle for placing low-income housing outside of areas where poor people are concentrated.

Specifically I am speaking of the collapse of the Urban Development Corp. You might recall, in fact I believe you were in Albany at the time, when Governor Rockefeller, now the Vice President, established the Urban Development Corp.

UDC was sold to the people of New York and sold to the people of the Nation as a model administrative organization that would lead to a deconcentration of poor people in the major cities.

If one reads the New York Times over the last couple of days we now see the financial autopsy being conducted by the bankers.

I think the fact that a remarkable effort like I'DC has failed to deconcentrate the number of poor people makes this legislation all the more imperative.

The failure of UDC essentially is a message to those of us in large city school systems that the existing governmental mechanisms will not take the pressure off us. In fact, we appear to be the only jurisdictions willing to provide housing for poor people. In fact, the financial mechanisms will not permit us to do otherwise.

When you realize that something like UDC has failed despite all of the help, all of the talent, all of the genius of a large number of people, it makes it just aboslutely imperative that this Congress and this administration recognize that we in the city have no choice. We must provide housing because nobody else will provide it.

When one looks at New York City, where we have $1 billion of tax-exempt assessed property-and I haven't talked about equalization rights because we are talking about property-worth far more than $1 billion, we are losing tax revenues from this to the tune of tens of millions of dollars. In fact, it is $109 million this current year.

When one looks at the prospect for the future one can only see increased concentrations of public housing in the cities, increased drains on tax revenues, increased concentrations of poor people and continued frustration of people who have tried, as UDC has tried, to break up the ghettoization of poor people.

So I would say Madam Congressperson, that the urgency of our request I think has received a stimulus as a result of the disintegration of the Urban Development Corporation.

Mrs. CHISHOLM. Thank you.
Mr. Ford ?

Mr. Ford. Thank you very much, Madam Chairman. Notice I still say "chairman,” not "chairperson." I have worked too long to change that now.

It is nice to see you here, Bertha. For a good many years now we have been talking about how the impact in big cities is.

One of my earliest experiences with this legislation was an amendment, when Adam Powell was chairman of this committee, to bring the big cities into the impact aid program.

The way they used to discriminate against us was a 6-percent requirement if you had more than 25,000 students.

You only had to have 3 percent of your student body if you had less than 25,000 students.

So suddenly if you got big enough, thousands of kids just disappeared and they were no longer problems.

Now they have come up with a new gimmick. What percentage of the actual costs of educating a child if you presume—that is an assumption we have to make—that every child—what is the per-pupil expenditure in New York City ?

Mr. GIFFORD. Approximately $2,000, sir.

Mr. FORD. What is the average that you receive from impact for children?

Mr. GIFFORD. This year we received approximately $1 million in impact aid on top of the base of 56,000 kids in attendance.

Ns. LEVIton. If I may, Congressman, the impact aid that we receive this year will probably be around $31, or $4 million.

On that basis with that enrollment of 1.1 million children it comes out to roughly $31, or $4 a child and we are spending close to or in excess of $2,000.

That represents a very negligible portion of the aid, of the support, that is required.

Mr. FORD. Averages expenditure. I didn't realize it was that dramatic. I think that illustrates that there is no room to further ask for absorption because it is already absorbed to the point of the ridiculous. You are just barely qualifying even when we use a 3 percent. You are counting children and not dollars.

If you compare that 3-point-something dollars against $2,000 then you discover what a dramatic thing happens when you use a percentage of your budget against the percentage of children because your million children qualify you and then when you apply the funds you don't get the money.

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