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Thank you.

Senator MORSE. Thank you very much. It is difficult for me to sit here and think of a school district that has that many square miles. How many students do you have?

Mr. STEINHOUSER. A few over 20,000 in 14 square miles and about 4 square miles of that is the approach to the Kelly Air Force Base runway with no housing. So that cuts that down to about 10 square miles.

Senator MORSE. Thank you very much.

Mr. Rose?

Mr. Rose. All right. Mr. Minor will take over now.

STATEMENT OF B. F. MINOR, ASSISTANT SUPERINTENDENT OF SCHOOLS, SAN DIEGO, CALIF.

Mr. MINOR. Senator Morse, Senator Yarborough, before starting the record, may I point out that after 22 years of working with these impact problems in school districts, I am reminded that in each of your States I have had two unusual school experiences. For instance, at Waldport, I was there when the floods hurt. I knew Rex Button very well and worked with him. I served in schools in Levelland, Tex., for a while. So in some respects, representing San Diego in California, it is most interesting to hear that there is a continuation, Senator Morse, of your efforts over these years to do something for education and you, Senator, as you have in the past. And the purpose of my statement representing our superintendent of schools, Dr. Dailard, and our board of education, is to point out that continuation of the impact legislation is urgently required insofar as we are concerned.

And may I with your permission pick a few points out of the written statement and request that the statement be filed in the record and not take too much time to read it word for word.

Senator MORSE. Take all the time you want.

Mr. MINOR. San Diego has been mentioned this morning in previous testimony as relating somewhat to proposed amendments, and I should like to cover that later on, but again from the standpoint of emphasis, we feel that this law, Public Law 874, of course, and 815, that these laws have stood the test of time.

As you know, you have conducted hearings, you have had studies since at least 1950, and we feel that what has just been said is so important that if further study can be made as you have indicated. and if the law can be made permanent, that there are improvements needed, there are certain amendments up now that would improve it, and we feel that all of those tie in to this one basic point; namely, that the need for improvement of the laws is but a test of the fact that they have served a very good purpose in the past.

To illustrate that, San Diego city schools has the second largest pupil enrollment on the Pacific coast. We are next to Los Angeles. We are the largest single impacted district as such in terms of numbers of pupils in the United States. We have 27,000 federally connected pupils within our district.

However, our board, our taxpayers, are not looking to the Federal Government to finance the program there. They have just voted an override again, and the fact of the business is that a majority of the

school districts within our county, and many of the impact districts in California, have voted override taxes. They want and do pay their

way.

In summary, we get about 51 percent of our income from local property taxes, about 40 from the State, about 8 from the Federal, mostly from Public Law 874, and about 1 from miscellaneous sources. However, that 8 percent is so vital for these 27,000 youngsters that although our board makes no distinction between a federally connected child and one who is not, it is a real burden to have tax exempt property back of 27,000 pupils in your district when you are voting an override and you have to look very carefully at keeping that tax rate down. So the 8 percent with us is just as important as if we reversed these figures and said it is 40 or 50 or whatever. It is a matter of relatively.

Senator YARBOROUGH. Mr. Chairman, may I interrupt Mr. Minor for a moment? I have had an urgent call from another committee. I want to express my appreciation to you gentlemen for coming here, and I will read your other statements, yours in full, that I have not heard. I am very much interested in this, but I have another committee meeting. They are short of manpower there. Not that I have greater interest in the other subject, but it is one of these cases of necessity. I am very much interested in education.

Senator MORSE. Thank you very much.

Senator YARBOROUGH. I have been on this subcommittee since 1958, and I intend to stay here. I hope to help to do something about education. I hope the members of this panel that I have visited with in the past will continue to work. We have this bill out now for 2-year extensions of the impacted areas law. I hope we can get the 3-year extension before it is all over at this time. And thank you for your interest in coming here and for the contribution you are making, not only to education in your own district, but nationally, in coming here and helping with the national leadership in this problem.

Thank you, Mr. Chairman, for your continued leadership. Mr. ROSE. Thank you, Senator Yarborough. We are always pleased to have your comments.

Mr. MINOR. Senator Morse, going back to the point, our local citizens there do not object to carrying their fair share of the load and thereby contributing substantially to national defense and related problems. Neither will they object to taking care of the youngsters who are of the dependent class. The fact of the business is it has been mentioned here for the record that San Diego is one of the areas mentioned within the report. We would like to point out as food for thought and as a question, wouldn't it be a very good idea to consider seriously, perhaps eliminating the use of the words "depressed area" as such, and thinking in terms of some other qualification for the reasonwe are not objecting to it at all, but the fact that we may have some 16,000 of these youngsters in our area, the district is taking care of them and will continue to do so, but that is but another evidence with us of the problem of Federal impact.

Employment out there as it goes down is largely related to some aspect of national defense because we are a national defense town, what with the Navy and airplane industry we have had and all of the others that you are familiar with, and we continue to be an important military and defense center.

So at any time there is a connection between the dependent child and San Diego, there is also a connection between the basic impact of the Federal Government. I could take time-I won't do it here-and give you exactly the number of properties and ships and show you that if we could get a small part of the assessed valuation involved, there would be no problem on this 8 percent, but this law has stood the test of time. It is solving the problem, and we think as you improve it by these additions, perhaps including criteria for the larger cities where they, too, can help take care of the problem, there will be real improvements made.

So we do not know what to suggest on how to do that. We know that you will know how.

We want to point out again, though, that this law that has stood the test of time is taking care of the basic problem for us and in terms of 27.000 federally connected pupils and about 8 percent of our some $60 million-plus budget.

Now, the testimony that has been presented since 1950 to the committees, many of whom you have handled, Senator Morse, point out that these are payments for services for burdens imposed. We agree with that. And the stress again with us is that the district will take care of the children, that we feel that whenever this much of tax exemption is granted creating a burden that there is an impact that we cannot handle by ourselves and our citizenry, our taxpayers. really appreciate what the Federal Government is doing here. We have never had any control of anything except the dollar. It has been good accounting control.

We have had very good administration from the Office of Education, and we feel that any time the Budget Bureau, the General Accounting Office, or anyone else, as they have in the past, can look at the records and find that this is a clear-cut case of impact which will stand on its own feet. So we would say, and may I close briefly here, that for our board of education out there and the taxpayers, in addition to appreciating what you have done, there is serious need for enactment of the law into a permanent form because we are unable to plan an adequate educational budget when the Federal Government may not pay for services rendered, although we feel that it will. So as these 16,000 dependent children, or whatever the figure will be when it is determined, are being planned for, we are going to use Public Law 874 money that is already written into the law to take care of those children.

However, we know that large cities unable to qualify due to certain eligibility requirements are not in the same shape and their problems are as great if not greater. So since this presents a problem to us and all the other districts each 2 years, we are urgently requesting your consideration of a study that will make it possible to budget at least a year in advance so that we can plan for some of these problems. I want to thank you, and I want to express appreciation of my superintendent, Dr. Dailard, and the board for this opportunity.

(Mr. Minor's prepared statement follows:)

PREPARED STATEMENT OF B. F. MINOR, ASSISTANT SUPERINTENDENT OF SCHOOLS, SAN DIEGO, CALIF.

Located in one of the most rapidly growing metropolitan areas of the Nation, the San Diego Unified School District has the second largest pupil enrollment on the Pacific coast. Significantly, Public Law 874 helps to finance the cost

of approximately 27,000 federally connected pupils within our district, the largest impact on a single school district of the 50 States.

The purpose of this statement is to point out that continuation of the impact legislation is urgently required. A summary of facts is presented:

1. Local citizens do not object to carrying their fair share of the load and thereby contributing substantially to national defense. However, the local taxpayers face an increasing problem because of a narrow tax base. In San Diego, for example, the school tax dollar of 1962-63 comes from the following sources, approximately:

Local property taxes__.
State sources--

Federal sources_.

Miscellaneous sources..

Percent

51

40

8

1

The local taxpayers in San Diego, who are already providing over one-half the cost of education, are at the present time supporting their schools on an override tax. The voters of the district proved their willingness to do their part by voting to exceed the maximum legal tax rate.

Four out of every five districts in San Diego County are operating on an override tax rate. The great majority of these are Federal-impact districts. It should also be noted that approximately 83 percent of the children in California are attending school districts operating on override taxes, voted locally. Thus, the willingness of the local citizens to carry their share of the educational burden is being demonstrated dramatically.

2. San Diego has been and continues to be an important military and defense center. Over recent years, approximately one-half the labor force of the city and county of San Diego has been employed directly on military bases or in defense industries. Not only are approximately 50 percent of the total labor force of about 300,000 persons, defense workers or service-connected, but the immigrantworker families have been young families with a larger number of school-age children than in the normal population.

3. A close relationship exists between school enrollment and Federal activity. Since Public Laws 815 and 874 were first enacted, between 23 and 43 percent of the eligible A.D.A. (exclusive of junior college and adult classes) of the San Diego school district has been federally connected under the definitions of the laws. During the current year, approximately 27,000 or 23 percent of the total 112,109 children are federally connected as defined by law. Those children are federally connected to approximately 89 separate Federal properties, plus approximately 270 Navy ships.

4. The San Diego School District has been one of the fastest growing school districts in the Nation. In June 1964 there were 112,109 pupils enrolled in grades 1-12, as compared with 47,388 in 1950 and 32,423 in 1940. In 24 years the school enrollment has increased more than threefold.

5. The close relationship between school enrollment and Federal activity is evident not only in San Diego, but also throughout California and, in fact, throughout every State in the Union. In California alone, more than 400 school districts are eligible to receive Public Law 874 funds. These districts in attendance include over 50 percent of the schoolchildren of the State. Thus, it is readily evident that any action to change the policies or payments under Public Law 874 will affect the education of over half the children of California.

6. During current times, 970,797 acres, or 35.6 percent of the land, and countless millions of dollars in installations in San Diego County are federally owned and tax exempt. These properties are within local school districts and traditionally tax exempt locally. Thus the laws are of concern to most of the local school districts in San Diego County and are of critical importance to many.

The method used by the Federal Government to meet the obligation has been clearly developed and consistently supported in the testimony before congressional committees since 1950.

Note several unique elements regarding these statements:

1. The burden imposed on local school districts by Federal activities was recognized and defined as a continuing and growing problem.

2. A policy was established by the U.S. Government to provide continuing financial assistance to local school districts for the education of federally connected children whose presence was in the national interest and who were unaccompanied by taxable resources.

3. The financial assistance was related to the burden imposed and not to value of Federal property or the potential of that property to produce revenue if sub

jected to property tax by the local agency. These are payment-for-service laws. 4. The basis of the problem is tax exemption. However, the solution is not in lieu, but payment for burden imposed. The principle for relieving burden is to pay for service. The method of payment is that the Federal dollar shall follow the federally connected child.

5. In a broad sense, Public Laws 874 and 815 express the idea that when one governmental agency (in this case the Federal Government) develops a taxexempt operation within the geographic boundaries of another political subdivision which creates a demand for the services normally provided by the subordinate political subdivision, the operating governmental agency acquires a financial obligation to the degree of its demand for services.

Public Laws 815 and 874 reflect a practical and effective solution to a complex and difficult problem of local school district finance. The funds provided to local districts through these laws were by congressional policy intended as aid to the local taxpayer where federally connected children lived and were being educated. A local school district has only three major sources of income-Federal, State, and local. In California the local source of income is almost exclusively limited to the local tax on secured and unsecured property.

Our local board of education and the taxpayers of San Diego know and appreciate the prior congressional support of these Federal impact programs. There is serious need for enactment of the law into permanent form. We are unable to plan an adequate educational budget when the Federal Government may not pay for services rendered. Each biennium since 1950 has presented this same problem. An early extension of a continuing law is requested.

I wish to express the deep appreciation of our superintendent of schools, Dr. Ralph Dailard, and my own, for your consideration of this vital legislation.

Senator MORSE. We appreciate very much your statement. I have scanned the material that you have inserted in the record. I certainly agree with you that we ought to try to find a substitute for the phrase "depressed area." Semantics are rather important when it comes to a piece of legislation. The fact is that there are areas such as San Diego, Los Angeles, and other areas that are really impacted by a defense economy. In those parts of the country the defense economy predominantly affects the economic life of the people. There are a number of side effects. That is why I stated to the Department of Health, Education, and Welfare, in connection with proposed studies of these two laws, that it should take a look at the rules of thumb that have been laid down.

There has been testimony given here this morning about the 6-percent rule. It places many of our large cities at a disadvantage. Because of the effect of the certain changes in defense operationsperiodic shutdowns, throwing the whole economy out of kilter-in many families, although the head of the family is employed, he is employed at a comparatively low income rate in comparison with similar employment elsewhere in the country. Such factors as the one I have just mentioned cause me to think we may need to take a look to see to what extent we ought to change the 6-percent formula. I would change it. I think it is working a great hardship in many of our large metropolitan areas.

Never lose sight of the child. I keep saying in my work on this subcommittee, "What about the children?" when listening to a witness who has gone off on a theory that bears very little relationship to the children that we are seeking to serve. The fact is that in city after city in this country, there are schools which are located in the low-income sections of those cities in the slum areas of those cities, where there is a great deal of unemployment or where the wage earners are receiving a very low annual income. Those children are not getting a break. They do not get out of those school districts. We do not even stop to realize that you can go to New York City, to Chicago, or to Detroit to find that in some of these large cities of our

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