Lucas, John, president, Association of School Business Officials__. Prepared statement.. McElroy, Alfred Z., chairman, National Advisory Council on the Education of Disadvantaged Children.... Supplemental material_. McFarland, Stanley J., director of Government Relations, National Edu- Randolph, Hon. Jennings, a U.S. Senator from the State of West Virginia Page 1495 1499 1504 1542 1133 1092 1018 1018 Prepared statement_. 1025 Taylor, Daniel B., superintendent of schools, State of West Virginia, representing the Council of Chief State School Officers Association.. 1092 Prepared statement_-_. 1094 Wise, Helen D., president, National Education Association.... 1138 1146 ADDITIONAL INFORMATION Articles, publications, etc. : Elementary and Secondary Education Act, title II: Annual Report 1192 Part II-Tables, an Evaluative Survey Report on ESEA Title II; 1287 Communications to: Cranston, Hon. Alan, a U.S. Senator from the State of California, from Virla R. Krotz, president for the board of directors. National Association of State Boards of Education, Denver, Colo., April 9, 1973. 1629 Pell, Hon. Claiborne, a U.S. Senator from the State of Rhode Island, from C. A. Cromer, executive director, Nebraska State Advisory Council for Vocational Education, May 7, 1973__. 1632 EDUCATION LEGISLATION, 1973 Categorical Education Programs WEDNESDAY, JULY 25, 1973 U.S. SENATE, SUBCOMMITTEE ON EDUCATION, OF THE COMMITTEE ON LABOR AND PUBLIC WELFARE, Washington, D.C. The subcommittee met pursuant to notice, at 10:10 a.m. in room 4232 Dirksen Office Building, Hon. Claiborne Pell, subcommittee chairman, presiding. Present: Senators Pell, Dominick, and Stafford. Senator PELL. The Subcommittee on Education will come to order. Today's hearing is a continuation of the subcommittee's study of the present Federal programs of aid to education, the problems facing education today and hopefully, the possible legislative solutions to those problems. The subcommittee has decided on a different form of hearings for this year. In the past a group would come in and discuss the whole gamut of education programs, Federal and non-Federal alike, at one sitting. This made the record somewhat cumbersome and did not allow for in-depth discussions of particular programs. This year the subcommittee has structured its hearings into subject matter segments. Starting with the administration's special revenue sharing bill, we have entered into a section of hearings on the categorical programs already in existence. We have already discussed reading programs, adult education, education of the gifted and talented, and community schools. Today's hearing, at which four of the national education associations will be testifying, will discuss present categorical programs. Next week, on August 1, we will return to the topic of the administration's special revenue-sharing bill, S. 1319. Following the August recess I hope to turn to the following subjects: Public Law 874, the effectiveness and changes necessary in the title I formula, and school finance. It is my hope that we will be able to conclude hearings on these subjects by the latter part of September so that the Subcommittee on Education can start executive sessions in October. These hearings, while segmented, will cover the gamut of all existing law and introduced legislation. Our first witness today is Mrs. Barbara D. Reimers, president of the National School Boards Association. (1017) STATEMENT OF MRS. BARBARA D. REIMERS, PRESIDENT, NATIONAL SCHOOL BOARDS ASSOCIATION, ACCOMPANIED BY AUGUST W. STEINHILBER, DIRECTOR OF FEDERAL RELATIONS, NATIONAL SCHOOL BOARDS ASSOCIATION, AND MICHAEL A. RESNICK, LEGISLATIVE SPECIALIST, NATIONAL SCHOOL BOARDS ASSOCIATION Mrs. REIMERS. Thank you. Mr. Chairman, I am accompanied by August W. Steinhilber, director of Federal relations, and Michael A. Resnick, legislative specialist to Mr. Steinhilber. The National School Boards Association is the only major education organization representing school board members who are in some areas called school trustees. Throughout the Nation, approximately 84,000 of these individuals are association members. These people, in turn, are responsible for the education of more than 95 percent of all the Nation's public school children. Currently marking its 34th year of service, NSBA is a federation of State school boards associations, with direct local school board affiliates, constituted to strengthen local lay control of education and to work for the improvement of education. Most of these school board members, like yourselves, are elected public officials. Accordingly, they are politically accountable to their constituents for educational policy, fiscal management, and educational productivity of the schools. As lay unsalaried individuals, school board members are in a rather unique position of being able to judge legislative programs purely from the standpoint of public education, without consideration to a professional or vested interest. In so doing, this last April, at its national convention, the membership of the National School Boards Association expressed its views on the Federal role in education by adopting the following resolution: The increased mobility of our population, and the increased dependency upon education for national success and progress demand that the source of revenue supporting public education be more broadly based. Therefore, specific federal legislative proposals should recognize: a) a critical need to increase significantly the level of funding of public education through general aid; b) the value of supplemental categorical programs that speak to legitimate areas of unique federal responsibility and overriding problems of national concern; c) the need to distribute funds on an equitable basis with primary responsibility for expenditure determination to rest with local school districts, and d) that procedure should be developed by state and local school districts to ensure accountability and effective use of federal monies to improve the educational results of all children. Mr. Chairman, with your permission, we would prefer to proceed first with my statement, which outlines the National School Boards Association's position with respect to the existing Federal aid to education programs and our concerns with some of the alternatives presented thereto. Mr. Steinhilber will then follow with his statement, which introduces to the subcommittee an alternative bill, drafted by our staff, which would satisfy those concerns. In addition, we would like to touch upon several points raised by the chairman's bill, S. 1539, which are of particular interest to NSBA. Turning now to the categorical programs, we believe that the subcommittee, in seeking their renewal, is faced with four basic questions to which my statement is specifically directed. They are: (1) To what financial extent is Federal aid to education needed? (2) Is the current program design both an effective and an efficient means of delivering Federal aid? (3) Are there better means of delivering Federal aid? (4) If there are better approaches, do any of the pending bills promise to be the best mechanism for their implementation? TO WHAT EXTENT IS FEDERAL AID TO EDUCATION NEEDED? On March 15 of this year, NSBA testified in depth before the House General Educational Subcommittee on the economics of education funding. I would like to open this question by briefly outlining for the subcommittee the thrust of that testimony. First, in terms of general support for education, the fiscal equalization of education oppotunity among school districts is a major policy question, particularly in some 30 States where law suits are pending. As the States begin the equalization process, they are bound to find that it is not politically or administratively possible to merely transfer funds from those school districts which can afford higher educational expenditures to those which cannot. Rather, the States will have to look for additional revenues with which to "levelup" their poorer districts to the expenditure rate of their wealthier districts. In anticipation of the leveling-up phenomenon, the President's Commission on School Finance found, for example, that nationally it would cost $4.3 billion and 6.9 billion, respectively, for each State to level up to its 80 and 90 percentile expenditure rate. Of course this leveling-up process would not alleviate differenes among the States. Although we are not aware of an official study on this point, we can estimate that once the States level up internally, it would cost an astounding $21 billion to level up the States to the 90th percentile national per pupil expenditure rate. But since, as a condition precedent to achieving equalization, State and local units must maintain existing levels of real educational services, serious consideration has to be given to the matter of inflation. Even a a conservatively estimated inflation rate of 3 percent, State and local units would have to raise $2 billion to maintain an equalized educational service. Turning briefly now to revenue sources, we find that increasingly the taxpayers, as well as Members of Congress, are urging relief from property tax-education's primary revenue source. In this regard, a study conducted for the Advisory Commission on Intergovernmental Relations found that if the elderly and lower-income wage earners were relieved from paying property taxes in excess of 6 percent of personal income, a modest proposal, that tax sources would be cut by $2.5 billion-of which approximately one-half would come from education. The point is, that if it is a desirable policy to offer each child the same educational opportunity as that which was received last year in America's best schools, and to do so with an equal tax burden on his parents-including property tax relief-State and local sources would have to find some $32.5 billion in additional revenues. Second, in addition to providing these additional funds for the general support of education, a truly equalized system of education should recognize special educational needs-at least those needs of children who are educationally disadvantaged or handicapped. In this regard, it would cost $6 billion to provide quality service to 10 million disadvantaged children-of which at least $3 billion would be needed just to begin to make progress for all of these children. Similarly, with respect to handicapped children, and there are court cases pending on the question of whether there is a constitutional obligation on the part of the States to provide them with an education, $7 billion is needed for the children involved. In toto, by adding general educational needs to those special needs which I just described, and subtracting the amounts currently provided at the Federal level, we find that State local units would have to raise over $43 billion in order to provide each child with financially equal educational opportunity. The question raised is can they do it? A staff report prepared for the Advisory Commission on Intergovernmental Relations addressed itself to this subject. It found, that as a function of personal income, if every State taxed itself at the rate of the highest taxing State-which is 16.4 percent in New York-that the States could raise $35 billion. But more realistically, if the States taxed themselves at the rate of the highest taxing State in their region, they could raise $17 billion more than they currently do. However, presumably the States would have to make these untapped funds available for the needs of all governmental services-of which education is but one. Although competing governmental service costs have gradually resulted in a reduction of total State and local tax collections being used for education, we will generously assume that 40 percent of each State's untapped tax capacity would be applied to education. In applying this percentage, and depending upon whether New York's tax rate of 16.4 percent of personal income or the more realistic standard of the highest regional tax rate is used as the measure of untapped tax capacity, State and local sources, if hard pressed, should on a national basis, be able to raise between $7 to $14 billion of the $43 billion needed. In other words, after including the additional resources which are needed, and depending on the test of untapped tax capacity which is used, 30 to 38 percent of the total funds which would then be forthcoming to education could not, on hard economic grounds, be provided by State and local units. It is our position that this difference should be picked up by the Federal level. Indeed, a more realistic appraisal of untapped tax capacity, coupled with the need to advance the progressiveness of the national tax structure as a whole, suggests that the Federal share in education should be closer to 40 percent. Having presented the case for a greatly expanded Federal role in public education, comments with respect to NSBA's attitude toward Federal aid may be helpful. The local school board movement is largely premised on the philosophy that public education should be provided at the Government level which is closest to the people. Recognizing that control often follows the pursestrings, it is with restraint that we ask for Federal assistance of this magnitude. And, it is with one eye focused on the competing interests of local control and financial need that we raise our second question, for example, the design of the existing Federal programs. IS THE CURRENT PROGRAM DESIGN BOTH AN EFFECTIVE AND AN EFFICIENT MEANS OF DELIVERING FEDERAL AID? From the foregoing remarks on the economics of education, it is apparent that a balance of general aid and categorical aid is necessary. Since the scope of today's hearing is confined to the categorical |