As part of its effort to balance the federal budget through a second round of funding cuts, the Reagan Administration is recommending an additional $74-million reduction in the impact-aid program.
If the Congress approves the new cutback, the impact-aid program--which has survived the budget-cutting efforts of every president since Dwight D. Eisenhower--will be slashed by 47 percent from its 1981 level of $756.7 million, and the number of districts served will drop from about 4,000 to 329.
The Administration originally requested that the program be cut to a level of $401 million for fiscal year 1982. Congress authorized $475 million instead. Now the Administration wants the House subcommittee responsible for allocating impact-aid funds to adopt President Reagan’s original proposal of last March.
The President’s latest proposals are now being “floated” in Washington in the draft of a joint resolution prepared for Congressional use by the Office of Management and Budget (OMB).
Under the President’s plan, payments would be allowed only to “Super A” districts--those in which 20 percent or more of enrolled students’ families live and work on federal property. There would be no payments to districts “impacted” by children whose parents live in federal housing or live on private property but work on tax-exempt federal land (“Category B” districts.)
Plan Sparks Lawsuit
That first Reagan proposal caused outrage among supporters of impact aid, prompted passage in some states of legislation allowing tuition charges in public schools, and was the source of a “breach-of-contract” lawsuit against the U.S. Education Department by two school districts in New York.
But the program that emerged from this summer’s long budget “reconciliation” process capped impact aid at $475 million for each of the next three fiscal years. Congress’s budget conferees agreed, in the Omnibus Reconciliation Act of 1981 to a three-year phaseout of Category B payments. And they decided that federally operated schools on military property (“Section 6" schools), which were previously supported by the Education Department, would be funded by an additional $75 million from the Defense Department.
OMB’s continuing-resolution proposal includes a provision that no Defense Department funds can be used to pay for Section 6 schools. That restriction would lower the impact-aid total to the $401 million the Administration originally requested and still wants.
Donald J. Clark of the National Association of Federally Impacted Schools, which organizes lobbying efforts of about 1,000 school districts, said he is surprised the Administration is reintroducing a proposal that was rebuffed earlier.
“We thought they realized back in June and July that the proposal would not get through the House side,” he said. “I don’t think there’s any way I can speculate on why they would come back to it now.”
The Administration’s plans will get considerable attention from the school-district representatives who are coming to Washington this week to try to influence the funding formula by which the 1982-83 funds will be disbursed.
The allocation formula, whether the Administration’s proposal is adopted by the House or not, will be developed later this month in the House Appropriations Subcommittee on Labor, Health and Human Services, and Education and Labor headed by William H. Natcher, Democrat of Kentucky.
Donald J. Clark of the National Association of Federally Impacted Schools, which organizes lobbying efforts of about 1,000 school districts, said he is surprised the Administration is reintroducing a proposal that was rebuffed earlier.
“We thought they realized back in June and July that the proposal would not get through the House side,” he said. “I don’t think there’s any way I can speculate on why they would come back to it now.”
The Administration’s plans will get considerable attention from the school-district representatives who are coming to Washington this week to try to influence the funding formula by which the 1982-83 funds will be disbursed.
Allocations to Change
The allocation formula, whether the ministration’s proposal is adopted by the the House or not, will be developed later this month in the House Appropriations Subcommittee on Labor, Health and Human Services, and Education and Labor headed by William H. Natcher, Democrat of Kentucky.
Ordinarily, the work of the education subcommittee would be fairly routine, because a section of the impact-aid law clearly outlines how the funds will be distributed when there are fewer dollars than the districts are legally entitled to. But the cuts were so large this year that there will not be enough money to cover payments under the existing formula, so the committee will have to devise a new one.
Lobbyists are making preparations, interested superintendents are flying to Washington, Congressmen from affected districts are “making recommendations,” and all are coming up with plans for what they see as a “fair” disbursement of the dwindling impact-aid funds.
In Omaha last month, the National Congress of American Indians put together a paper outlining its proposed formula--100-percent funding of A students, with prorated payments to other categories of students paid out of what is left.
In Washington, representatives from the affected groups will meet this week with the chief lobbyist for the impact-aid organization, James W. Maza, to try to agree on an equitable formula that the organization will suggest to Congressman Natcher.
And on Capitol Hill, “there will be a lot of individual grabbing going on,” Mr. Maza said. “A Congressman will write a formula that is very generous to his district and recommend that it be used.”
When it was still assumed that the level of $475 million was the final amount, responses among school officials to the Administration’s cuts ranged from outrage to near-indifference.
In northeastern industrial states with weak tax bases like New York, officials said the proposed cuts would be disastrous. (New York has the largest single recipient of impact aid--New York City, which received more than $19 million in 1981.)
But in states rich in oil and gas like Alaska and New Mexico (receiving $39 million and $26 million respectively in 1981), state officials seem relatively calm.
“The state of New Mexico is looking at a surplus of $83 million for this year,” said Jeanne Knight, director of elementary and secondary education in New Mexico. “Property taxes were reduced in January. We just increased our educational reserve fund from $10 million to $20 million. We will have no problem absorbing these cuts.”
Some state legislatures are more concerned, and have already passed or are considering legislation that would make up for the funding cuts.
Texas has passed a law that gives local school districts the authority to charge federally-associated parents an amount equal to the percentage of local revenues used in the cost of educating the average local child.
Virginia has a law permitting the districts to charge tuition if they do not receive in impact aid at least 50 percent of the cost of educating children who live on federal property.
Maryland was considering a law similar to Virginia’s in its last legislative session, but it was not acted upon and will have to be reintroduced.
North Carolina has a law similar to Virginia’s--with a few key differences. There, districts are required to charge the impact-aid tuition, while in Virginia it is only an option; North Carolina districts are also required to charge people who are “non-domiciliary” (not state residents), whether they actually live on federal property or not.
New Hampshire has had a law since 1973 that allows districts to assess tuition based on the average educational cost per pupil statewide.
Other states are considering such legislation, and in some states, legislation already exists or is planned that will allow the state to make up for the loss of impact aid some other way, or to penalize in some way the federal government for cutting the payments.
Illinois was considering a law in its last legislative session that would allow districts to levy an “educational fee” equal to the difference between state aid and actual per-student educational cost. That law will have to be reintroduced.
Delaware has a law that bars districts from using state and local revenues to educate children who live on federal property.
New Jersey is considering a law requiring the state department of education to “negotiate a contract with the appropriate federal agencies for children who live on federal property and attend local public schools.”
California officials looked into the possibility of charging tuition and decided it would be “constitutionally dubious,” according to H. David Fish, director of special projects for the San Diego Unified School District.
“We are talking about a possible loss of $60 million dollars in California, and the state can’t cover this loss because of Proposition 13,” he said. “So we’re looking at any possible source of revenue to cover the bill. What is happening here is: certain loopholes that have benefited certain individuals unfairly are being closed.”
“Certain individuals” are servicemen, who have not had to pay state income tax in the past because of California’s tax laws, among the few such state laws to exempt members of the military stationed within state boundaries.
A bill to be introduced in the next legislative session will change that. It will require all California residents to pay state income tax.
Much of the activity in preparation for impact-aid cutbacks is occurring at the local level, where boards and administrators are discussing measures they will take if they do not get what they feel they need.
Districts Act
One highly publicized action has been that of the Fairfax County, Va., school board, which received a payment of almost $8 million in 1981. It recently announced that military personnel at Fort Belvoir in the county would be charged tuition ranging from $2,600 to $16,330 if Congress does not provide enough funds for at least half the cost of educating military children. The Pentagon has said repeatedly that no serviceman will have to pay a tuition charge.
In New York, a spokesman for the two districts which sued the federal government over its earlier, harsher impact-aid cuts, says they will continue with the suit even though some of the funds have been restored.
The suit, filed jointly by the East Meadow Unified School District and the Rome City School District, charges that by cutting impact aid, the federal government is committing a breach of the “unwritten contract” it has to reimburse the districts in which its presence has an impact. “We feel this is the best way to approach it. I don’t think it would be legal to charge tuition, and under no circumstances would I recommend it,” said Martin T. Walsh, superintendent of the East Meadow school district.
Observers expect additional angry reactions from affected school systems, as word of Mr. Reagan’s new proposals gets out. Officials will seek to “build a fire under somebody--quick,” as Fairfax County board member James W. Kitchin told The Washington Post.
“This (the Administration’s new cut),” Mr. Maza noted, “will certainly heat things up.”
