Published Online: April 23, 1997

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Critics Set To Fight Plan To Cut Impact-Aid Funding

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Washington

With all the talk in Washington about increasing education funding, John F. Deegan feels left out.

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Mr. Deegan is the superintendent-elect of the Bellevue, Neb., school district, which stands to lose nearly $6 million--more than 10 percent of its annual operating budget--if President Clinton's proposed budget passes.

In contrast to his plans to boost expenditures on other education programs, the president wants to decrease funding for impact aid--cash payments that reimburse districts for loss of taxes and other revenues due to federal activities, most often the presence of military bases and American Indian reservations. The Bellevue district, for instance, receives about 45 percent of its 9,000 students from families stationed at nearby Offutt Air Force Base.

Executive-branch officials assert that the changes are necessary to reform a pork-laden program. And the White House Office of Management and Budget argues that any funds cut from impact aid would be spent on other education programs that would benefit all students. "It's not as if we're saving money for no reason," said Lawrence J. Haas, a spokesman for the OMB.

Many in Congress, on the other hand, appear skeptical and poised to challenge the president's plan.

At a Senate Appropriations subcommittee hearing last week, one senator berated Department of Education officials for trying to reduce funding for a program that he said has helped his district immensely and gotten money to the classrooms. "Those are real dollars, on the ground, in the classroom," said Sen. Larry E. Craig, R-Idaho.

Regardless, in Bellevue and 1,800 other school districts that receive impact aid, the proposal is a source of concern and frustration.

"The president has missed the point," Mr. Deegan said.

Long-Running Feud

Paying for the program has created an annual push and tug between the White House and Congress almost since impact aid's inception in 1950. Past administrations have wanted to downsize the program and reallocate the money for other education projects, but met resistance from members of Congress who wanted to protect their constituencies. The program has been significantly cut only once, during the Reagan administration.

Now, another round of battle has begun. In the fiscal 1998 budget plan he sent to Congress earlier this year, Mr. Clinton proposed decreasing overall funding of the program by nearly 10 percent, from $730 million to $658 million, and eliminating several eligibility categories. ("Clinton Asks $10 Billion Boost for Education," Feb. 12, 1997.)

This year, Congress may have a little more ammunition for impact aid's defense: Lawmakers from both parties have formed coalitions to stave off the president's proposal. So far, 28 senators and 105 House members who represent districts that receive impact aid have joined.

Lobbying efforts of the House coalition paid off when Republicans took control of Congress in 1995, the same year the coalition was created. Coalition members were able to persuade several key House GOP leaders to switch from calling for impact aid's elimination to defending it as a crucial obligation, said John B. Forkenbrock, the executive director of the National Association of Federally Impacted Schools.

How Cuts Would Fall Out

Secretary of Education Richard W. Riley calls the administration's proposal "a relatively small reduction."

But NAFIS sees it as a greater loss. The group estimates that more than 500 of the 1,800 districts that now receive impact aid would no longer qualify under the Clinton plan.

About 300 of those districts receive aid for property taxes and other revenue lost from civilian properties, such as federal rent-subsidized housing projects. Another 200 districts receive compensation for taxes lost on land that the federal government has taken off the tax rolls, such as national parks or toxic-waste sites. The president's budget would eliminate payments under both categories.

The omb contends that the program has veered from its original purpose, and that payments for unsettled land where children do not live is merely pork for congressional districts.

Mr. Clinton also wants to eliminate aid for students whose families work but do not live on federal property. Under the current formula, a district receives one-tenth the amount for those students that it does for students whose families live on federal property.

"We want to target this program more to districts that really have a major funding burden when it comes to the presence of children who are in the schools but their parents aren't paying taxes toward their education," Mr. Haas said.

But districts still lose much-needed tax dollars from military families not living on a base, Mr. Forkenbrock said. Such a family could claim residency in another state, and also would likely shop at tax-exempt stores on the military base, he said.

The president's budget would also change the funding formula for impact aid. Districts would receive the money based on the state's average per-pupil expenditures, giving an advantage to states with higher costs.

But Mr. Forkenbrock said that would reduce aid to some of the neediest districts, while increasing aid to some of the wealthiest, such as Fairfax County, Va.

Bellevue's Fight

In Nebraska, Mr. Deegan has enlisted the help of his congressman, Rep. Jon Christensen, a Republican and a member of the House impact-aid caucus. "Rest assured that we'll continue to fight," Mr. Christensen said recently.

About 20 percent of the Bellevue district's $52 million operating budget comes from impact aid.

The district would take a double hit under Mr. Clinton's plan: It would lose about $400,000 in aid it receives for students who do not live on the base, and it would lose about $5.5 million in funds for heavily impacted districts, because those students could not be tallied and the district could therefore not meet the required quota.

The omb argues that students living outside military bases do not place a substantial burden on districts. Such students usually live in private housing and directly support local communities, OMB Director Franklin D. Raines wrote in a letter to Mr. Christensen this month.

In the letter, Mr. Raines said the $658 million proposed in the Clinton plan would be enough funding for impact aid. With the proposed cuts in the number of eligible students, the average per-pupil payment for students who live on federal properties would increase from $440 to $1,770. The program would reduce from 1.4 million to 330,000 students, leaving only those from American Indian reservations or whose families live and work on military bases.

Raising local taxes would not be an option for Bellevue to compensate for lost federal aid because the district has a tax-limitation law, Mr. Deegan said. He fears he would be forced to cut school staffing and programs, resulting in overcrowded classes.

At least 100 teachers would have to be laid off just to recoup the lost money for students who do not live on federal property, he added.

Mr. Deegan said he's tired of having to repeatedly plead his case and worry whether the federal dollars will be there another year.

"This is a terrible game that has to be played with military children," he said.

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