The House is considering a measure that would move administration of the impact-aid program to the Department of the Treasury. Some school officials say the Department of Education is doing a poor job with the program now.
Last week, the House Subcommittee on Early Childhood, Youth, and Families heard testimony from administrators and others who contend the Treasury Department would better manage the program.
“The impact-aid program clearly has suffered within the Department of Education from low priority and sloppy administration,” said Rep. Lee Terry, R-Neb., who introduced a bill March 18 that would transfer administration of impact aid to the Treasury Department. Among its other responsibilities, the department serves as the financial agent for the federal government and oversees fiscal policy.
Rep. Terry and eight district superintendents charged that the Education Department is too slow in issuing grants under the impact-aid program, which has an $864 million appropriation this year. Impact aid provides funding to school districts where federal operations, such as military bases, cut into the local tax base.
“Some school districts are still waiting for fiscal 1999 funds, six months after they were appropriated in October of 1998,” Mr. Terry said. “Chronic computer breakdowns, data-entry errors, and incorrect calculations often delay processing of impact aid.”
The Treasury Department is better equipped to run the program for two reasons, said Carla Martell, a spokeswoman for Mr. Terry. First, at the Treasury, impact aid would no longer have to compete against other priorities in the education budget, she argued. In addition, impact-aid grants already have to be funneled through the Treasury Department, which calculates funding allocations. Because the Treasury and Education departments use different computer systems, that process often bogs down, Ms. Martell said. Some districts that did not receive their payments on time this year have had to borrow money, she added.
The Education Department blamed the delays on new technology put in place to combat the year-2000 glitch.
“In a move to implement a new computer system for disbursing funds, we hit upon some unanticipated glitches, but the problems have been corrected and we are back on track,” Judith Johnson, the acting assistant secretary for elementary and secondary education, said in a statement.
Impact aid is often targeted for cuts by White House and Education Department officials. They argue that Congress loads the program with “pork,” and that impact-aid money would be better spent on programs for all students. (“Critics Set To Fight Plan To Cut Impact-Aid Funding,” April 23, 1997.)
But Rep. Earl Pomeroy, D-N.D., testified last week that the current funding is “woefully inadequate.”
Complicating the lack of money have been recent administrative problems, said Wayne Lett, the superintendent of the 32,000-student Newport News, Va., district. “The past two years have been a budgeting nightmare for many federally connected school districts,” he said. “We feel our fate will be no worse in the Department of Treasury than where it currently resides.”
A version of this article appeared in the March 24, 1999 edition of Education Week as Congressman Wants Treasury To Administer Impact-Aid Program