Hawaii Will Not Assume Burden of Federal Impact-Aid Cuts

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In response to cuts in federal impact aid, the Hawaii legislature has passed a bill stating that no state or local tax revenues may be used to educate "federally connected" children if the federal government's share of that cost falls below 50 percent.

The bill could also allow the state to penalize the federal government for the type of delays in impact-aid payments that are causing cash-flow problems in the state this year. According to Lionel M. Aono, budget director of the state department of education, it is his understanding that the second part of Hawaii's 1981-82 payment--originally due in June--will be postponed until September.

But a spokesman in the Education Department's impact aid office said last week that payments are still planned for June.

A "federally connected student" is defined in the bill as a child who resides on federal property or with a parent who is in the armed services and is not a resident of the state.

Had the bill been law during the 1980-81 school year, its provisions would have been put into effect in response to the level of current impact-aid payments, according to Neil Abercrombie, chairman of the Senate education committee and sponsor of the bill.

Based on an average per-pupil expenditure of $2,500 per year, Mr. Abercrombie estimates that the federal government's 50-percent share in 1981-82 would total aproximately $20 million.

The government's total impact-aid payment for the year, however, is expected to be $13.3 million.

Next year, he says, the government's 50-percent share will be $25 million, but based on the impact-aid formula for 1981-82, it is planning to contribute $10.3 million.

Under current formulas, the state will receive $7.9 million in 1983-84.

A spokesman in the Education Department's office of elementary and secondary education said Hawaii's bill "raises the whole question of whether or not they are providing a free public education." In order to be eligible for any impact-aid funding, a school district must be providing that, he noted.

Two Types of Payments

Impact aid goes to school districts in which property-tax exempt federal facilities, such as military bases, are located.

Two basic types of impact-aid payments are currently made: "A" payments for children of parents who live and work on federal property and "B" payments for children of parents who live or work on federal property.

There are 16 "military-related" schools in Hawaii, according to Mr. Abercrombie.

Of Hawaii's 160,000 students, 15,000--slightly over 9 percent--are "A" students. Another 15,000 students are "B" students, but the state does not mind if their benefits are phased out, according to Mr. Abercrombie. "We realize we are going to lose 'B' payments, but we're not arguing that," he said.

Mr. Abercrombie's bill applies only to children of parents who are not state residents.

The federal share of the cost of educating federally connected children in the bill is calculated based on the the total per-capita cost of elementary and secondary education incurred in the fiscal year two years previous to the year the law is implemented, explained its sponsor.

The bill, which has not yet been signed by Gov. George R. Ariyoshi, does not enable the state to charge tuition to parents, but rather directs any cost of educating the students to the federal government for payment.

Under the terms of the bill, by Jan. 31 of each year, the state board of education will present an invoice to the federal government for the cost of educating federally connected children in the state, which is treated as a single school district for finance purposes.

If the government fails to make payment for the same year by May 31, the law goes into effect, and no state tax money can be used to educate the federally connected students.

"This way," Mr. Abercrombie said, "we can assure that the children stay in school, and the government will have to pay 100 percent rather than 50 percent of its share." If the government does not pay, he said, the state would probably take it to court.

'Fiscal Austerity'

"It is impossible for me to understand how a federal government can preach fiscal austerity and then not recogize that failing to cooperate with us is an infinitely more costly venture," Mr. Abercrombie said.

The federal government has informed the state that its impact-aid payment for the second half of the 1981-82 school year will be delayed from this June until next September, says Mr. Aono.

Because of the cash-flow problems the delay will cause, he said, the state legislature last week appropriated a $6.1-million "transition fund" to cover teacher salaries and other expenses until the impact-aid payment is made.

In Hawaii, 88 percent of all school funds come from state revenues--the highest state share of any state in the country.

Vol. 01, Issue 32

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