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After reaching a new agreement with a private Missouri contractor that serves Chapter 1 students in religious schools, the Education Department has dropped its bid for a one-year stay in Missouri's implementation of the U.S. Supreme Court's decision barring Chapter 1 remedial teachers from such schools.

Missouri is one of two states in which the department serves Chapter 1 religious-school students directly through a contractor in a so-called by-pass arrangement because the state constitution prohibits the state from serving religious-school students in their schools.

The Education Department, claiming that sectarian-school students could not receive "equitable" Chapter 1 services unless the instruction was delivered in their classrooms, first invoked the by-pass in 1978.

In the arrangement between the federal department and the contractor, Blue Hills Home Corporation, religious-school students will be served at neutral sites. According to Otis Baker, assistant commissioner for instruction in Missouri, the cost of providing the services will rise nearly $1 million--from $2.8 million to about $3.77 million.

State officials have argued that the Supreme Court in Felton v. Aguilar eliminated the rationale for the by-pass by prohibiting on-site instruction, and have asked that responsibility for serving such students be returned to the state.

The department and Secretary of Education William J. Bennett have been sued by a lobbying group, Americans United for Separation of Church and State, for seeking the delay in Missouri and elsewhere.

The Justice Department filed an unusual school-desegregation suit earlier this month against the Tucson (Ariz.) Unified School District to end what it called "the selective, long-distance busing" of high-school students residing on an Air Force base in the city.

The complaint, filed in federal district court in Tucson on Oct. 1, alleges that the only children bused for desegregation purposes in the district are those whose parents are stationed at Davis-Monthan Air Force Base. Approximately 160 children are bused from the base to a high school 10 miles away.

Moreover, the government contends, the district "strictly enforces against military children" a policy that prohibits them from transferring to schools closer to home if such moves would contribute to racial imbalance at their current schools. In contrast, district officials permitted 363 local students to make such transfers in 1981 alone.

The government argues that the district has violated the terms of 11 federal school-construction contracts funded through the Education Department's impact-aid program by requiring military children to bear the brunt of the desegregation program. The contracts require that the children of military personnel be treated on the same terms as other children.

The government also contends that the disparate treatment of the military children violates the Constitution's equal-protection and supremacy clauses.

Members of the House Ways and Means Committee who opposed President Reagan's tax-reform proposal have also expressed dismay at a draft plan that would modify the proposed elimination of the federal deduction for state and local taxes.

Educators are concerned that any provision to curtail current deductions for state and local income, property, and sales taxes could undermine efforts to finance education reform.

According to the plan drafted by Ways and Means Committee staff members, the deductibility would be eliminated, but individuals could deduct either $500 ($1,000 on a joint return) in state and local income and property taxes or the amount of such taxes that exceeds 5 percent of their adjusted gross income, whichever is greater. Representative Thomas J. Downey, Democrat of New York and a committee member, called this "disastrous," as supporters of deductibility continued their campaign to defeat such proposals.

The staff-drafted version would also raise the maximum child-care credit from $2,400 to $2,450 for one child and from $4,800 to $4,900 for two or more.

It could take up two months for the panel to complete writing a bill.

Vol. 05, Issue 07

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