Impact-Aid Advocates Ponder Capitol Hill Strategy

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WASHINGTON While many segments of the education community are gearing up for 1993, when many of the federal precollegiate education programs are to be reauthorized, the stakes are especially high for schools that depend on impact aid.

The program, which compensates school districts for tax revenue lost as a result of the presence of federal property and employees, is among the oldest federal education programs. It is also arguably the least popular among many lawmakers, and its funding, in inflation-adjusted dollars, dropped 45 percent between 1980 and 1991.

"We know we have to change perceptions on [Capitol] Hill, or we're just going to sink deeper into that hole," said John Forkenbreek, the executive director of the National Association of Federally Impacted Schools. "We have to revamp the program to better conform to today's thinking about what the federal role in education should be."

Congressional aides agree that both the program's complicated funding mechanism and its underlying rationale must be renovated.

And they emphasized that it is up to the impact-aid community to present an acceptable proposal-and a unified front.

Generally, the districts receiving the largest amounts of impact aid serve children from military bases. But aid also goes to schools serving Indian children and children who live in low-income housing, and to districts that include federal office buildings or national forest land.

"if they don't get it together this time, they're dead," one House aide said. "There are a lot of people who would like to forget the whole mess and put the money into Chapter 1 ."

The aide was referring to the last precollegiate program extension, in 1988, when factions within the N.A.F.I.S. deserted the official association proposal to battle each other for a bigger piece of the pie.

They were unable to come to terms until late in the legislative process, and the law ultimately contained hastily drafted amendments that had some disastrous consequences.

Categories and 'Waves'

in essence, a district's impact-aid "entitlement" is computed by multiplying the number of eligible students by a figure derived from the average state per-pupil expenditure, or from the average national expenditure, whichever is higher.

The entitlement for each so-called "a" child, whose parents both live and work on federal property, is half that average expenditure. So-called "b" students, whose parents only work on federal property, draw 25 percent. Only districts with at least 400 eligible students receive funds.

This formula is further complicated by the addition of subgroups, based on the percentage of "a" or "b" children in a district's enrollment, by additional weights given to disabled or Indian children, and by special rules for specific types of districts.

In addition, appropriations have lagged far behind total entitlements since the 1970's, and a complex proration method has evolved.

Altering the structure even subtly can give one group of districts a windfall at the expense of other groups. As it stands, the formula essentially pays the districts with the highest percentages of eligible children first, leaving relatively little for districts in other subgroups.

Those dynamics led to the fractions 1988 debate.

The majority sentiment within the N.A.F.I.S. was that funds should be spread around more evenly, but the districts that stood to lose money naturally objected.

The formula the association ultimately proposed calls for distributing money in three "waves" within each of the "a" and "b" categories so that each district receives part of its entitlement in each wave.

"The theory is that it would unite the community to fight for more money," Mr. Forkenbrock said.

But the districts with high percentages of eligible children demanded a provision ensuring that they would receive no less per student in later years than in fiscal 1987. Other subgroups later won the same guarantee.

Another section provided that no district would receive more in total than it did in 1987.

Unintended Consequences

Proponents assumed that, as funding for the program rose, every district would receive more than it did in 1987, and the guarantee would only be needed for one transition year.

The assumption was incorrect. Appropriations stagnated, and the new formula has never been activated.

Instead, districts' allocations are computed by multiplying the number of eligible children in a category by the amount each district received for that type of child in 1987.

The low funding, coupled with technical mistakes, created several problems that the Congress has had to correct.

For example, an amendment was required to allow prorated payments for certain "b" students, because no mechanism was included in the law to do so in years when the new formula was not used.

Several amendments were needed to help districts that received an influx of eligible children--but could not receive more aid because their total funding was capped at 1987 levels.

Another revision rescued several districts facing demands from the Education Department to repay millions of dollars they had been given in error because the agency miscalculated their 1987 payments. Because the 1987 payment levels were used to figure allocations for every succeeding fiscal year, the effect had snowballed.

One unintended effect that has not been remedied flows from a 1988 provision requiting that a set-aside for disabled impact-aid children be paid to their schools "off the top," or before formula payments are calculated.

As a result, the portion of the funds allocated on behalf of disabled children has skyrocketed. In 1988, before the new law took effect, it amounted to 19 percent of impact-aid funds. In 1989, 41 percent of funds were allocated under the off-the-top rifles.

Negative Perceptions

The past few years of tinkering has magnified the impression held by many lawmakers of an overly complicated program that responds to parochial concerns rather than to national priorities.

"It's got nothing to do with the popular arguments over which program will meet the national goals or which district has more poor kids," a House aide said.

It is an impression that is continually enforced by seemingly endless attempts by some lawmakers to secure special rules for impact-aid schools they represent.

For example, Senator Howard M. Metzenbaum, Democrat of Ohio, secured an amendment in 1990 stating that a school district would not lose funds if military families were forced to move to off-base housing because of an environmental hazard.

His motivation: Families at Ohio's Wright-Patterson Air Force Base were moved when toxic waste was discovered underneath base housing. III the move, "a" children became "b" children--a development that entitled the nearby Fairborn school district to far less aid.

The underlying problem is that "these situations are so idiosyncratic," said John F. Jennings, the chief education counsel on the House Education and Labor Committee.

In addition to viewing the program as parochially focused, Mr. Jennings said, "a member can see a relatively wealthy school in his district getting money while a needy one does not."

"An overriding problem for the program is a perception that some school districts getting the money don't deserve it," he said.

Mr. Jennings said opponents of the program argue that federal installations sometimes bring benefits-in the form of additional jobs and customers for local businesses-that outweigh the impact of additional children to educate.

He also noted, however, that it would be difficult to write legislation balancing those costs and benefits.

"John has got his work cut out for him," he said of Mr. Forkenbrock.

Proposal in the Works

Mr. Forkenbrock said the N.A.F.I.S. will probably propose scrapping categories and waves in favor of a system that assigns weighted limits" to each federally connected child based on the nature of their eligibility, the concentration of eligible children in a district, whether a child has special needs, and possibly the overall financial need of a district.

The total appropriation would be divided by the number of "units" counted in all eligible districts nationwide to yield a national payment level per unit.

Mr. Forkenbrock also plans to propose a contingency fund to allow the Secretary of Education to temporarily compensate districts victimized by unusual, unforseen circumstances.

Mr. Forkenbrock cannot expect help from the Bush Administration, which this year repeated a perennial Republican proposal to drop "b" students from the program. They also proposed paying only for children in excess of the 400-student minimum.

Aides predicted that those proposals would be ignored on Capitol Hill, but that funding would continue to decline if no changes are made in 1993.

Vol. 11, Issue 22, Pages 28, 31

Published in Print: February 19, 1992, as Impact-Aid Advocates Ponder Capitol Hill Strategy
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