Full Brunt of Impact-Aid Changes To Be Felt in '97

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The omnibus education act signed recently by President Clinton makes major changes in the federal impact-aid law. One will knock some 800 districts from the program. But advocates hope the new law will also help the program's long-term credibility and funding prospects.

Most schools receiving impact aid will not see major funding changes until 1997, when a new formula targeting the program's neediest districts is fully effective.

"That will be the pivotal year," said Charles E. Hansen, the director of impact aid at the U.S. Education Department. "Then you get what the formula says. For some, that will be substantially less."

"Hold harmless" provisions guarantee that in 1995, participating districts will get 85 percent of their 1994 impact aid. And in 1996, most districts will be funded at 85 percent of the 1995 level.

But Mr. Hansen warned that school districts should not wait two years to learn about the changes, and he said they should also be concerned about a $70-million cut lawmakers made in this year's impact-aid appropriation.

While the new law represents bad news for some districts, it is a victory for the National Association of Federally Impacted Schools.

When federal K-12 programs were reauthorized in 1988, factions of the impact-aid community sought better, separate deals for themselves, and few changes were made in the law.

Rep. William D. Ford, D-Mich., assailed impact-aid advocates' disorganization in a speech on the House floor, saying, "As an association, the wheels have come off the buggy."

'A United Front'

This year, NAFIS issued a proposal for revamping the program early in the legislative process and unified behind it. And the bulk of their proposal was adopted.

"You were fighting among yourselves in the past and couldn't present a united front," John F. Jennings, the chief education counsel for the House Education and Labor Committee, told about 450 NAFIS members at their national conference in early October. "This time you did."

Still, the celebration was tempered by the $70 million budget cut that dropped impact-aid funding to $728 million in fiscal 1995.

"President Clinton wanted Goals 2000 and Chapter 1 money. Impact aid was one of the sacrificial lambs," said John B. Forkenbrock, the executive director of NAFIS.

Established in 1950 under the Truman Administration, the impact\aid program assists districts educating large numbers of "federally connected" students, essentially compensating them for property taxes lost due to the presence of federal property or employees.

Most impact-aid students come from military families, Indian reservations, or government housing. Children of non-military federal employees work on tax-exempt property qualify a school district for lesser amounts of aid.

Last year, 2,500 districts received impact aid.

Aiming To Simplify

In reauthorizing the program as part of the Improving America's Schools Act, lawmakers tried to answer longstanding criticisms that its rules were too complex and failed to target funds to the neediest schools.

They scrapped a multi-tiered system that categorized districts by which types of federally connected students they enroll and how many of them there are.

Under the new law, payments are to be calculated by assigning a weight to each eligible student reflecting his theoretical financial impact on a district. A district's total is then multiplied by local per-pupil expenditures to yield that district's entitlement level.

Students living on Indian lands and those from military families with parents who live and work on federal property are assigned the highest weight. Extra weight is given to districts where average daily attendance exceeds 100,000 and at least 6,500 students are eligible for impact aid.

In years when the program is not fully funded, the formula will also factor in the percentage of each district's budget that comes from impact aid. The net result is that distribution of available funds will favor districts that are most reliant on impact aid.

"If we're talking increases and decreases, the new formula is bringing money to districts with the greatest need," Mr. Forkenbrock said.

Mr. Hansen said that after money is subtracted to provide districts with the amounts the hold-harmless provisions guarantee them, about $45 million will remain to be divided according to the new formula among districts eligible for more aid.

Mr. Forkenbrock estimates that about 600 districts will eventually gain funds, while most will see no change or a decrease.

About 800 districts will eventually be knocked out of the program by tighter eligibility requirements for children of civilian federal employees, formerly called "civilian b's."

Getting the Ax

Such students will draw aid for a district under the new formula only if it has 2,000 or more of them, and they equal or exceed 15 percent of the district's average daily attendance.

Previously, districts that had 400 such students, or where they made up 3 percent of total enrollment, were eligible for aid.

Districts that qualified in the past based solely on "civilian b" students get just one year of hold-harmless payments. These are the districts that will be dropped from the program; Mr. Hansen said that just 18 such districts would get aid under the new rules.

Lawmakers targeted these districts for cuts based on a belief that they are affected relatively little by the federal presence in their area. But it will take a large slice out of some budgets.

For example, Fred Cabler, the accounting director for the Chesapeake, Va., public schools, said his district will see impact aid fall from $1.5 million in 1994 to about $600,000 by 1997.

But Mr. Hansen called the change "a good, responsible move."

"We had to target our money better. To do that, we needed to eliminate someone," he said.

Other changes include:

  • A separate funding pot for districts with federally connected, disabled students. Previously, special-education students received an additional weight under the regular impact-aid formula. The new law limits special-education funding to children from military families and Indian land.
  • New rules for a program aiding districts affected by military-base realignments, specifying that a district's enrollment must rise by at least 10 percent or 100 students for it to qualify.
  • A construction program for high-impact districts.

Impact-aid districts are now anxiously awaiting the Administration's 1996 budget proposal, which should be out in February. Advocates are hoping that the new law will help them in the appropriations process--and that lawmakers will not hit them with two budget cuts in a row.

"We're not a popular program," Mr. Hansen noted.

Vol. 14, Issue 09

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