Commissioner Derthick at another point stated, with reference to Federal assistance under the public laws:

The central concept then (and since) has been that the Federal Governthent should in equity recognize and accept its obligation to assist in the support of public elementary and secondary education in those school districts in which a part of the local property tax normally available for the support of educational services is absent by reason of the tax immunity of the Federal property on which children reside as their parents are employed. The assistance provided is in the nature of an in-lieu-of-tax payment

This concept would appear to be contrary to the declaration of policy in Public Law 815 and in Public Law 874. The declaration of policy in Public Law 815 states:

In recognition of the impact which certain Federal activities have had on the school construction needs in the areas in which such Federal activities have been or are being carried on, the Congress hereby declares it to be the policy of the United States to bear the cost of constructing school facilities in such areas in the manner and to the extent provided in this title.

The declaration of policy in Public Law 874 states:

In recognition of the responsibility of the United States for the impact which certain Federal activities have on the local educational agencies in the areas in which such activities are carried on, the Congress hereby declares it to be the policy of the United States to provide financial assistance, as set forth in the following sections of this act, for those local educational agencies upon which the United States placed financial burdens by reason of the fact that

(1) the revenues available to such agencies from local sources have been reduced as a result of the acquisition of real property by the United States;

or

(2) such agencies provide education for children residing on Federal property; or

(3) such agencies provide education for children whose parents are employed on Federal property; or

(4) there has been a sudden and substantial increase in school attendance as the result of Federal activities.

From the foregoing it would appear that the intent of Congress was to provide assistance where the activities of the Federal Government made an impact in a number of ways on the district rather than the in-lieu-of-taxes payment suggested by the Commissioner.

The residents of Garden City are people who are employed by industrial concerns throughout Wayne County, many of which still work on Government contracts. It is essentially a bedroom community, for it has only one small industrial plant where about 400 people work on Government contracts.

These people are industrious, hard-working citizens who fully realize their responsibilities to the community. The influx of new workers and their families created a serious problem for the school district because there was not room to house the additional children, but the people of the community rose to the responsibility and paid one of the highest school taxes in Michigan in an attempt to solve the problem.

In a 10-year period since 1949, the school taxes have been increased 6.101 mills, which is about a $30.51 per year increase for a taxpayer owning a house assessed at $5,000. In 1949 the district had a debt of $671,000.

The school debt as of June 30, 1959, was $4,910,000, and the people have authorized an additional debt of $3,700,000 for a total of $8,610,000, or 17 percent of the total State equalized valuation.

This is clear evidence that the community is trying to solve its prob lem at the local level and is not merely looking for a handout from the Federal Government. It has been shown that Federal activities have had an impact in that the school population has increased, so I earnestly recommend that the committee continue this aid in line with the intent of Congress as set forth in the declarations of policy of both public laws. Mr. O'Leary here is going to give the chairman the details of the background and need for the continuation of Public Law 815 and also Public Law 874. Therefore, if the chairman will allow, I shall let Mr. O'Leary take it from here.

Mr. BAILEY. You may proceed to discuss it in any form that you care to, Mr. O'Leary.

Does the gentleman wish to have a formal statement for presentation?

Mr. LESINSKI. Yes, sir.

Mr. BAILEY. It will be accepted for inclusion in the record.

Mr. LESINSKI. He would like very much to point out certain details of it, Mr. Chairman.

Mr. BAILEY. That is fine, you may proceed. (Information referred to follows:)

GARDEN CITY PUBLIC SCHOOLS,
Garden City, Mich., July 24, 1959.

Hon. JOHN LESINSKI,
House of Representatives,
Washington, D.C.

DEAR CONGRESSMAN LESINSKI: I appreciate your communication of July 22 1959, inviting us to submit to you facts relative to the need of Public Law 815 and 874 in our school district.

I was astonished that Commissioner Derthick of the Office of Education cited our school district in his testimony on H.R. 7140 before the House Committee on Education and Labor on June 10, 1959, as an example of a district the administration feels should not be eligible for benefits under section 305 (a) (3) of Publie Law 815. I assume that his testimony had to do with future needs under this. law.

I would like to review for you some of the pertinent facts relative to Garden City. It is located on Ford Road about halfway between downtown Detroit and Ann Arbor and is rectangular in shape being 2 miles wide (north and south) and 3 miles long (east and west). Within Garden City there is one small concern called Electro Mechanical which has about 50 percent of their work force of some 400 on Federal Government contracts. The balance of the community is made up of individual homes. They are not large, expensive homes, but homes that the average worker can afford to purchase after paying a sm amount down. The best descriptive term used for our community would be a "bedroom community." These homes do not produce enough tax yield to carry on a school program.

To the north, south, and east of Garden City there are many hundreds of plants ranging in size from the giant Ford Motor Co., with its thousands of employees, to small job shops that employ 3 or 4 individuals.

The growth of Garden City has been an amazing thing. In the 1949-50 school year, there was a school population of 1,813 children and a total city population of approximately 7,000 people. At that time, we had 56 classrooms, 26 of which were the wooden temporary facilities that had been constructed as temporary some 20 years before. The ratio of debt to assessed valuation was nearly 10 percent and the credit of the school district was not high due to previous de faults on bond and interest payments.

At this time, Garden City seemed like a sleepy western frontier town that was quite content with the status quo. Very few new homes were being constructed, and it appeared that any additional facilities needed for school purposes could with maximum local effort, be constructed at the local level even though we were one of the poorest school districts in Wayne County with a total assessed valuation of $7,424,560.

At this point, our country became engaged in the Korean conflict. The Detroit area constituted the arsenal of America and many firms which had returned to the production of consumer goods suddenly had to start producing tanks, planes, guns, electronic equipment, and many other weapons and component parts needed to defend our Nation against the forces of communism. The work forces in these plants had to be expanded and supplemented with skilled craftsmen from other plants in Michigan and from other States. In addition to these defense workers, many families moved into the community as service people, and the Government assumed no responsibility for this indirect growth. These workers needed homes that were not too distant from their place of employment. Garden City suddenly found itself a boomtown with housing projects under development that often consisted of 900 units or more. The school district was unable to house the children of these many newly settled defense workers with the antiquated schools that were in existence. When confronted with these problems, the citizens did not throw up their hands and say, "This problem was created by the Government-let them resolve it," but reached into their pocketbooks and paid one of the highest school taxes in Michigan in an attempt to resolve the problem at the local level. (See table on page 189.)

It was very apparent that even though the people were willing to pay for schools, they did not have the resources to meet this problem from within the community. At this time, we turned to the Federal Government and applied under Public Law 815, section 305(a) (3) which provided that a community, any part of which was in a defense area and whose membership resulted from activities of the United States, could receive assistance from the Government to help house those children who were in the community due to this Federal activity.

Our school district assumed a role of leadership in attempting to provide the necessary information to the Office of Education so that their field men could readily examine available data and determine if the membership within the school district was due to Federal activity. We initiated the formation of an association in the Detroit area to survey the various industries, and the information obtained is available to any school district that desires to use it. We were able to collect the necessary data and substantiate our claim for Federal funds under the law as enacted by Congress.

The Government, under Public Law 815, section 305(a) (3), provided only 45 percent of the cost of housing a student, and then only those students that were in the district because of Government activity. This 45 percent provision assumed that local industry and business could pay most of the remaining 55 percent. This left a substantial burden on an already hard-pressed community where residents must pay about 95 percent of the taxes due to no major business center and only one small industrial plant. The people bonded themselves as much as they possibly could under the laws in Michigan.

This maximum bonding program and the Federal aid received was still not adequate to meet our critical housing shortage. We had 2,500 children on half-day sessions during the 1954-55 school year. Our school district then assumed the leadership in amending the constitution of the State of Michigan to enable a district to bond itself to an even greater extent to house children. This program, which in its conception was known as Joint Resolution D, is now known as the Michigan $100 million school bond program. Neither our $3,300,000 nor our $3,700,000 bond issues of 1956 and 1959 would have been possible if the constitution had not been amended. Our district was the first district in the State of Michigan to qualify bonds under this program.

As the attached chart shows, Garden City has constantly bonded itself to a maximum level and has attempted in every possible way to resolve school problems at a local level.

It has always been our belief that the Federal Government should have assumed, in all cases, the full cost of providing the facilities for these federally connected children, but this was not made possible under the law and we have appreciated the assistance the Congress has seen fit to extend.

The school district has increased from an enrollment of 1,813 children in 1949 to an expected 9,800 children in September of 1959. The town has increased from 7,000 in 1949 to a community of 35,000 in 1959.

Instead of the 56 rooms used in 1949, we now have 306 classrooms in 1959. Since 1949 there has been a 6.101-mill increase in school taxes, which is an ncrease of $30.51 per year on a house assessed at $5,000 for the average taxpayer. In 1949 we had a debt of $671,000. Our school debt as of June 30,

1959, was $4,910,000 and the people authorized $3,700,000 additional school debt by a 5-to-1 vote, which will make a total debt of $8,610,000, or 17 percent of our total State equalized valuation. A bonded debt ratio of 8 percent is considered a maximum local effort. Many States limit the school bonded debt to 2 percent, and 5 percent is quite common. This rapid growth was caused in large part by Government activity in this area, as our industrial and pupil surveys have indicated. With this rapid growth caused by this Federal activity, we feel that the Government has had, and continues to have, a responsibility for housing these children.

It is our belief and our contention that, instead of Commisioner Derthick citing our school district as an example of a school district that should not be eligible for benefits under section 305(a)(3) of Public Law 815, the evidence presented would indicate that this is the best example in the country of a school district for which Congress intended this type of legislation. If anything, we believe Public Law 815 should be amended to allow 100 percent reimbursement under section 305(a) (3) for federally connected pupils.

There is no doubt that the need for this legislation is decreasing, but should not this type of legislation with the section 305(a) (3) be left on the books as a standby law which can be readily available in cases of national emergencies? There is no question but what the Detroit area is going to be involved for some time to come with contracts for the Government if our Nation is to survive in the cold war.

The service people and plant workers that are involved in fulfilling these contracts might still impose an impossible burden on certain communities as it has done in Garden City. If a substantial burden is not experienced, under the provision of the law a school district would not be eligible for funds and there would be no cost to the Federal Government.

We feel that Public Laws 815 and 874 should be left intact and extended. We appreciate the assistance we have received in our community by the Federal-aid program and hope that the Congress will see fit to continue these programs as they are now operating.

Respectfully yours,

PHILIP R. BONNER, Assistant Superintendent.