Oklahoma County, nonfederally impacted districts, and Oklahoma City, have all increased in per capita assessed valuation over what they were then.

But it is logical to suspect that aside from the Federal impact, and the lack of other things keeping in normal balance, that we might have had $5,000 or $6,000 back of each child, but certainly a little bit more than it was prewar.

I pointed out in my testimony of last year these points.

The impact is the secret to this problem, if we consider children's education. Again I come back to my fundamental premise that if education isn't important to the satisfaction and the work production of the 25,000 people there, then the Federal Government has no interest in it. But if their productivity and their happiness, their normal family life, make them better employees, then we have to choose between whether they have a decent educational program or whether they do not have one.

The Department strongly implies a result directly opposite to this when it represents that the present legislation put the Federal Government in the position of providing these federally impacted school districts unfairly with preferential treatment, and yet it cites no specific evidence that a single federally impacted district has reduced its own effort, the State effort, or that with these funds and the pres ent Federal funds it is able to provide a preferential educational program unfair to other districts either in its operation or school construction program. In thinking of treatment, I think of the education that the children get, whereas I am sure that the Secretary or the Department thinks in terms of whether the Government is giving more money to one district than to another.

In reality, if the rates are reduced it would be providing them unfairly with detrimental treatment by refusing its just responsibility. This is just one man's opinion-mine.

I know it would reduce the per capita funds available to my district by approximately $20 per child. We are already $10 less than the Oklahoma average. What else can be the result? We also have the highest tax rate of any district. We have voted bonds every year. Frankly, I want to mention this: All of our bonds are 10-year bonds. Why? So that we can recover faster and get another bond issue. If we voted 30-year bonds, or 20-year bonds, we would only pay off one-twentieth or one-thirtieth each year, and thus, within our 10 percent limitation, we would only be able to vote a small bond the following year.

I know of one federally impacted district, Lawton, where Fort Sill is located, that voted three different annual bonds, 1-year bonds. Their tax rate went to 80 mills to pay their bond issue, but they had to have buildings.

You cannot exceed over 10 percent of the assessed valuation in Oklahoma, but you can vote 10 percent on a 1-year basis and the next year it is paid off. Then the next year you still have the same bonding capacity. We have only gone to the 10-year bonding program. The testimony of the Department states:

Our proposal rests on an extensive study of sources of local revenues which have been provided by the Census Bureau study.

A

The report referred to is actually entitled "Property Tax Assessments in the United States," and was released December 16, 1958. recap of the breakdown of only total real property assessments is as follows:

The Secretary of the Department talks about the 27.7 percent. That one item, of course, as a school person, does not interest me. I want to talk about the 54.1 percent. Neither of them, in a sense, is justified unless we consider the other one.

The 54.1-percent residential assessment is based on gross assessed valuations, and since several States have homestead exemption laws— about seven of them-making a great deal of the residential property assessments nontaxable, this percentage in comparison to the remainder which might produce local revenue might well be reduced considerably or below 50 percent. Also, since the 27.7 percent representing commercial and industrial assessments includes only the real property involved in this classification, it might well be materially increased when the personal property such as inventories and equipment necessary in operating either an industrial or commercial enterprise is included. Thus, this stated percentage which actually proluces local revenues will be much higher.

I have here a copy of a little booklet that the Tinker Air Force Base, or the Oklahoma City Air Materiel Area, a big installation which includes all the different units in that installation, have put out on Air Force's Day. On page 11, it says:

Present supply inventory at Tinker is estimated at a value of $1.9 billion.

I mention that to show you that these inventories, those stocks on and, and equipment that people press out the sides of a car with, an well be more than the real estate alone.

So, to use it in this connection, I think we would have to get more lata on which to base a conclusion, the same as I would on the 54.1 ercent.

The Secretary states regarding this report, that:

For the country as a whole commercial and industrial property accounts for nly 27.7 percent of the locally assessed real estate base. For no State does the cally assessed valuation of all commercial and industrial property reach even O percent of the total local real estate assessment, the highest for any State eing 37.1 percent, and the lowest 9.3

Well, that is a correct statement, but I will give you one that is just s correct. Neither one tells the whole story.

In all fairness to the children of America he should have added that e percentages do not include the tax assessments of inventories and quipment necessary in conducting commercial and industrial enterrises throughout the United States which should be added if used to dicate the local revenue provided by commercial and industrial enrprises.

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I simply didn't have the research staff to pick up a few illustrations, but I suggest to the committee that you pick out nearly any industry. I thought about the Robeson Steel Co. in Oklahoma City, but I didn't have time to check it. I wanted to see how much of their tax load was the steel on hand for the purpose of fabricating the various orders that they get. How much are the big cranes that go about over the lot that they operate on, which handle the steel? Then there is the various other equipment.

I would hazard a guess that it would be pretty nearly as much as the real estate on which that company operates.

Mr. LAFORE. Of course, in some areas of that country that is not a tax base. In Pennsylvania it is not.

Mr. ROSE. That might be true. That is what makes our problem, Mr. Lafore, a terrific one, that we find so many variations. Oklahoma, personal property is.

Mr. LAFORE. It is in many places, I know.

Mr. ROSE. But it makes it difficult to say that an average here will support a formula whether it is 50 or 40. As I see it, the great strength of our 50-50 that we have now is the 9 years' experience that we have had that at least has turned chaos into education in a great many districts, and buildings such as have been seen at our place, into a decent educational program. We know that has happened.

Assuming that the Federal Government has paid a little more of that than the pennies worth that it might not have been responsible for, it has not been wasted in the great value to our education and, thus, to our Nation.

I will turn it around with another statement which I say is illogical. One might just as logically and accurately state to this subcommittee that for the country as a whole the residential nonfarm property accounts for only 54.1 percent of the locally assessed real estate base and that for the highest State it is 66.9 percent, and for the lowest State it is 18.6 percent, and also that in order to get a true revenue producing picure we must deduct homestead exemption in the States where such whole or partial exemption is made reducing this category below 50 percent of the total.

Mr. BAILEY. Is that still the same as it was when we held hearings there, the $2,500 exemption on homesteads?

Mr. ROSE. No; it is $1,000 in Oklahoma. That is all it has been in Oklahoma.

Mr. BAILEY. I know one State was up to $2,500.

Mr. ROSE. Since the present rates of Public Laws 815 and 874 are based on the premise that approximately one-half of the tax revenues in a school district will be derived from homes, it would seem to me that the Secretary has pointed out a source of information substantiating the present rates rather than one which would support his proposed reduction.

H.R. 7140 also recommends the complete elimination of the provisions in both laws to meet the continued Federal responsibility for sudden and substantial increases in attendance-section 4 (a), Public Law 874, and section 305 (a) (3), Public Law 815-even though there is yet substantial evidence that such increases and the problems attendant to them are still occurring.

Since it was the problems arising principally from such impact and not the tax loss alone which caused the Federal Government to make

the study that resulted in assistance to federally impacted school districts, it seems very unusual that we would now reason that similar cases present no problem and thus no responsibility to the Federal Government. Certainly, there are not as many such cases at the present time as during and immediately following the war; however, those which still occur are a continuing Federal responsibility.

The law requires a school district to show three additional conditions not required in other sections, namely, a higher than a normal degree of impact, maximum local effort, and financial need, in order to receive assistance under these sections. This certainly places sufficient safeguards so that the Federal Government will meet only its just responsibility in such cases. Those refer only to the Federal pupils so connected.

If these sections are eliminated, it will simply be a case of reducing the educational opportunities for the children in such school districts in order to reduce the Federal budget even though the children involved resulted both directly and indirectly from Federal activities. In my judgment it would be a serious injustice for the Federal Goverment to adopt this change of philosophy regarding the rights of children to a decent education especially to the degree it is responsible for the problem, and again say, I think that degree is almost impossible of determination.

As stated before, the Midwest City School expects an increase of 1,100 pupils during 1959-60, of which approximately 700 will result from Federal activity located within its boundaries. Since there will be no increase in the local tax revenues for their first year of school attendance that was set last January-section 4(a) of Public Law 874 provides the only hope for extra revenue to meet the added cost of one-half the 700 Federal pupils which under the present law is a local responsibility as well as the 400 non-Federal pupils.

There, again, there isn't a school district in the State of Oklahoma as the size of ours, about an 11,000 base, which is having a 400 nonFederal pupil increase a year. What else could be the reason for such in increase if it is not the direct and indirect result of that great volime of work possibilities or potential there where people come with he hope of getting a Federal job, and maybe do not. They are there, ut they just don't go where there is not a lot of employment.

Thus, section 4(a) simply means that the 11,320 pupils in attendance uring 1958-59 will have to share their already below-average local evenues in absorbing only 400 pupils rather than 750 pupils 400 lus one-half of 700. That 750 would be half of the Federals. The ay that works is that our increase of 700 can be classified under 4(a) or the first year and get a larger payment. I believe our payment 1st year under section 3(b) was $133, and under section 4(a) was

211.

So it helps to induct those into a school system prior to the home ssessment getting on the tax rolls and giving you some revenue. f such an unusual increase ever stops, then 4(a) is of no value to 3. We cannot qualify for the 2d year under 4(a). It is strictly or the first years' attendance.

H.R. 7140 also proposes the elimination of section 308 of Public aw 815. I believe the administrative records will show that only e school districts with the very highest impact and the greatest

need for minimum school facilities have received assistance under this section. It is surprising how little money it has taken to maintain that section. It has given considerable help to a few districts. Again, in order to receive payments under this section school districts must show twice the Federal impact required in section 305 and that they do not have nor can they provide under State law the funds for the district's share to construct minimum school facilities for the increased federally connected pupils before they are eligible to receive assistance under this section.

If I make application for funds under section 308, and I have, we will say, $200,000 worth of bonding capacity, the regulations, and they are right, require that I have to vote that bond issue and use it in my overall building budget at that moment before I can qualify for section 308. I must put in every bit of the available local money. In other words, I must show need for that money. I must show that I cannot build for the other half of the section 3(b) pupils which live on the posts, or work on the posts and live off. But I can't get that money without such a showing.

If I can show that, then the Federal Government will pay the nonFederal share under section 308.

Thus, to eliminate this section again means that one-half of the federally connected children for which an applicant is eligible will remain unhoused and attend school in make-shift temporary buildings, or on half-day sessions.

This fact is well illustrated by the Midwest City School District which has been one of the few districts to receive assistance under section 308. Each year this district has voted a new bond issue to the maximum legal limitations of 10 percent of the assessed valuation under State law. Again I say we are voting 10-year bonds so we have a faster recovery to vote additional funds.

These bond funds, together with an annual 5-mill building fund levy and the Federal funds under both sections 305 and 308 have been used for school construction and yet we are using over 60 temporary, makeshift classrooms which were constructed or remodeled from surplus buildings obtained from abandoned Government installations. We just bought two large buildings at the Norman Naval Base when it was abandoned this spring and have brought the lumber up to the school where we can construct some more temporary buildings to take care of the 1,100 pupils. There just isn't any other way.

In closing, I refer again to the Secretary's position that we should restrict Federal aid to specific situations, and then put into effect a Federal-aid program that will result in all school districts being given a fair and equal consideration. I very much believe we should first pass legislation giving substantial Federal support to education, and after this is done-and not before-it might be wise to look at the specific situations and determine whether they create inequities or not. Since the Secretary knows there is little likelihood of enacting general Federal support legislation during this session, and since Public Laws 815 and 874 are now in force until June 30, 1961, I urge this committee to make no changes prior to that date. Also, to continue the consideration of proposals such as H.R. 7140 at each session of the Congress only serves to make planning an educational program in these school districts impossible and renders administration of school affairs less effective. I sincerely hope that we might be given assurance that the