PUBLIC LAWS 815 AND 874, 81ST CONGRESS (ADMINISTRATION'S PROPOSAL FOR MODIFYING EXISTING LEGISLATION)

WEDNESDAY, JULY 29, 1959

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON GENERAL EDUCATION OF THE

COMMITTEE ON EDUCATION AND LABOR, Washington, D.C. The subcommittee met, pursuant to recess, at 10:20 a.m., in room 429, Old House Office Building, Hon. Cleveland M. Bailey (chairman of the subcommittee) presiding.

Mr. BAILEY. The subcommittee will be in order.

Despite the absence of some of the members of the committee who I understand will be along shortly, the time element is such that I think we should proceed with the testimony of the several witnesses present this morning.

Our first witness will be Howard A. Matthews, commissioner of education of the 49th State, Alaska. I should like to ask the gentleman to come forward and further identify himself, and proceed with his testimony.

STATEMENT OF HOWARD A. MATTHEWS, COMMISSIONER OF EDUCATION, STATE OF ALASKA

Mr. MATTHEWS. Thank you, sir.

I am the temporary or on interim appointment as commissioner of education pending complete reorganization of the State government. I have been in Alaska 6 years, the last 4 years of which I have been a member of the department of education staff.

I sincerely appreciate the opportunity of being heard on H.R. 7140, a bill to amend Public Laws 815 and 874, 81st Congress, relating to assistance to school districts in areas affected by the tax immunity of Federal property.

I should like to depart parenthetically from my prepared statement at this point to say that the statement I have presented to you in written form presupposes that the committee is familiar with the basic provisions of the Admission Act and the Alaska Omnibus Act recently passed by the Congress. Consequently, I have not gone in any detail into what is ahead for education in Alaska as this reorganization takes place.

I would be pleased to interrupt my prepared remarks at any point and attempt to answer any questions members of the committee may have on some statement I have made as it may affect what will happen in the future.

The proposed bill would reduce substantially the assistance now given to school districts for the education of children whose mothers or fathers work on but do not live on Federal property. H.R. 7140 seeks to establish a definite distinction as to where the Federal property is situated with respect to the school district which is actually providing educational facilities for the children affected.

Because I am confident that other witnesses before this committee have well established the moral basis for continued Federal connection with respect to these children in question, I will not multiply words on that particular aspect of this problem. It goes without saying that if it were not for the Federal activity, the additional numbers of children would not be present in these affected districts. The continuation of the Federal activity and ownership of property continues and increases the attendance of all classes of Federal impact pupils.

What I am primarily concerned with at this time is the effect upon the new sovereign State of Alaska of the rigid classification which the bill establishes with respect to the location of the federally connected tax-exempt property. It is toward this particular offensive portion of the proposed amendments that I wish to direct my remarks today.

Based on the estimates given by the Secretary of Health, Education, and Welfare, the total loss in income to the State of Alaska for fiscal 1960 under Public Law 874 would be $907,237, with the reduction under Public Law 815 amounting to $26,600.

Mr. BAILEY. That would indicate, then, that your construction program was rather a weak one in Alaska, in that you were getting only that much assistance from Public Law 815.

Mr. MATTHEWS. No, sir. The difference results, as I say further in my testimony, from the fact that we have so many small school districts which cannot meet the requirements for percentage of increase or gross numbers of increase so as to be eligible under Public Law 815.

Mr. BAILEY. Could the Chair suggest to the gentleman that in reorganizing your school system in Alaska, you get rid of a lot of those little districts and consolidate them.

Mr. MATTHEWs. We would like to do that, sir, but consolidation of school districts in Alaska is not an easy matter.

Mr. BAILEY. Due to your lack of transportation and your lack of highways?

Mr. MATTHEWS. That is correct. Many of the districts in southeastern Alaska are located on an island, and the only mode of transportation between districts would be by plane or by fishing boat. There are no ferry systems. There are no means for consolidation of the some of these small, expensive school districts.

Mr. BAILEY. You do have a problem.

Mr. MATTHEWs. We have a problem. These districts vary in size from fewer than 100 pupils to 10,000 pupils.

Mr. BAILEY. You proceed with your regular presentation.

Mr. MATTHEWS. The wide difference between these two figures results from the fact that many Alaska districts are eligible only for Public Law 874 because they do not have sufficient increase under Public Law 815 to qualify for construction funds.

It is my belief that the loss of this source of income for school purposes at this particular time would have a very detrimental effect upon the State of Alaska in a number of ways. Enactment of H.R. 7140 would impose upon the State a financial burden contrary to the spirit of the Alaska Omnibus Act, which seeks to help, not hinder, the State through these first few years as a completely sovereign State.

I might depart at this point again, sir, to say that already transfer has begun of some of the Federal properties which the State will have ownership of under the statehood status or under full State status. Various parcels of Bureau of Public Roads property have been transferred. We have no way of predicting at this time how long it will take before the State assumes all of the property granted to it under the omnibus act.

Mr. BAILEY. Certain public lands were reserved to the Federal Government, however.

Mr. MATTHEWS. That is correct, sir. A large portion of public domain will be transferred to the State in very large parcels, and just the mechanics of determining those parcels and making the transfer will entail considerable time and study.

I regret very much that activities attendant to the reorganization in State government has prevented me from having sufficient time to prepare definitive data for the committee to delineate more clearly the circumstances in Alaska involving Federal tax-exempt property which differ so greatly from the situations presented by the Secretary to illustrate his reasons for the proposed amendments to these two public laws.

I should like to present here, however, in lieu of tables, charts, and graphs, some general considerations to illustrate how, in particular, the rigid division in property classification proposed by H.R. 7140 would impose a very inequitable situation upon the State of Alaska. It would be especially useful to the committee, and probably very illuminating, if all States, including Alaska, could make a critical analysis of the actual location and valuation of the taxable residential properties of the parents of children who work on but do not live on Federal property. If they did, I do not think this question would come up annually.

I think the committee would find a large number of circumstances where such residential property does not contribute significantly to the tax base of the local educational agency. Particularly would this be true where there is yet construction activity and large military establishments. There are many illustrations in Alaska which tend to refute the argument that the residential property of the parent is taxed equally with that of the parent not federally connected.

It is almost impossible to use a representative community or local educational agency in Alaska for purposes of illustration or random sampling because there is such a wide difference in the social-economic profile between communities. School districts which would be affected by the proposed amendments vary in size from fewer than 100 students in average daily membership to approximately 10,000. Additionally, they vary from areas with essentially a basic subsistence economy with the majority of the local taxable property being personal

property rather than real, to districts fairly comparable to a district of the same size in the other States.

In Alaska, as in no other State-save perhaps a small portion of the State of Maine-there remains a large area of the State not yet organized into taxing units or school districts. All of the schools located outside the corporate limits of organized school districts in the entire State Bureau of Indian Affairs schools excepted-are operated by the State department of education.

I might add parenthetically that there are 29 operating, organized school districts. We have one or two organized school districts on the books which do not have enough students at the present time to oper

ate.

The department of education thus serves as the local educational agency for the 105 schools situated outside regular organized school districts. These schools are considered, for purposes of Federal assistance under Public Laws 815 and 874, as the State of Alaska School District No. 1, and enroll about 30 percent of all public school pupils of the State.

Included in the schools operated by the department of education are those located on the eight military bases which are financed under section 3 of Public Law 874. With the exception of high school pupils from Kodiak Naval Base, Elmendorf Air Force Base, and Fort Richardson at Anchorage, and Ladd Air Force Base at Fairbanks, all dependent children living on the bases are in schools under the exclusive jurisdiction of the Alaska State Department of Education, and for all practical purposes they are operated in the same manner in which the State operates the public schools in any area not part of an organized school district. High school pupils at the above bases are carried by school buses to the adjacent school districts.

It is of tremendous importance at this point to emphasize that for the purposes of the location of Federal property so definitively enunciated in H.R. 7140, the State department of education school district No. 1, as we refer to the entire State, not the school districts commonly referred to by the Secretary, would have the bulk of the Federal property within its jurisdiction, or school district. The same would be equally true for all remote construction sites.

Parenthetically, that would include the DEW line, the White Alice, and the missile detection sites now being built or to be built in the future. All these federally connected projects would be outside an organized school district but inside the Alaska school district which the State department of education operates.

These federally connected properties would likewise be situated within the State school district. It would appear to me that so long as the State continues to operate these schools-and it appears that it will for a good number of years in the future-a logical extension of the Secretary's position with respect to the rigid necessity for the Federal property to be within the district where the child attends school, would remove the bulk of the federally connected property from what is now the 50-percent category and place it in the 25-percent category. At Anchorage and Fairbanks, the organized school districts are virtually surrounded by military installations which are contiguous to the district and upon which large numbers of district residents are employed. These bases, in fact, form the chief economy