particular, in order to funnel both Federal and State funds into some entity which would be able effectively to plan for the use and control of the spending of these funds.

We also are looking to find out whether there are some untapped or little-used sources of local financing that we might recommend be expanded.

It is our instinctive feeling that local governments, in particular, have not yet utilized all of the sources of financing that are available. This Commission does not want, as I know the Congress does not want, to be a party to the concept that all the monies for governments are going to come from Washington. So we are encouraging a continuing look at the whole question of untapped sources of financing. This is one of our major research projects at the moment.

CONTRIBUTIONS AND GRANTS

We have had this past year, and are anticipating in our budget request for fiscal 1974, some contributions and grants.

You will recall, I am sure, that while the major source of funding for the Advisory Commission has been from congressional appropriations, the law was modified to allow the receipt of contributions and grants. We have slowly built up participation by States and large cities.

We are now attempting to involve large urban counties in making voluntary contributions to the Commission.

We are estimating that in fiscal 1974 something in the neighborhood of $57,000 will come from these contributions. It obviously is not a large sum, but we think symbolically it is a significant part of our program.

We also have received, Mr. Chairman, in this past 1%1⁄2 years, several significant grants. One for $102,000 was from the Ford Foundation, and was used to do a study (which we have just completed) designed to set up an early warning system for diagnosing when municipal governments are in acute financial distress, as a few of them in the past several years have been, and to recommend alternative ways to deal with this problem of municipal financial distress.

We also received for the study of school financing and property tax a grant of some $79,000 from the Domestic Council and HEW to help finance some of the detailed studies in that area.

We also received a grant of some $122,000 from the Department of Housing and Urban Development in connection with our study of substate regional governments which I mentioned a moment ago. These are the primary grants we received in the past year. It is impossible totally to anticipate in the future what additional grants the Commission may have for special studies, of course. It could be that some will be forthcoming in the year ahead.

PUBLICATIONS

We have, as you know, a very extensive publication program. I brought with me some samples of recent documents which I thought might be of interest to members of the committee.

We conducted a very interesting two-day symposium, actually it was a year ago or more, and the publication I have with me, which is

called, "Who Should Pay For Public Schools Today" represents the results of that conference. We had representatives from various levels of government and Canadian neighbors, who have had considerable experience in this whole business of school financing through the provinces in their case.

The pamphlet poses some very interesting questions and, hopefully, answers on how schools might be financed.

We also issued last year a study of special revenue sharing which was an analysis of the proposals made to the Congress a year ago. This is now somewhat out of date. We may update this, when, if, and as we have a new special revenue sharing program submitted. In addition to that, we put out periodically what we call "information bulletins" and "information interchanges" which highlight some of the current problems in intergovernmental relations. We attempt to keep officials at all levels of government up to date on some of the matters that are surfacing in the whole field of Federal, State, and local relationships.

I think you are familiar with the annual book we put out called "State and Local Finances", the 1972 edition of which I have with me. This book contains suggested legislation carrying out Commission recommendations, particularly at the State level, improvements in the organization of State government and its functioning, and in local governments as well.

This book, I am happy to say, becomes, in almost every State I have ever visited, a bible which legislative reference libraries and others use in the drafting of State legislation to improve relationships of States to the local governments and the operations of State government itself.

What I have given you to date are really informational reports which do not carry official Commission recommendations.

When the Commission undertakes a research project, as we did with the school financing question, we will, of course, make specific recommendations which represent the consensus of the Commission.

I have with me a study we made last year as the prelude to our study of general metropolitan organizational problems. Last year's study was called a "Multistate Regionalism." It dealt with interstate metropolitan problems, where you had two or more States that lapped over a metropolitan area, such as the New York area. This publication summarizes some of the problems created by the sprawling metropolitan urban growth, with some specific recommendations.

We also looked at the whole question of interstate compacts, and problems created by various regional groupings that have sprung up as a result of new Federal programs, Appalachia being an example, and so forth.

It is always hard, Mr. Chairman, to quanitify the results of the activities of a group like this which is, of course, advisory in nature. But from time to time we try to analyze what has happened to the recommendations that we make and, having already stipulated that this is less than a precise science, let me just give you the figures that we have come up with recently.

RESULTS OF RECOMMENDATIONS

Of some 146 recommendations for legislative or executive action at the Federal level offered by the Commission from 1961 through

1972, we feel that about 50 percent have been fully or partially implemented. Ten percent have been rejected. Others are in various stages of consideration.

We have identified at the State level, based on our State legislative book, some 750 State implementing actions in which the language or substance of the enactment was close enough to our draft legislation that we could take some pride of paternity.

We continue through our staff, in particular, to implement our recommendations, particularly at the State and local levels, by cooperation with all of the various public interest groups in this area; publicizing our own recommendations and attempting to get public support for them.

Mr. Chairman, I would have to say that, in a sense, the enactment of revenue sharing did represent, whatever one's individual views may be, the culmination of a considerable amount of activity on the part of this Commission. A provision in that legislation which is yet. to be used, whereby the Federal Government can collect State income taxes, was a very specific recommendation of the Advisory Commission, which we were able to get the Congress to enact into the Revenue Sharing Act.

We would like to take some credit for the transfer of three adult welfare categories into Federal financing, as provided in the social security amendments you adopted last year, because we have for some time felt that there should be full Federal assumption of welfare costs in view of the tremendous mobility of our population and the wide disparity in the State entitlements.

We believe that our advocacy for the last 6 or 7 years of the concept of full, or substantially full, State financing of public schools has played an important part in the public attention now focused on that

issue.

While the Supreme Court in its wisdom said that the use of the property tax for financing public schools was not a constitutional question, it did, if you had the opportunity to read its decision, state quite clearly that there were some very severe inequities in the present methods of financing public schools in many States. The Court in effect admonished the States to get busy on this subject, one which we have been attempting to focus attention on for some time.

I have one other pamphlet I brought. This is our 1971 bulletinthere will be a new one out very shortly-which we call "State Action on Local Problems." It indicates some of the legislation and other related action which States have been taking to improve their participation in the workings and financing of local governments.

PROPERTY TAX RELIEF

One final document, Mr. Chairman-and I hope I am not overburdening you-we have been for some years convinced that the greatest inequity in the property tax was its burden on the low income, the elderly in particular. We made some studies which indicated that there are over 1.6 million families, as I recall it, who are paying an average of nearly 20 percent of their gross incomes, their total family incomes, in property taxes. These are families making under $2,000 a year, total income. That includes social security payment and everything. These are homeowners, elderly couples who have retired, obviously, and whose only asset really is that home.

So we developed a concept which some 15 States have now enacted— we call it a circuit breaker. The idea was that the State, either through a direct payment to the local government or through a voucher to the taxpayer, would in effect pick up the cost of property taxes for elderly families under certain income levels. This means the local government does not lose the revenue, but it also means that the elderly person does not have to come up with this enormous piece of his income for property taxes, which obviously goes in heavy amounts to finance somebody else's children going to school.

In our report to the President and to the Congress on this school financing question and the property tax, we pointed out this as the greatest area of inequity in the whole field of property taxation.

We recently put together a little bulletin in which we describe what various States are doing in trying to meet this particular problem, with a State-by-State map and some draft legislation.

It is interesting to note that since we started to really publicize this matter, almost every State legislature this year is in one way or another considering the problem of circuit breaker-elderly-low income family relief. These bulletins give you an idea of the kind of material we circulate throughout the country to local and State officials.

That, gentlemen, gives you a highlighting of what we have been up to in the last year.

FEDERAL HIGHWAY TRUST FUND

Mr. STEED. In connection with your workload, a number of years ago when I was on the Public Works Committee, I not only became the sponsor of an amendment, but also was very active for about three years in putting together and helping pass what we know now as the highway bill, and the creation of the trust fund. The Steed amendment for raising the taxes to pay for the roads became the trust fund.

In the concept that we had, there was a limitation on how long the taxes would be imposed and how long the fund would be intact and so forth. It was basically to build 41,000 miles of superhighways, which we have pretty well caught up with now. The lapse of time is requiring a new decision in connection with this program.

In the meantime, the country has developed a growing crisis in mass transit areas. So now we have a controversy raging about raiding the trust fund, so to speak, to fund mass transit at the expense of building roads.

Well, because no two States are the same size, some States have a lot more interstate highway mileage than others. So the one with a lot of miles has a big interest and the one with very few miles does not have a big interest. So there is a variation of viewpoint on the side of the pro-highway people, as well as a lot of different viewpoints with the mass transit folks.

Now, I do not know what the answer is going to be, but the problem is not going to go away just because we do, or do not, pass a certain bill out here.

But to show you how the thing is boiling up, the Oklahoma Legislature earlier this year passed a resolution calling on Congress to repeal all highway taxes, gasoline taxes, all this, and leave that entirely up to the State, on the assumption that they could levy taxes and get more money to build their own roads than they were getting out of the Federal program.

Now, this may or may not be true. It may be true in one State, not true in another. I think somewhere along the line there is going to have to be some resolution of how this thing is going to balance out, because the Federal aid highway program is changing its concept. Even if we keep on building roads and automobiles, we probably will run out of fuel and cannot run them anyway.

So there are all kinds of angles to it. Have you gotten into that field of study yet?

Mr. MERRIAM. Not recently, Mr. Chairman.

As a matter of fact, because we are completing these two studies I mentioned, the regionalism study and the study of untapped sources of local government, we have begun to think about what our next major research topics ought to be.

Very frankly, one of the topics which has been suggested as a possibility is this very question, the whole business of financing, let us say, transportation in its broader sense, automobiles and public transportation.

We may very well get into that this year.

Mr. STEED. Coming from a State that has a lot of wide open spaces, highways are still a very vital need. Of course, I am very much prohighway. But that does not keep me from being unaware of the fact that these metropolitan areas have a problem, too.

I know that the highway program is not going to be left alone, that until there is some answer found to the mass transit thing, that this thing is going to boil up. It would seem to me that for the sake of everybody concerned, if there was a way, where some new direction or new understanding of the total transportation problem could be brought into focus, since it will require some action at the Federal level and a great deal at the State level, that this might be an area in which you could show some valuable leadership.

Mr. MERRIAM. It is very interesting you should suggest that, because Mr. MacDougall and I in the last couple of weeks have been talking about the importance of this problem and perhaps it is another area where getting the diverse interests that we represent together, if we could get them to agree on a recommendation, it might be something people would listen to.

Mr. STEED. In the meantime, you know, the problem before us is what action to take concerning the trust fund. Since it has to have some action, we will just find some temporary answer to it, but it will not be the final answer and it will not go ahead.

Mr. MERRIAM. My guess is that you will not resolve this problem in any conclusive manner in 1973; is that a fair assumption? Mr. STEED. That is my opinion, yes.

REVENUE SHARING

Starting out as an anti-revenue-sharing person, I warn you in advance that I am not one of the advocates of it.

Mr. MERRIAM. I was aware of that, Mr. Chairman.

Mr. STEED. Still one of the things that bothers me is the fact that it had the very strong recommendation from the President. Under this concept, Congress would have to cancel out some things we were already doing and a small amount of this new money would be in effect a transfer of ongoing programs into this fund. Well, that did not get done. It is not the President's fault. But part of the fiscal