allocation has been made, the funds are available for general maintenance and operation.

We find, however, that distinction between low-rent public housing and other impact aid categories has created problems. Restrictions on the use of entitlements from low-rent housing for projects to serve educationally deprived children have, like those of ESEA Title I, been used by the Office of Education to distort the intent of the law. We recommend that any distinction between low-rent housing entitlements and other impact aid categories be abolished. We also suggest that the U.S. Commissioner of Education be authorized to make payments on the basis of estimates, pending final counts of federally connected children, and that the Office of Education be directed to make payments as early as possible on the basis of a school district's entitlement for the preceding school year. This would solve the problem of late payments.

In addition, we suggest that the application process be expedited by having the local contribution rate be computed on the basis of State or national per pupil expenditures rather than the 'comparable district' method.

It is often difficult for a local education agency to find a comparable school district within the State and force-fit the data it does collect into its annual application.

Mr. Chairman, we have touched briefly on the highlights of our concerns about the reauthorization of elementary and secondary programs. I call your attention to the supplementary material which has been filed with the committee for a fuller examination of the problems we have identified and the solutions we propose. Thank you for this opportunity to express our views.

Chairman PERKINS. Your statement is very helpful. But, I want to make sure I understand one point.

Do you agree with me that we should start thinking of going to general aid on top of the categorical program; that is, leave Title I as it presently is? Do you also believe we should encourage equalization with this aid?

Mr. RYOR. To answer as specifically as possible, Congressman, if I understand your question, we do believe it is critical that we move towards general aid to education. We believe likewise the current categorical programs, many of them being very effective, ought to be examined against the criteria established earlier. One, that they respond to the identifiable problems.

Chairman PERKINS. Let me give you a specific example. I taught school in 1932, the first year. I got $39.10 a month. Some of my college friends in other parts of the state were drawing $123 and $125 simply because their resources were so much higher. But, at the same time, our tax rate in my home county was 75 cents to the $100 and their tax rate was only 25 cents to the $100.

Of course, the States, through various equalization programs, .have done a lot to eliminate that. But still we have those great discrepancies existing today, even in my home state.

I am just wondering if you believe we should encourage equalization through Federal legislation in the form of general aid. I don't believe we should tell them how they should spend the money. They can spend it on teacher's salaries or any way they want to spend it.

Mr. RYOR. The answer to that question, Congressman, is yes. As we point out in our paper the disparity in monies available behind each child is preventing our achievement

Chairman PERKINS. Do you believe that Title I should remain targeted on the economically deprived and that we should not move toward basing the allocations on educational deprivation as proposed by Mr. Quie?

Mr. RYOR. Congressman, if I understand your question it is do we believe that we ought to move away from targeting through a more general aid formula. The answer to that is-

Chairman PERKINS. Do you believe that Title I should remain targeted on the economically deprived, and that we should not move to focusing on the educationally deprived as proposed by Mr. Quie. Mr. RYOR. Yes, we believe that you ought to move away from targeting and towards a general funding to respond to the economically deprived students in our school districts.

Chairman PERKINS. I intend to try to get a proposal of that type through this committee. We are going to need all the assistance that we can possibly get.

I think it is time for the Federal Government to become a better partner in the field of education. We have dragged our feet far too long already-maybe a generation or two too long.

I am hopeful that we will have perhaps 30 more days of hearings-we have already had 31-and then we will commence a markup. We will do our darndest to come up with a much improved bill, which will hopefully simplify many of the education programs that are presently awkwardly arranged and awkwardly administered. Mr. Weiss?

Mr. WEISS. Thank you, Mr. Chairman.

Dr. Ryor, I very much welcome your participation and, of course, this is very much a learning process for me. It is the first time I am really going through the legislation at a hearing level, line by line, so to speak.

Let me ask you, on the targeting question, I am not sure if I really understand your position.

You know, in the public works legislation that the Congress has passed, what we have done has been to provide assistance, not just on the basis of per capita unemployment, but on the basis of concentration, rates of unemployment.

I think that the provision in Title I of ESEA is very much akin to that.

What I think the formula suggests is that there is a distinction in the amount of need that a community needs when it has a very large concentration of children from low income families, rather than those where there may be just, you know, a number of low income children, but mixed into the overall, a number of children that is not a critical problem.

I wonder whether in fact you are suggesting there ought to be no consideration, no special consideration given to those communities where there is a higher concentration of low income and impoverished families, or just what is you position?

Mr. RYOR. No. It isn't that we believe there should be no effort to achieve some equity in education for low income and educationally

deprived students. The point is the program was initially conceived with the notion that most of those students were contained in specific parts of the city, or geographical or governmental areas. Subsequently, as you well know, there have been many integration orders that have caused the integration of public schools, a goal that we have long supported as well, and consequently the needy children and the children who have need for special income, special programs, have been distributed across the school district at large. Consequently, when we have a threshold requirement, say, that 60 percent must fit this definition, that means that there are probably 40 percent who have been moved or perhaps are in other schools within that same school district, who are getting no attention at all.

We believe the need in the program would be better met, and the needs of the children would be better met, if in fact we opened it up to a general aid in that school district to deal with low income families or children, I should say, from low income families, one, first to establish an assessment of the educational needs of those chidlren; two, to put together a plan, a program to meet those specific needs, and to submit that plan to the Office of Education for funding; three, that there be an evaluation mechanism to see how well we have done in meeting the needs of those children.

It should be done schoolwide as opposed to simply targeting in a particular area, and to meet the needs of all the children.

Mr. WEISS. You are talking about districtwide rather than individual schools, but you are not talking about nationwide on a per capita basis.

Mr. RYOR. No, absolutely.

Mr. WEISS. Thank you very much. Thank you, Mr. Chairman. Chairman PERKINS. Mr. Quie?

Mr. QUIE. Thank you.

I am sorry I am late this morning. I had another meeting to go to. I am glad I have a chance to be here and ask you, John, about your testimony.

Going through this quickly, I am perplexed on a couple of matters. One is that you talk about equalization. Yet, you wanted the Federal Government to go directly to the local school district and let the State then tend its own business, let the legislature decide the extent to which the state education agency ought to control. How do we bring about that equalization if we divorce ourselves from state government?

It seems to me it is a very important principle, I might say, when the Federal Government bypasses the state which has responsibility for elementary and secondary education.

As you know, in impact aid we do bypass the state and have all kinds of battles on equalization here. We don't equalize with impact aid at all. I mean, that is kind of an anomoly to me.

Mr. RYOR. Well, Congressman, I think the language says wherever possible we ought to move those funds directly to the local school district to meet the specific needs of students. We are not saying there should be no Federal ties or that there shouldn't be some cooperation with the State itself.

But, we think that it is a bad use of money, for example, to set up a series of rules and regulations in addition, which has happened so often, to rules and regulations imposed on the Federal legislation for educational programs, thus compounding the bureaucratic red tape and in terms of cost effectiveness, leaving fewer of the tax dollars available to meet the needs of the children in the schools where the funds were intended to go.

I think there must be some line of balance between the two. One is that the State does have some control over specific programs and directions within the State, and two, the need of the local to assess its own peculiar programs, to submit those programs paticularly in regard to the Title I programs, directly to the Office of Education for approval, to meet the needs of those students as they see those needs at the local level.

We see no need in those instances to run those programs thorugh the State department of education.

Mr. QUIE. How do you propose to bring about the equalization? I was talking not just about Title I, but equalization. You are saying that you need more equalization between school districts. I know the courts have done some-for instance, California with the Serrano decision, which was a State court decision, not a Federal court decision, as in Rodriguez.

While many of us were impatient, at least California has made some movement to that extent. We did it in Minnesota, without pressure from the courts at all. But how do you bring about equalization with Federal aid? I can understand it if we went after the state governments, and made something contingent on it.

It sounds to me like you want to fill in for their bad judgments, if I read your testimony.

Mr. MCFARLAND. Congressman, you know the financing of education from state to state is a crazy quilt. Some are state financed, some almost all with local, to give the two extremes. We are suggesting in here the elimination of the present Part B because it has been ineffective, there has been little money to be incentive for any kind of equalization. So, we are suggesting

Mr. QUIE. Part B is just a part of Title I. Your equalization was more than just disadvantaged children. Yours was the total picture of education.

Mr. MCFARLAND. That is right. At this point we do not necessarily have any specifics to suggest, just recognizing the problem that something has to be done. I agree with you that in some of the suggestions we have made, and in terms of what now exist, that there certainly would be complications.

It seems as if we are going two ways. But we did suggest earlier on that the Congress initiate a ten-year study, or a study to really get into this, which may be no more than a collection of existing data, since there are rooms full and school buildings full of school finance data.

But, to establish an overall kind of a program to meet this need

Mr. QUIE. From my own point of view, I think we are going to have a very difficult time on the part of the Federal Government to equalize within state boundaries. I think it is our role, if there is a

difference in ability of states to finance education, to equalize between states. But, equalization is not just an equal amount of money.

Mr. MCFARLAND. That is exactly right.

Mr. QUIE. For some students you have to expend considerably more, twice as much, in order for them to have equality of educational opportunity. I agree with you that the property tax is an unfair tax, but when one looks at the property tax as used in some States, I still remember that adage from studying public finance, that a bad tax accepted is better than a good tax that hasn't been accepted yet.

If we are talking about education, I would sooner get property tax money for education than no money from some other source.

Mr. RYOR. We are not suggesting, Congressman, that you do away with property tax without some notion where we are heading to finance public education in its place. I don't think the two issues are mutually exclusive.

The problems you identify, needy children who are from families which are economically deprived or which have not had the advantages of the upper middle class, if you will, I think are problems that can be dealt with aside from the question of incentives in moving toward general aid.

It is altogether at least conceptually possible to encourage the States to move towards a greater effort and to have the States which are not now putting forth an effort, and local districts that are not now putting forth effort to hold up their end of the bargain to make the funds attach to some minimum or some threshold effort by those two levels; at the same time, address ourselves to the categorical programs that have merit, and specifically relate to the problems of deprived children.

Mr. QUIE. I have no problem with the study. I think it will be good. We have done some other studies. As you say, Stan, it may just be pulling together all that has been studied before. But, I know we have a very difficult road to walk on that.

Mr. Chairman, if I may pursue just one other line of questions. You mentioned also, John, that you want to remove educational disadvantage from the law and have Title I apply only to low income students. Again, I am surprised at that.

I thought everything that we learned from the beginning is that we are really talking about educationally disadvantaged children, and economically disadvantaged as a way to get a handle on them, when we didn't know how to get a handle on it in 1965.

Now, what happens presently in Title I is that, when you get to the target school you divorce yourself entirely from economic disadvantagement, and you go just to educational disadvantagement. It doesn't make any difference whether the child is a doctor's child or a child of a person on welfare. They both receive the benefit.

Let me tell you what has happened, I believe it was in CharlotteMecklenburg, where a school attendance area that had the least number of poor children and could not be counted as a target school, actually had the highest number of educationally disadvan+aged children. When they became one of those 13 test school