Impact Aid’s 60 Years: 1950 – 1970

1970 – 1990 >

As the Impact Aid community prepares for the 60th Anniversary of the Impact Aid Program, IMPACT has prepared a three-part series on the history of the program. This issue will highlight the years between 1950 and 1970, followed by the July-August issue looking at the years between 1970 and 1990 and finally in the September-October issue the last two decades will be highlighted as NAFIS formally recognizes the 60 years of Impact Aid on Tuesday night, September 21 in conjunction with the NAFIS 2010 Fall Conference.

On September 23, 1950, Harry S Truman signed into law Public Law 81-815. It provided for two programs: Title I, the Office of Education (Commissioner of Education) was authorized to make grants to States to assist them to inventory existing school facilities and survey the need to construct additional facilities; and, in Title II, the Commissioner was authorized to provide financial assistance for the construction of schools in federally affected areas. A week later, Truman signed into law Public Law 81-874. Referred to as Impact Aid, the legislation authorized the Commissioner to make contributions toward operating costs of the schools overburdened with increased attendance as the result of Federal activities and deprived of local revenues because of the tax-exempt status of Federal properties.

Recognition of Need

With the start of World War II and the vast number of families moving to defense production and military installations, Congress provided federally owned “war housing” and schools with the passage and later amendments of the Lanham Act in 1940. In the years following the war, Congress recognized the need for continued support of these schools. Legislation passed in 1946 acknowledged large numbers of children living on tax-free government reservations posed a continuing problem for some local educational agencies, and the federal government had some responsibility for these agencies, but no substantive legislation was passed.

After World War II, hundreds of thousands of troops stationed in Europe were brought home. Enormous population increases faced communities that served these installations. Local communities forced to deal with the population surge on nearby military bases found themselves having to provide increased services with no increased tax base from which to draw financial support. A statement from the introduction of the House Report No. 81-2287, which accompanied the original Impact Aid legislation to the House floor, describes how the House Education and Labor Committee perceived the impact military families placed on local communities.

“Some federal projects employ tens of thousands of people, some of whom live on federal property and others live in adjacent communities. Other projects employ only a handful of people or none at all. In some cases, the population increase has been very sudden and substantial, while in others it has been gradual over a period of years. As a result, problems varying in extent and complexity are created by these federal activities for local governmental agencies in the provision of public school facilities and services.”

The initial impact on school systems was felt in the Midwestern states of Kansas and Oklahoma. Both states hosted large numbers of troops during WWII. When these troops returned, military installation populations grew almost overnight. Local school districts soon found themselves overburdened by federally connected children and funding to educate them scarce.

In the late ‘40s and early ‘50s, the issue had come before Congress, but inadequate support led to severe conflicts resulting in refusals by some districts to educate federally connected children and attempts were even made to charge tuition. This led the House Education and Labor Committee to initiate a study before proceeding with legislation. The committee held hearings and conducted field investigations in more than 42 states, representing nearly 75 percent of all federally connected school districts.

Findings of the Committee noted that “without continued federal help, more than 1.8 million children in these federally impacted areas would not receive normal school services….The U.S. has become an industrialist, landlord, or a businessman in many communities.” However, since the land is tax exempt, the federal government has not accepted “the responsibility of the normal citizen in a community” to meet its financial obligation to support public schools under the existing states school finance laws.

Initially Congress differed over the duration of the legislation initially introduced on the House side by Representative Bailey of West Virginia. The House version made the program permanent, but a conference with the Senate changed this to a four-year authorization. A Senate version S. 2317 was written chiefly to provide federal aid for the construction of new schools in what was called “defense areas.” The Senate amended the House bill by giving it a three-year authorization, but a later House/Senate conference committee settled on the four-year term, which was then passed by both bodies. The outbreak of the Korean War in June of 1950 and the military buildup probably expedited the bill’s passage.

The legislation enjoyed a broad base of support including the American Parents Committee, the AFL, the National Citizens Committee for Public Schools, the NEA, the American Municipal Association, and a Washington, D.C.-based group called NationWide Citizens Mass Meeting. The only organized opposition came from the Citizens Public Expenditures Survey, Inc.

The Committee Report No. 81-2287 stated that federal impaction creates two types of problems:

1. Federal ownership of property reduces local tax income for school purposes, and
2. A federal project or activity causes an influx of people into a community, resulting in an increased number of children needing an education.

The law created two programs: Section Two and Section Three.

Section Two

This section tried to address those local districts that suffer a substantial and continuing burden through the federal government’s acquisition of real property in the district, and the consequent removal of such property from the district’s tax base. Section Two covered only those purchases made after 1938 because the House Education and Labor Committee decided purchases made after that year constituted the bulk of the problems for school districts. (Few changes were made to this section until 1994 – Improving America’s Schools Act of 1994).

Section Three

As today, this section was built on the concept of putting children into categories based on what Congress considered their impact to be on a school district. Subsection 3(a) covered children living on federal property with a parent employed on federal property and subsection 3(b) covered children who either live on federal property or have a parent employed on federal property, but not both. The concept of a Local Contribution Rate (LCR) was established to determine payments. The LCR was not determined on state or national average per-pupil expenditure, but rather on the per-pupil spending of an eligible district compared to other districts in the state. In other words, a district payment was based on what we call today the general comparable district method.

The original law set the financial burden of a 3(a) student at 100% of its LCR and a 3(b) student at 50 percent of its LCR. Using the comparable district method to determine a district’s LCR brought some interesting variations in district LCRs depending on the state in which the school district was located. For example, the LCR was $1.17 in Delaware, where only one district applied, and the highest was $228.55 in Illinois. Average rates were less than $100 in 15 States, and more than $100 in 34 States. Average rates varying between $150 and $200 were determined for districts in 15 States, and in only two States were the rates in excess of $200.

In the Program’s first year, the number of federally connected children under subsection 3(a) totaled 52,000 while subsection 3(b) children reached over 390,000. 1,712 local educational agencies received funding under the program totaling more than $29.6 million. By 1955 (the last year of the first authorization), 2,683 applicants received more than $71.6 million in payments.

School Construction

Public Law 81-815, which was actually signed into law a week before Public Law 81-874, consisted of two titles.

Title I assisted states by examining existing facilities and developing plans for school construction programs, and determining if state and local government contributions were adequate to construct those facilities. Three million dollars were appropriated for Title I.

Title II allotted funds for the construction of school facilities on federal property. Congress appropriated $74.5 million for Title II, and an additional $25 million for contract authorizations.

(Compare the FY’10 facility total under the Impact Aid Program of $17 million).

1955-1965 – The Program Grows

Although the program was reauthorized in the 85th Congress (1958), amendments were added to the program in 1953, 1954, 1955 (extended 3(a) category to include children of parents in the uniformed services residing on base), and 1956. Off-base military were added to the 3(b) category under P.L. 84-949 in 1957. Students residing on Indian Land became eligible in the 1958 amendments and the LCR calculation was also amended to allow school districts the option to use state and national average per-pupil expenditures to establish their minimum rate should the comparable method create a rate lower than one-half the state or national average per-pupil expenditure. (This process is still in use today). From the time that President Truman signed Impact Aid into law until 1968, more than 4,300 of the nation’s 16,000 school districts received funds from Public Law 81-815 and Public Law 81-874.

1965-1970 – The Competition for Dollars

1965 brought about The Great Society and with it came the competition for funding. For 15 years, Impact Aid, which had enjoyed full funding, was now in a race with all other social programs for a limited amount of financial resources. The time for full-funding was about to come to an end, despite attempts from the program’s support group. In hopes of increasing the program’s congressional support base, supporters pushed to expand Impact Aid to include urban students.

Prior to the enactment of P.L. 89-313 in 1965, the eligibility threshold for Section 8003 was six percent for districts with an enrollment of 35,000 (ADA) or more in 1957 and which did not qualify for payment on the three percent requirement prior to FY’59. P.L. 89-313 set the eligibility standard which is used today at three percent of enrollment or at least 400 students (ADA).

The 88th Congress (1963-1964) passed P.L. 88-665 which directed the Commissioner of Education to provide Congress with a thorough review of the Impact Aid and School Construction Program by June 30, 1965. The major findings and suggested revisions supported the continuation of the program.

Beginning with FY’69, appropriations were consistently and substantially insufficient to satisfy Impact Aid entitlements (Maximum payment), so the battle for dollars began.

After 20 Years

In 1951, 2.9 million pupils were in attendance in eligible school districts. This total approximated one-eighth of the Nation’s public school attendance in that year. The 23.2 million pupils in attendance in school districts eligible for payment in 1970 represented about 65 percent of the nation’s public school attendance. In FY’70, federal payments helped to support educational services for four times as large a segment of public elementary and secondary school ADA as in 1951.

In 1951, 34 school districts were eligible under Section Two of P.L. 815 and received a total of $298,481.09. In fiscal year 1970, 133 school districts claimed assistance under Section Two of which 132 were determined to be eligible and received $3,673,827.

During the same period 1951-1970, P.L. 81-815 brought a total of $1,389,642,000 for the construction of school facilities.

1970 – 1990 >