Special Message to the Congress on Special Revenue Sharing for Education.

To the Congress of the United States:

A very substantial part of what American government does is directed to the future and to the creation of a suitable legacy for generations to come. In this sense, government reflects a central purpose of the basic family unit and seeks to serve that purpose: as we move to condition the future, we move also to prepare our children to take their place in that future. In this task, all levels of government recognize the Nation's responsibility for educating its youth.

Primary responsibility, of course, rests with State and local governments, as it should. The Federal Government can help provide resources to meet rising needs, but State and local education authorities must make the hard decisions about how to apply these resources in ways that best serve the educational needs of our children. To enable State and local authorities to do this more effectively, I am proposing today a new system of Special revenue sharing as a means of providing Federal financial assistance for elementary and secondary education.

This message is the last of six special revenue sharing proposals which I have put forward over the past two months. Combined with the administration's $5 billion general revenue sharing plan and welfare reform proposals, special revenue sharing---as a new and more flexible approach to Federal aid--would fundamentally reform the fiscal roles and relationships of American federalism. The other five special revenue sharing proposals have been in the areas of urban community development, rural community development, transportation, manpower training and law enforcement assistance.

The plan I am putting forward today for Education Revenue Sharing brings together more than 30 Federal aid categories and deals with one of the Nation's most complex systems for providing public services. There are 46 million students presently enrolled in public schools in America, with more than five and a half million more in non-public schools. There are more than 117,000 schools and nearly 18,000 public school districts, each with its own unique conditions and each with its own problems.

Federal expenditures for elementary and secondary schooling over the past decade are projected to increase from $0.9 billion in fiscal year 1961 to $5.5 billion in fiscal year 1972. Yet there are serious problems with the way in which this aid is provided.

THE PRESENT SYSTEM

Under the present piecemeal system of Federal aid, education grants are available to local schools under 38 separate authorizations for "instruction," 37 separate authorizations for low-income students, and 22 separate authorizations for reading instruction. The confusion is so great that some school districts have had to hire separate staffs charged solely with cutting through the maze of applications, guidelines, regulations and reporting requirements which are an intrinsic part of the present grant system.

There are other problems:

--The time, energy and imagination needed to bring educational reform is frequently drained off into what is an essentially non-productive effort to qualify for Government grants. Yet, at the same time, rigid qualifications for grants frequently stifle creative initiative. In the end, a system which ought to promote innovation instead discourages it. And because Federal programs are resistant to change, we see money being spent on programs which may have outlived their usefulness, or that simply are ineffective, while funds for new ideas cannot be obtained.

--Educational planning is made difficult because of the fragmentation of grants. Under the present system, a community must make a series of separate applications to a series of Federal officials. There is no assurance that every proposal will be funded, or that any proposal will be funded. Consequently, the present fragmented procedures virtually eliminate any possibility of preparing a comprehensive, coordinated program.

--There is little accountability under the present system; if a program fails it is difficult to assess responsibility. Although it is the common response to blame Washington if something does not function according to design, such an exercise is usually futile given the cumbersome nature of the Federal bureaucracy.

--There is little flexibility in the present system. Individual grants are often too narrowly defined and designed to achieve the things Washington wants, while at the same time allowing little latitude to meet individual community needs.

--There has been little useful evaluation of how Federal aid programs under the present system help children learn more effectively, or of how they provide the children with equal educational opportunities. The diversity of the country and the large number and great variety of Federal aid programs have made it impossible for those at the Federal level to measure the success or failure of their efforts, and so we resort to judging

effectiveness by how much we spend rather than by how much we accomplish.

My proposal for special revenue sharing for education is designed to overcome these problems by substituting a basic new approach to providing Federal assistance. To help formulate this proposal, the Office of Education held ten regional hearings to discuss the specifications for Education Revenue Sharing, and my proposal has benefitted from the views of educators and those interested in education all across the Nation.

EDUCATION REVENUE SHARING

Education Revenue Sharing would revitalize the relationship between the Federal Government and State and local governments. It would stimulate creativity and new initiatives at State and local levels. My proposal would establish a new instrument of Federal assistance which would bring together more than thirty major Office of Education programs representing approximately $2.8 billion in grants in the 1972 budget, and provide for an increase of $200 million in total funding in the first year.

These funds would provide support for educational activities in broad areas where there are strong national interests in strengthening school programs. The national priority areas included are compensatory education for the disadvantaged, education of children afflicted by handicapping conditions, vocational education, assistance to schools in areas affected by Federal activities, and the provision of supporting services. This new Federal aid instrument would have the following important features:

AUTOMATIC DISTRIBUTION OF FUNDS

Funds would be distributed automatically on the basis of a statutory formula which takes account of the total school age population in each State, the number of students from low-income families, and the number of students whose parents work or live on Federal property. No State would receive less money under Education Revenue Sharing than it receives under the present grant system. In addition, authority for advance funding would be requested to facilitate careful planning free from the vagaries of the present practice of delayed appropriations.

NO FEDERAL APPROVAL OF STATE PLANS

States would no longer be required to submit exhaustive plans for extensive Federal review or Federal approval, but would simply develop and publish a plan in line with State and local needs so as to permit all concerned citizens to become involved with the allocation of these Federal resources. States would also appoint an advisory, council broadly representative of the public and the education community, in order to further insure that all interests are heard. This new system would substitute genuine citizen participation for routine bureaucratic sign-off.

BROAD DEFINITION OF PURPOSES

The areas of Federal assistance would be broadly defined in keeping with national interests.

--The provision of equal educational opportunities to all of our children is a key national priority. As I pointed out a year ago, the most glaring shortcoming in American education today is the lag in essential learning skills among large numbers of children of poor families. The largest Federal program in education--Title I of the Elementary and Secondary Education Act--was designed to meet the special educational needs of these children. The Education Revenue Sharing Act would provide that over one-half of the $3.0 billion proposed for the first year be used for providing compensatory education for disadvantaged children. These funds would be passed through directly to local school districts which enroll large concentrations of these children.

--The specific needs of handicapped children are and would continue to be a matter of concern to the Federal Government. When time is so critical to the training and social development of these youngsters, any delay in the funding of their education can have irreparable consequences. Nevertheless, in the present circumstances, delay is common. I propose to change this. Funds would be allocated directly to the States and the procedures for obtaining these funds would be simplified.

--For many years, the Federal Government has provided assistance for training in industry, agriculture and the crafts in our Nation's schools. This training is vital to the Nation's economy. But the needs in these areas are constantly changing. Vocational education of tomorrow may bear little resemblance to today's form, but its task will be the same: to demonstrate to American youth the worth and dignity of work, and to help them to obtain the specific skills that other forms of education cannot supply. As with my proposal for Manpower Revenue Sharing, States and local educational authorities would be authorized to determine how best to use Federal funds for vocational education in order to meet the needs of particular communities and individual workers.

--An ongoing responsibility of local public schools is to provide education for Federally connected children. The Federal Government rightly provides aid to help meet the financial burden of children who live on Federal property--hence property which provides no taxes for education. To offset the loss of local school taxes, Education Revenue Sharing would provide a direct pass-through to local school districts enrolling such children. For those students whose parents only work on Federal property, and live on locally taxable land, funds would also be provided. In this case, however, the funds would be distributed to the States which would determine the degree of financial need created by those circumstances and allocate funds accordingly.

--The Federal Government currently offers an array of programs designed to purchase specific educational materials or services. These programs range from the provision of textbooks and other library resources to the support of guidance and counseling services. Education Revenue Sharing would continue this aid but would pull together programs from at least fourteen separate statutory provisions into one flexible allocation under which States can decide how best to meet local education needs.

GREATER FLEXIBILITY

Under this proposal for Education Revenue Sharing, States and local school districts would be given far greater flexibility than is presently the case in deciding how funds should be spent in serving the national priority areas. In addition to the broader definition of national purpose, States would have the authority to transfer up to thirty percent of funds--except those which are passed through directly to local schools--from one purpose to another. This would enhance flexibility in the application of funds for education, and permit the States to make substantial adjustment in their educational plans as their educational needs require.

OTHER FEATURES

As with my previous special revenue sharing proposals, Education Revenue Sharing would preserve all existing safeguards against infringements of civil rights by assuring that these funds would be subject to Title VI of the Civil Rights Act of 1964.

Non-public schools bear a significant share of the cost and effort of providing education for our children today. Federal aid to education should take this fully into account. This proposal would do that by considerably broadening the authority for extending aid to students in nonpublic schools. Non-public school students would be counted in the reckoning of population for purposes of allocation, and all forms of educational services would be available to them.

As an important precondition to the receipt of Federal funds for education of the disadvantaged, I propose a requirement for States to certify that services provided in all schools within a given school district from State and local funds must be fully comparable. This is a considerable improvement over the present law. It would assure that Federal funds for compensatory education programs would actually be spent on services beyond those provided for all children, and thus for the first time would truly guarantee that these funds would be used to help equalize learning opportunity for the disadvantaged.

THE FEDERAL ROLE IN EDUCATION

The proposal I am putting forward today reflects what this administration considers to be the appropriate Federal role in elementary and secondary education. This Federal role is three-fold: (1) the allocation of financial resources on a broad and continuing basis to help States and local school districts meet their responsibilities, (2) the provision of national leadership to help reform and renew our schools to improve performance, and (3) the concentration of resources to meet urgent national problems during the period when they are most :intense.

Education Revenue Sharing would strengthen the first by providing a new and expanded system of Federal aid to our schools. It should be noted in this connection that my proposals for general revenue sharing and welfare reform would also both provide and free additional fiscal resources which States and localities could devote to the rising costs of education. At the present time, State and local governments spend forty percent of their revenues for education. Under general revenue sharing, which would distribute a fixed portion of the Federal tax base to the States and localities to use as they determine, education would most certainly be a major beneficiary. These funds would total $5 billion in the first full year of operation. Similarly, the administration's proposals to reform the Nation's failing welfare system would free the States of a significant portion of fast-growing welfare costs at the same time that it would provide a better and more stable home environment for millions of children.

To strengthen the Federal leadership role in reforming and renewing our Nation's schools, I proposed a year ago the creation of a National Institute of Education to bring to education the intensity and quality of research and experimentation which the Federal Government has, for example, devoted to agricultural and medical research. The National Institute of Education would serve as a focal point for identifying educational problems, developing new ways to alleviate these problems, and helping school systems to put the results of educational research and experimentation into practice.

As an example of the concentration of Federal resources to meet urgent national problems during a period of intense need, I proposed in May 1970 an Emergency School Aid Act to provide $1.5 billion over a two-year period to help meet the special problems of desegregating our Nation's schools. Progress in school desegregation has been accelerating. The Emergency School Aid Act would help local communities expedite and adjust to this change, while maintaining and improving the quality of education in affected schools.

Taken together, the National Institute, the Emergency School Aid Act and Education Revenue Sharing represent a bold new approach to fulfilling the Federal role in education and to meeting the educational needs of the 1970s

CONCLUSION

The education of our children transcends partisan politics. No one benefits from failures in our system of education, and no one can fail to benefit from improvements in the means by which education in America is given all the assistance proper at the Federal level. The effort to provide that proper assistance, the effort to encourage reform where reform is needed, and the effort to extend to all American children the advantage of equal educational opportunity have all been a concern of this administration as, indeed, they have been of other administrations. These efforts continue.

I believe we must recognize that the Federal Government cannot substitute its good intentions for the local understanding of local problems, for local energy in attacking these problems, and for local initiatives in improving the quality of education in America. We must also recognize that State and local authorities need Federal resources if they are to meet their obligations and if they are to use the peculiar advantages of State and local knowledge, responsibility, and authority to their fullest potential. Education Revenue Sharing accommodates the Federal role in national education to both these realities, and it lays the foundation for a new and more productive Federal-State relationship in this area of vital national concern, just as the previous revenue sharing proposals have afforded similar possibilities in their areas of specific concern.

I consider each of these proposals vitally important in and of itself. But in the aggregate, the importance of revenue sharing is greater than the sum of the parts which comprise this series of legislative proposals. For we are seeking nothing less than a new definition of the relationship between Federal Government and State and local governments-one which answers the needs of the present and anticipates the needs of the future.

RICHARD NIXON

The White House

April 6, 1971