Mr. ALVES. These four concepts presented here, while they are not necessarily all the concepts that could be evolved, are typified by four bills, three of which are pending before this committee and one of which has been introduced in the House.

The length of the shaded portions of the bars in the chart represents the amount of non-Federal money which the States and local districts must provide per child in order to qualify for the amount of Federal money per child represented by the length of the solid portions.

In each of the four illustrations the States are arranged in the descending order of average per capita income. If we had a full chart for the 48 States we would have 48 bars in each section. We just show the high, average, and low States in this chart.

For purposes of comparison of distribution and matching methods, without regard to amounts of total appropriations, the chart is scaled in each case to $1 expenditure for school facilities per child in the average State from both Federal and non-Federal funds.

It will be noted in each of the four illustrations that of the $1 per child in the average State, 50 cents comes from non-Federal sources and 50 cents from Federal sources.

In other words, in each of the four sections the word "average" represents the average State, which under each concept would contribute 50 cents non-Federal money to match 50 cents Federal money.

Now, let us notice what happens in the high and low per capita income States under each of these four concepts of Federal aid for school construction.

Under S. 137, the relationship between non-Federal and Federal funds remains 50-50 regardless of the taxpaying capacity of the States. That is, high-average- and low-income States all contribute 50 percent of the cost of the program.

Under this scheme the low State would be required to make between three and four times the effort to raise its 50 cents as would be required by the high State to raise its 50 cents, because relatively the high State has more money and the low State more children.

Under H. R. 3630-and I introduce it here only for illustrative purposes-each State would be required to raise the same amount per child, regardless or its ability, but the Federal grants per child would vary, as indicated by the solid portions of the bars.

In other words, under that concept each State contributes the same amount per child, and the Federal Government varies its matching inversely to the fiscal capacity of the States.

It would result in 86 cents per child in the high State, and $1.53 per child in the low State, as compared with $1 per child in the average State, from both Federal and non-Federal sources.

Such a method, of course, fails to recognize, among other things, that serious school housing shortages exist in the top- as well as in the low-bracket States. The high States also have their problems with low property assessments and bonding limitations.

Now, if we may go to the third section, which refers to provisions of S. 1670, it proposes to distribute a like amount of Federal money per child to all States, regardless of the financial ability of the state, but it requires variable matching according to ability as a basis for States to qualify for Federal funds.

Thus, the high State would have $1.61 per child and the low State 75 cents per child, as compared with $1 per child in the average State from both Federal and non-Federal sources.

Although this bill has many commendable features, it fails to recognize that the poorest States require fully as much money per child for school facilities as do the wealthy States.

Senator HUMPHREY. What this bill does is to give uniform grants on the part of the Federal Government; is that right?

Mr. ALVES. That is right.

Senator HUMPHREY. And it makes such grant available on a sliding scale of ability to match on the part of the States. It does not cut out the States that are poor from being able to meet Federal grants. It reduces their amount of State participation in order to be able to obtain the uniform amount which is allocated by the Federal Government.

Mr. ALVES. Yes.

S. 287-except for the funds excluded by Senator Magnuson's amendment.

Senator HUMPHREY. The critical areas?

Mr. ALVES. Yes; provides for an equal expenditure per child from both Federal and non-Federal sources. See the bottom section of the chart.

In passing, note that it agrees with the top section in that the combined lengths of shaded and solid portions are the same for all States. It provides for variable financial participation by the States, according to the taxpaying capacities of the States.

As will be noticed in the chart, the high State would contribute 60 cents to match 40 cents of Federal money, to provide a total of $1 per child. The low State would be required to contribute 40 cents to match 60 cents of Federal money to provide a total of $1 per child. A more complete equalization formula would extend Federal financial participation to a wider range than 40-60.

I would say now, in partial answer to one of the questions you raised awhile ago, Mr. Chairman, that instead of having a wider range of percentage participation, the 40-60, I think, recognizes some of the practical aspects you referred to.

If we extended the range of 40-60, say, to 20-80, allowing more complete equalization, then we may get into trouble, as you indicated in your question. Certain States may not go along. So S. 287 is not a complete equalization. It is a compromise.

Senator HUMPHREY. That is what I wanted to get for the record, the explanation of that, because, always, in dealing with this legislation, in the hope now that we can get it out of committee and onto the calendar, we have to go back to just how we reached this formula, and what are the factors that were considered in the making of the formula.

Mr. ALVES. It is correct to state that these principles, as set forth by Commissioner McGrath, as a matteer of fact, recognize some phases of compromise. It is obvious that the formula in S. 287 is a compromise between full equalization and the flat 50-50 matching under S. 137.

I have only one other comment, and that is to emphasize the fact that in the top section and the bottom section, the combined lengths of shaded and solid portions of the bars are the same for all States. Senator HUMPHREY. Yes.

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Mr. ALVES. Now, the way in which you get the variations in the lengths of shaded and solid portions is the only difference, which in the S. 287 formula recognizes equalization.

Senator HUMPHREY. Yes.

Mr. ALVES. What S. 287 does is to assure for each State, from combined Federal and non-Federal sources, a uniform expenditure per child which, of course, still leaves any State, if it wants to, free to go beyond that as far as it wishes.

Senator HUMPHREY. I have a quizzical look here because there are differences in construction costs, there are differences of standards in different areas. You do not have to build the same kind of school in Louisiana that you do in Bemidji, Minn., and you do not have to build the same kind of construction in Los Angeles, Calif., as you do in the woods of Maine. And whether or not you are taking into consideration those variables in this formula you have placed before us in S. 287 is somewhat doubtful in my mind.

Mr. ALVES. Certainly, the point you have just referred to is not recognized in 137.

Senator HUMPHREY. That is for sure. I do not want to make any valued judgment on any of these proposals. What I am thinking about is: We are going to be asked all kinds of questions about this. It is something like a housing program. If you talk about the same amount of housing money for the State of Minnesota for a million people as for a million people in California, I would say you are off the beam, because it would cost more to build houses in Minnesota than it does in California. We have to build houses for 35 degrees below zero. California never would admit it even got down to 15 degrees above zero. We have these variables in actual cost, so that I say the amount of money, equalization per pupil, construction money, would not necessarily be a fair distribution.

Mr. ALVES. Should the point you are talking about, Mr. Chairman, be corrected by a change in your equalization program or by a corrective factor? I am not prepared to say.

Senator HUMPHREY. I just wanted to get this out so we can do little thinking about it.

Mr. ALVES. I cannot answer the question as to the difference in construction costs, say, of the school plant below the Mason-Dixon line anywhere across the South.

Senator HUMPHREY. There may not be too much difference. I am not in a position to say.

Mr. ALVES. It seems to me I recall not too long ago seeing a reference to this. I seem to have the impression that this reference indicated a range from about 15 to 20 percent difference. I prefer that not to be in the record unless I can check it and verify it.

Senator HUMPHREY. Your statement will cover your observation very well.

Mr. ALVES. I would say with the exception of climatic conditions and the possible exception of the cost of land which is not included in S. 287

Senator HUMPHREY. And labor.

Mr. ALVES. I am not sure that there is much difference.

Senator HUMPHREY. There is quite a differential in labor costs.

Mr. ALVES. I had a friend in Texas the other day who wrote me and said he was paying a given amount for bricklayers, and it is about the same as they pay up here.

Senator HUMPHREY. That may be so.

Mr. ALVES. I do not know.

Senator HUMPHREY. I think those are matters we ought to just give a little extra thought to in setting up what we call fair and equitable distribution.

Mr. ALVES. Of course, perhaps, to offset that, we might raise some questions also as to why in the States that have a high ratio of children of school age to adult population, accompanied by low per capita income, you might not want some corrective factor there which is partially recognized in the equalization formula. I am not prepared to answer the questions in the construction field we have raised, but my guess would be it is not a large differential.

Senator HUMPHREY. With the equalization principle that you are explaining here in S. 287, I have no pride of authorship at all in this legislation. I am, however, just a little bit concerned about the fact that in some of these poor States, so-called, they insist on some rather expensive practices.

Now, I am not trying to upset the social pattern, and I am not one of those who will insist in this that we ought to eliminate segregation, and so on, even though I have some very frank and honest opinions about it. I notice, for example, in Washington, D. C., there is a Negro school in this city crowded to the hilt, overflowing with children, and then there is a school for white children only half full, and yet they will not even think about moving a few children around to give them proper accommodations.

Some of the poor States have made themselves poorer by trying to maintain two plants.

Mr. ALVES. Both of which are overcrowded.

· Senator HUMPHREY. Both of which are overcrowded. I am willing to concede that. They need more space. I am willing to concede that they ought to be given every opportunity to get their educational level up to the so-called well-to-do States.

Let me express what my folks from my own State would say. Maybe we have people there who would like to have two sets of schools, one set of schools for the poor children, and another set of schools for the children of the rich. We do not set up schools like that. They all go to the same schools unless they go to private schools or parochial schools.

We get into an area where the costs of education are increased every single day by the fact that they have to have two sets of teachers, two sets of school buildings, two plants, all down the line. I realize you cannot go into these communities and upset the social pattern by a simple stroke of a magic wand, but when they are asking for Federal funds, that has to be recognized.

Mr. ALVES. The only question I raise, following your comment, Mr. Chairman, is that on the basis of my experience, I do not think I could say that they have any empty buildings, so there cannot be any extraordinary costs so far because they have not even enough buildings to house them now.