Senator PELL. Very roughly if the nonpublic schools went out of business, what would be the additional tax burden put on the citizens of Rhode Island?

Mr. BURKE. About 25 percent of the children are in private schools and I suppose one could assume an increase of 25 percent. I wouldn't think it would be that much because obviously there would be some slack basis and some of the public schools we know that the peak of enrollment in secondary and elementary probably is going to occur by 1975 or 1976 and it is conceivable that the leveling off in 1980 in terms of school construction and material facilities which may pose a problem. Of course, in terms of teacher qualification for education it is very difficult to assess.

Senator PELL. Actually from the point of view of mathematics it would increase a third because presently we have 75 percent of our children in public schools and, therefore, if we increase that by 25 percent the present cost would have to go by one-thrd.

Mr. BURKE. If you assume that the same amount of money expended per child would be required to incorporate the 25 percent which are not now in the public schools in public schools then that would be a correct analysis, but I am not sure that that necessarily follows.

Senator PELL. What is the present cost of education to the taxpayers of primary and general high school education?

Mr. BURKE. The expenditure on the part of local communities in the last fiscal year, fiscal year 1971 is about $95 million and the expenditure by the State in the form of State aid is about $65 million.

Senator PELL. Well that is 160 million and if you increase that by a third or a quarter it would be quite a load for the taxpayers.

Mr. BURKE. Yes, it would.

Senator PELL. The nonpublic schools already share in existing Federal programs available to them, as I mentioned in my opening statement, and we are putting in here about $4 or $5 million in Federal money, what portion of that is going to be nonpublic schools?

Mr. BURKE. I wish I could answer that question. I can provide it for you as useful data and I will make a note of this, I don't know the

answer.

Senator PELL. It would be helpful because one of the ways we see of helping the nonpublic school, without violating the Constitutional barriers, is to try to expand the categorical programs that already are being taken advantage of. I realize this goes counter to the President's revenue-sharing concept which as you know calls for combining categorical programs. The only way we can help the nonpublic schools is by almost enlarging and continuing the variety of categorical programs. You have any reaction to this, any thought?

Mr. BURKE. Well I believe there is no categorical answer because what may be useful for certain purpose is disfunctional for other purposes and I can well conceive the need to save the taxpayers money and improve education and at the same time I concede that we need some program in order to get over the very difficult hump that we have in education today.

Senator PELL. Do you have any particular words of advice to this committee as to drafting the laws and as to how we can help the private schools, the nonpublic schools?

Mr. BURKE. Well, I think there is no particular words of wisdom that we would engrave in granite, but I think there are some extraordinarily intelligent and ingenious people who have put long hours on this program and compiled a great deal of data that is available in research and I will be glad to make it available to your committee. We have some people working on this now. The only thing I would urge, and I am sure it is not really necessary, but as a final remark please keep in mind that it's the lives of the children that are at stake here and not a particular system of education per se.

Senator PELL. Thank you really very much, Dr. Burke, for being with us and as I said you have a mamouth job, the only man in the United States with such responsibility.

Mr. BURKE. Thank you very much, Senator Pell.

Senator PELL. Our next speaker is Representative Robert McKenna, chairman of the Subcommittee on Education of the House of Representatives of the State of Rhode Island. Bob is a very old friend who was with me in my office in Washington as a volunteer worker for several years. I look forward to his testimony very much. I know that he has strong views on this subject and I look forward to hearing from him.

STATEMENT OF REPRESENTATIVE ROBERT MCKENNA, CHAIRMAN OF THE SUBCOMMITTEE ON EDUCATION OF THE HOUSE OF REPRESENTATIVES FOR THE STATE OF RHODE ISLAND

Mr. MCKENNA. Thank you very much, Senator. At the very outset, I should like to commend you for your initiative in holding these hearings on the question of Federal aid to students and parents of students attending nopublic schools. It is most appropriate that these hearings should be held in Rhode Island, since as Dr. Henry Brickel noted in his 1969 study of this question, "Rhode Island is the most nonpublic State in the Nation."

As is clear to anyone familiar with the facts, any trends advice to nonpublic education in the Nation will have a particularly negative effect on the educational situation here in Rhode Island. Indeed, the impact both educationally and financially has already been extensive.

In our own city of Newport, the closing of St. Catherine's Academy and the elimination this year of all but the senior class at De LaSalle Academy has been major factors in causing Rogers High School, Newport's public high school, to go on double sessions. Also, thousands of additional local tax dollars have had to be raised due to these high school closings and to the falling off of local nonpublic elementary school enrollment.

On a statewide basis the fiscal impact has been of a crisis character. Only a short time ago, almost 50,000 students were enrolled in nonpublic schools in Rhode Island. This represented approximately 30 percent of all Rhode Island schoolchildren. Today the number is only about 35,000 which is approximately 20 percent of the total. Thus, we have lost approximately 15,000 in absolute numbers. At the 1970-71 rate of $845 per student the total tax cost to support these former nonpublic students is in the range of 12 to 13 million.

To look at this in another way, this is equal to about one-fifth of the $68,800,000 in revenue anticipated in the 1972 fiscal year from the new Rhode Island income tax. Surely, if any evidence is needed as to the adverse fiscal impact of the losses to date in nonpublic enrollment, these figures supply it. If it were not for the fact that many students still remain in nonpublic schools, the additional tax cost would be in the range of $25 million. Thus, the cost of absorbing all present and former nonpublic students would be equal to more than half of all the anticipated revenue from the Rhode Island income tax. It is, I think, fair to say, that the failure for whatever reasons, to resolve the problems besetting nonpublic education in Rhode Island has been a major factor in the constant increase in the need for greater and greater tax revenues and new types of taxes.

It is generally agreed that the people of Rhode Island feel that they cannot reasonably be asked to assume ever greater tax burdens. Some help must be given by the Federal Government. I am fully cognizant of the difficulties that you face both in the Congress and without it in attempting to resolve the question. Certain of the recent decisions of the U.S. Supreme Court, if they are allowed to stand, appear to make the task an even more difficult one. However, the educational and fiscal needs of Rhode Island and the Nation are so crucial at this point that, in my judgment, action must be taken, even bold action which perhaps in calmer times would not be warranted.

It is also evident that the extent and complexity of the problem does not allow a single, simple solution. Therefore, the suggestion I shall offer is at best only a partial answer, but even a partial solution should be welcome.

As a first step, I would urge that the tax credit approach which has been suggested for higher education be expanded to all levels. Regretably, the tax credit portions of the recent Tax Reform Act were lost in the Senate-House conference. They should be advanced again. As a start, a tax credit of up to $1,000 per student should be given against an individual's Federal Income Tax liability. This should also provide a grant in those individual cases where the Federal tax liability is less than the allowable credit. This method will have the advantage of allowing a greater freedom for parents and students to select the education best suited to the needs. It should be equally applicable to elementary, secondary and higher education, both public and nonpublic. Thus, students faced with rising tuition costs at schools such as the University of Rhode Island, as well as those attending various nonpublic schools and colleges, would benefit. This would also indirectly relieve the State of some of its burdens of supporting those educational institutions which charge a fee less than the amount of the credit.

The last matter upon which I should like to comment is the question of the U.S. Supreme Court's role in all this. As every student of the Court knows, the Justices of the Court are human as are we all and they are influenced by many factors other than the text of the Constitution and the statutes involved in a given case at bar. There have been many instances of the Court's reversing its previous decision. We need only recall the Flag Salute cases, for example, Minersvill School

District v. Gobitis (1940), which was explicitly reversed by West Virginia State Board of Education v. Barnette (1943) and the released time cases of McCollum v. Board of Education (1948) which for all practical purposes was reversed in Zorach v. Clauson (1952), as was quite clear to the discenting Justices. Indeed, in the view of the Waltz case which was allowed special tax treatment for specifically religious purposes, it may well be that the Court will approve the approach I have suggested.

Yet, if in the judgment of the Congress there should be any serious doubt regarding the Court's policy output in this area, the Congress has the power to defend its own view of what is both constitutionally permissible and demanded by the felt needs of the citizens of our State and Nation.

Seldom has Congress, or either House alone, used the full extent of its coordinate power to judge the constitutionality of its own acts. However, Congress does have this right, as it exercised in relation to the Ex parte McCardle case in 1868 when it removed the Supreme Court's Appellate jurisdiction relating to the Reconstruction Acts. On this occasion Chief Justice Chase asked differentially:

What, then, is the effect of the repealing act? We cannot doubt as to this. Without jurisdiction the Court cannot proceed at all in any cause. Jurisdiction is the power to dictate the law, when it ceases to exist, the only function remaining to the Court is that of announcing the fact and dismissing the cause. (7 Wallace 506, 514: 1868).

Thus, the final authority and responsibility rests with the Congress as the representative of the sovereign people of our Nation. We should determine the will of the people in this most crucial matter and then see to its implimentation. I want to thank you very much for your interest.

Senator PELL. Thank you. Your basic support would go to the tax credit approach?

Mr. MCKENNA. From a constitutional standpoint and from a policy standpoint I think it is highly desirable in that it provides great diversity and also a very tight control from an accounting standpoint, since this all funnels through the IRS where you can request a claim on tax credit at tax time and in my judgment it is a rather simple one to operate.

Senator PELL. What about the argument that the tax credit approach would help only the larger income families, middle and smaller income families some of whom because of the size of the family pay no income tax would not benefit at all from this?

Mr. MCKENNA. Well in those cases where a tax liability is less than the allowable credit then the Government should give him a refund in effect or a grant.

Senator PELL. What would happen in that case when the credit involved would more than exceed the tax?

Mr. MCKENNA. With the student in high education there would be a grant as opposed to the tax credit which would work simply where he would fill his Federal income tax out instead of getting a tax credit against his owing taxes he would simply get in effect a credit or a refund even though he hadn't paid the money and he would still in effect get a grant.

Senator PELL. This refund or grant would be used by the parent for his child's education?

Mr. MCKENNA. Well he would have to verify this as he verifies anything else he puts down on his Internal Revenue form. I think the tax credit approach is particularly desirable in that we would have just one more line added to the 1040 form.

Senator PELL. I know that one of the solutions that has been suggested is the voucher approach, it has actually been tried out in Massachusetts as the Commissioner said. I believe it is also being conducted in a west coast area. However, the tax credit approach which you are suggesting has never been enlarged on or discussed seriously, how do you account for that?

Mr. MCKENNA. I think possibly one approach is direct fashion since the usual thing where the Federal Government has funded something by giving money to individuals or various institutions and that was the initial approach. Of course, the Supreme Court decisions which 1 do not think are necessarily going to stand forever and I have given you a few instances to support this. I think if I am not mistaken in Minnesota there is a tax credit law which has been enacted I think we are all aware of the very fine system of government where we try something in one or two States and reasonably implement it at the Federal level it does not have to be lost.

Senator PELL. You say that the tax credit should be for the full amount of the cost of education?

Mr. MCKENNA. There should be a reasonable limit and I suggested a thousand dollars. I didn't want to present to you a specific bill today but I would suggest possibly a 1-to-1 basis for tuition after the first 500 and from that point perhaps 50 cents for every dollar actually expended for tuition, 50 cents to be charged to the tax credit. I don't think the Federal Government should be subsidizing the entire cost of private funds. If there is no private fund input, I think most of the drive of the private schools would be lost, because I think we should still encourage this in certain areas. I don't think as things stand now that private funds alone will be able to maintain a substantial nonpublic education in this system.

Senator PELL. We are going to have a witness later who will be able to speak for himself on independent schools. What about the boarding schools where youngsters come out of our own State, would those parents be able to take advantage of the tax credit?

Mr. MCKENNA. It would be one where the parent would simply declare on the Federal income tax where the children attended and it would not make any difference. From the view of the State tax program or State aid programs there are certain problems out of the state student on the Federal level but I think it is extremely small matter if it is a problem at all.

Senator PELL. Do you have any rough idea what the cost would be to the Federal Government for the program?

Mr. MCKENNA. Well, I think if we assume there are about 6 million students attending nonpublic schools in this country and if you were to assume about $800 each then multiply it, it would be several billion dollars. I think the alternative cost an additional tax to the State regrettably still comes from the property tax in many communities in