Mr. DUNCAN. I would like to welcome you to this committee and commend you for the great work you have done on this subject; I know you have by your statement and by legislation you have introduced in the Congress, and we thank you for your great contribution to these hearings.

Mr. KEATING. I thank my colleague, Mr. Duncan.

Thank you, gentlemen.

Mr. BURKE. Thank you, Congressman Keating.

Our next witness is Congressman Peter A. Peyser from New York.

STATEMENT OF HON. PETER A. PEYSER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW YORK

Mr. PEYSER. Thank you. I appreciate the opportunity of being here this morning.

My remarks will be very brief.

In the first place, I am pleased that this bill and the concepts of it are being discussed. I am on the Education and Labor Committee and, as this does deal with the area of education, and I realize it is probably an unusual request, I would hope that the final markup of this proposed legislation in the Ways and Means Committee, would include at least some members of the Education Committee, because basically I support very much what is in this bill.

I particularly support the areas of the Federal Government getting into, in effect, what is general aid to education because of the situation dealing with our local property taxpayers, which I am sure has been well covered here, and the problems they have been living under with ever-increasing costs of public education.

I am also particularly interested in the aid to nonpublic schools. In my own area I have seen the situation particularly in the area of parochial schools closing down.

I have met with Sister Eileen Ford, superintendent of schools in the Archdiocese of New York, and have gone over in some detail with her the realistic problem of these schools not being able to survive because of the inability of the parents to pay the ever-increasing costs of education in those schools.

So the concept of tax credit for these people is something I very much support.

There is something I do wonder about and hope will not happen, going back to what is title I in this bill. I hope that the program of general aid will not necessarily adversely affect such things as title I of the Elementary and Secondary School Act of 1965 as amended. It would be regretful if compensatory legislation and other key categorical programs would be lost in the educational system because these are programs that are of great benefit to all education throughout this country. It would certainly be my hope that these programs would not be eliminated through title I of this bill. I would hope that the Ways and Means Committee will consider, when you come to the markup, as I say, and even if it is in an informal way having members of the Education and Labor Committee, who have been involved in these programs for a number of years, intimately involved with your committee in the final working out of this bill.

Basically I think the legislation is on the right track, and I support what is happening here. I think there is a desperate need for this program.

That is my brief statement, and I thank you very much for hearing me on it.

Mr. BURKE. Thank you, and I must say we have three members on this committee who have great expertise in this area, but I am sure our chairman will have the same rapport he has had in the past when working on legislation that might affect your committee.

Mr. DUNCAN. I welcome you to the committee. Many of the statements have been repetitious, but you have given us some new thoughts. I know you have done a great deal of work in this field, and we thank you for taking your time to come and visit with us today. Mr. PEYSER. Thank you very much.

Mr. BURKE. Thank you for your appearance, Congressman Peyser. The Honorable Donald D. Clancy of Ohio is our next witness. Step forward, Mr. Clancy, and you may proceed.

STATEMENT OF HON. DONALD D. CLANCY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OHIO

Mr. CLANCY. Mr. Chairman, I am especially grateful to you for scheduling this hearing. Last March and April, I urged that such a hearing be conducted because many nonpublic schools face the prospect of closure. American schools have just passed through a crisis but an element of that crisis lingers on and the legislation you consider here today contains, I believe, the solution.

During the last 10 to 20 years, our schools had to expand to accommodate the population explosion which followed World War II. America had neither enough teachers nor classrooms for all of its children. We responded to the crisis and today we have the most literate and educated society in history. Colleges were encouraged to turn out more teachers. Bond issues were passed and bigger schools were built. Teachers and administrators' salaries were increased to induce more people to enter the education professions and, although teachers still are not among the high-paying occupations today, their salaries and fringe benefits generally assure them of a secure and comfortable future.

But solving the crisis took its toll. Taxpayers are beginning to reject bond issues for some of the accoutrements of education, like auditoriums, football stadiums, and even new classrooms. In 1971, voters approved only 47 percent of the school bond issues compared to 75 percent in 1965. New college graduates with education degrees in hand are discovering that there are few teaching slots available and they cannot always teach the courses they would like at the salaries they expected.

As taxpayers are deciding they can no longer afford to pay more for education, school enrollments are leveling off. The birthrate is falling and, by 1980, it is estimated that the enrollment will have increased only 3 to 8 percent. Meanwhile, the gross national product is expected to climb 55 percent and consequently more money will be available to pay off the bond issues and education costs which accrued during the last decade.

The financial squeeze which has begun to affect public schools was first felt several years ago by America's nonpublic schools. And, it is in this realm that the crisis exists today. From 1966 to 1971, the nonpublic-school enrollment declined by 1.6 million students, or 23 percent, while the public school enrollment rose by 5 million and 12 percent.

The American Enterprise Institute has observed: "From all signs, it appears that we may be facing a demise of most nonpublic school education in the United States within not too many years.

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America needs its nonpublic schools. Educators and government officials down through the years have warned against a monopolistic education system. There are only 6.1 million students in nonpublic elementary, secondary, and private college systems today. Their parents and guardians are having a difficult time keeping them there because they cannot afford to pay both high taxes for public schools and the higher tuitions which nonpublic schools must charge.

As a result, private schools are closing at a rate of almost one-a-day. In the last 2 years, nearly 1,000 nonpublic elementary and secondary schools closed their doors forever. These nonpublic students usually transferred to public schools, often adding to overcrowded conditions there.

I am particularly conscious of the nonpublic school crisis because more than 27 percent of the student enrollment in my hometown, Cincinnati, are in parochial and private schools. I am painfully aware of the sacrifices which parents are having to make in order to send their children to schools of their choice, and the penny-tight budgets under which those schools are laboring.

If the trend continues, President Nixon has said that the added burden on public funds by 1980 would exceed $4 billion annually to operate public schools and $5 billion for additional facilities.

You are considering here and I have introduced a bill which would help keep nonpublic schools open. These proposals would give a tax credit to parents or guardians of nonpublic school students. Your committee staff has said the bill you are considering, H.R. 16141, would cost $584 million in lost taxes per year. Even that, you must admit, is a much less expensive solution than allowing nonpublic schools to close and spending $9 billion more annually for public schools to accommodate those evicted nonpublic students.

H.R. 16141 offers a tax credit of $200 per elementary and secondary student. My bill, which I urge you to consider, would give a tax credit of $125 per elementary and secondary student and $600 per college student.

Of course, the beauty of tax credits is that they apparently do not violate the Constitution. They do not constitute a direct payment to the church school. They are not a subsidy. Neither of these tax credits is sufficient to pay all of the costs of a non-public-school student. But I believe that the credit which I propose, small as it is, is sufficient to encourage and enable most parents to keep their children in the private and parochial schools.

It appears that the public schools have made the adjustment to a burgeoning student body. They are mainly dependent, as they should be, on local and State revenues which pay 90 percent of the school costs. If public school administrators do not have to accommodate 6.1

million more students, who are now in nonpublic schools, they probably can manage on their current budgets. Therefore, I ask you to approve a tax credit of some form, either as I suggest in my bill or as proposed in H.R. 16141. Saving the nonpublic schools will save the public schools.

Mr. BURKE. Are there any questions? Thank you, Mr. Clancy. The committee appreciates your testimony.

Our next witness is a Member of Congress, the Hon. Jack Edwards of Alabama. We welcome you to the committee, Mr. Edwards, and we are most interested to hear your testimony.

STATEMENT OF HON. JACK EDWARDS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ALABAMA

Mr. EDWARDS. Mr. Chairman, members of the committee. I am here today to speak in support of the goals of title II of H.R. 16141. This part of the bill would give parents of students in nonpublic elementary and secondary schools a credit of up to $200 against their income taxes for tuition paid for their child's education. Aid to nonpublic schools is a subject of great importance in our Nation today, and I commend this committee for its efforts in this vital area.

Approximately 5.2 million students in America, or one tenth of our children, receive their education in private and parochial schools. Many of these schools are in serious financial straits. Should most of our nonpublic schools collapse, the result would be an influx of about 5 million students into a public school system already straining at the seams in many areas. A bill of $4 to $5 billion would be presented to the American taxpayer each year to pay for the education of these students in the public school system. Comparing this increased burden on the taxpayer to the estimated annual cost of this tax credit plan of $790 to $970 million, it can be readily seen that the current proposal is less expensive than the cost of absorbing nonpublic education into the public system.

Nonpublic schools perform a public service by educating a significant portion of American students. Nonpublic schools provide a stimulating diversity to our over-all educational system. These schools enable the parent and the student to exercise a wider choice in educaional pursuits. They serve as healthy competition for traditional public education.

Tax benefits are traditionally aimed at one or both of the following: to make our system of taxation fairer by recognizing special burdens or to provide an incentive for actions considered to be in the public interest. Both of these criteria are met by a tax credit for nonpublic school tuition. A tax credit may not solve all the problems of nonpublic school parents, but it should help significantly.

For these reasons, among others, I strongly support the purposes enunciated by title II of H.R. 16141. Schools are our best hope for a better society. All steps should be taken to preserve an important part of our educational structure, the nonpublic school.

Mr. BURKE. We thank you, Mr. Edwards, for your statement and for coming to the committee. Are there any questions of Mr. Edwards? If not, we thank you, sir.

Our next witness today is Hon. Henry P. Smith III, our colleague from the State of New York. If you will identify yourself for the record, we will be glad to recognize you, sir.

STATEMENT OF HON. HENRY P. SMITH III, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW YORK

Mr. SMITH. Mr. Chairman, I wish to indicate my support for legislation presently pending before your committee which would provide financial assistance for families of children in private, nonprofit elementary or secondary schools in the form of tax credits.

We need our nonpublic schools and they need our assistance. The financial stability and historic right of private schools in this Nation has become jeopardized in recent years because of the rising costs associated with providing quality education. Today, over 5.2 million students are enrolled in nonpublic schools, about one out of every 10. In my own State of New York, nonpublic schools educate nearly 750,000 pupils in over 2,000 schools. If our public school system, which at the present time is also being pressed financially, were to absorb an additional 750,000 students, the cost to the taxpayers would be at least $2 billion.

I need not point out further that if the private and parochial schools were to close their doors the economic burdens placed on the public school systems and local property taxpayers would be unbearable.

I have introduced in the House of Representatives legislation which would enable us to preserve the right of free choice in the type of education our children receive. My bill, H.R. 15355, would allow parentsof children attending any private nonprofit elementary or secondary school a tax credit for tuition costs. The amount of the credit per dependent would be the lesser of 50 percent of the tuition paid or $400. This form of assistance will be most effective in helping those people in middle income levels, $7,000 to $15,000. Tax credits, as opposed to tax deductions, will provide maximum benefits to those who are in greatest need.

President Nixon's Commission on School Finance in March of this year issued its final report recommending serious consideration of tax credits, tax deductions, tuition reimbursements, and other alternatives for providing assistance to our nonpublic schools. In April, the President's Panel on Nonpublic Education recommended programs of cial reductions in Federal income tax for families that pay nonpublic school tuitions. The President himself in recognizing the plight of our nonpublic schools called the tax credit idea "a very active option."

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The time for action is now. Further delays may allow irreparable damage to our educational system as each day sees the closing of one more of our nonpublic schools. I am confident that your committee will recognize the undeniable question of the future of our nonpublic schools and will recommend immediate assistance.

Thank you.

Mr. BURKE. There are no questions. Thank you for your very interesting presentation.

We have with us today Hon. Mario Biaggi, our colleague from the State of New York. We are glad you come to give us your views today. Please identify yourself for the record and you may proceed.