Summary: One purpose of Public Law 81-874 is to minimize the fiscal inequities caused by both the presence of tax-exempt Federal lands and the burden of providing suitable free public education to federally connected children. In administering the Impact Aid program, the Office of Education (OE) develops policies and procedures and distributes bulletins, instructions, and application forms to local educational agencies (LEAs) through State educational agencies. Payments increased from $25 million in fiscal year 1951 to $550 million in 1975, the growth being attributable to such factors as increases in school population, increases in school expenditure per pupil, expanded Federal activity, and amendments liberalizing the basic legislation. Of 100 LEAs reviewed, 93 claimed either more or less than their eligible number of pupils. These LEAs were overpaid a net total of $212,133. OE has not, except for a few special employment situations, issued regulations or instructions defining the requirements a parent must meet to be considered "employed on Federal property." Documentation should be required to determine that children claimed did reside with civilian federally connected parents. Reviews should be made of State aid allocation formulas relative to the supplant provision of the law. OE should review the data used to compute payment rates. OE instructions do not specify weights to be given criteria in determining comparable LEAs. Without impact aid entitlements, 48 percent of the 1,671 LEAs analyzed would need annual property tax increases of less than 5 percent, and 18 percent would need tax increases from 5 percent to 10 percent. LEAs receiving impact aid funds were generally the largest and most prosperous within a State.
