SECTION: CAPITOL HILL HEARING TESTIMONY

LENGTH: 1806 words

HEADLINE: TESTIMONY June 23, 1999 CHARLES B. RANGEL RANKING MINORITY MEMBER HOUSE WAYS AND MEANS TAX REDUCTION PROPOSALS

BODY:
Statement of the Honorable Charles B. Rangel, M.C., New York, Ranking Minority Member, Committee on Ways and Means Testimony Before the House Committee on Ways and Means Hearing on Reducing the Tax Burden: II. Providing Tax Relief to Strengthen the Family and Sustain a Strong Economy June 23, 1999 Colleagues. I am pleased to testify before you today about the state of the public school system in the United States. It is becoming increasingly apparent that the most important challenge facing this country today is the need to improve our educational system. Investment in public education is the key to developing young minds and giving all of America's children a chance to excel. At the present time, however, some of our young people attend schools where facilities are crumbling, classrooms are overcrowded, students are without computer and internet access, and many teachers are uncertified and under qualified. It is a shame that the United States maintains a public education system that subjects some of its students to a poor quality of education- -in effect, dooming them to a future that is bypassed by the prosperity and promise of the new global economy. Many children today are attending school in trailers or in dilapidated school buildings. We cannot expect learning to occur in those environments. The General Accounting Office reports that approximately one-third of America's public schools is in need of extensive repair or replacement. The report estimates that it will cost $112 billion to repair, renovate, and modernize our existing schools and another $60 billion over the next decade to build new schools. It is estimated that in New York City alone more than one-half of the city's 1,100 school buildings are over half a century old. Thirty-eight percent of these schools are estimated to be in need of extensive renovation. In an effort to help schools meet their capital needs, I have introduced legislation, H.R. 1660, a bill designed to provide approximately $24 billion in interest-free funds to State and local governments for school construction and modernization projects. I believe this bill is a meaningful first step in addressing the problem of crowded, dilapidated and outdated school facilities. H.R. 1660, The School Construction and Modernization Act of 1999, extends and enhances the education zone proposal that was enacted on a limited basis in the 1997 Taxpayer Relief Act. This program is designed to create working partnerships between public and private entities to improve education and training opportunities for students in high poverty rural and urban area. Some have argued that the Federal government should have no role in assisting the public school system at the K through 12 level. I disagree strongly. The Federal government historically has provided financial resources to the public school system. It has done so in part by providing tax-exempt bond financing that enables State and local governments to fund capital needs through low-interest loans. This bill is, in many respects, very similar to tax-exempt bond financing. The bill provides special tax benefits to holders of certain State and local education bonds without requiring any additional layers of bureaucracy at the Federal or State level. The procedures used to determine whether bonds are eligible for those special benefits are substantially the same as the procedures applicable currently in determining whether a State or local bond is eligible for tax-exempt bond financing. I also want to be very clear that H.R. 1660 supports our public school system. I believe that improving our public school system should be our highest priority. Approximately 90 percent of the students attending kindergarten through grade 12 attend public schools. If we can find the resources to provide additional tax incentives, it is imperative that these incentives focus on improving a public school system that serves such a large segment of our student population. For this reason, I have and will continue to oppose legislation, such as the so-called "Coverdell" legislation, that diverts scarce resources away from our public school system. The Republicans are promoting a change in the tax-exempt bond arbitrage rules that they claim is a meaningful response to the problem of dilapidated and crowded school buildings. Under current law, a school district issuing construction bonds can invest the bond proceeds temporarily in higher-yielding investments and retain the arbitrage profits if the bond proceeds are used for school construction within two years. The Republican arbitrage proposal would extend the period during which those arbitrage profits could be earned for four years. The Republican proposal does not benefit those districts with immediate needs to renovate and construct schools. It benefits only districts that can delay completion of school construction for more than 2 years. It is inadequate at best. At worst, it may increase costs for those districts most in need because more bonds could be issued earlier. My bill includes a provision that would extend the Davis-Bacon requirements to construction funded under the new program. This provision is consistent with the policy that Federally subsidized construction projects should pay prevailing wage rates. The bill also includes provisions designed to ensure that local workers and contractors are able to participate in the construction projects. It is becoming increasingly clear to many across the country that some parts of our current education system are producing students who come out of high school with a knowledge base that is incomplete or obsolete. Some schools produce graduates ill- equipped to compete in an increasingly fast-paced, knowledge- based, technological world. It is deplorable that some of our young people are doomed to failure because they attend resource- poor schools where facilities are crumbling, classrooms are overcrowded, students are without computer and internet access, and many teachers are uncertified and under qualified. Tragically, the young people who are most likely to be subjected to an inferior education in this system are those who attend school in urban and rural areas with high rates of poverty and those who are of African American and Hispanic descent. In a country that prides itself on its leadership in world affairs, the negative effects of race and income continue to have a pervasive impact on the quality of education and the life's chances of affected students. These educational disparities are a national disgrace and must be addressed. Failing students in poor communities are almost sure to face high rates of illiteracy, incarceration, joblessness, and drug abuse. Since 1970, the prison population has increased from 260,000 to 1.8 million people in 1997 (nearly a 600% increase). Studies indicate that 70% of inmates lack basic literacy skills, 49% have not completed high school, more than 70% used illegal drugs one month prior to their arrest, and 40% in state prisons lived below the poverty level prior to incarceration. It is important to realize that these incarcerated individuals are not born criminals. Many are the products of failed support systems, including schools that have neglected to provide them with the proper tools to compete and excel in today's society. It is unacceptable that some of our children are locked up with no hope for the future in the richest, most powerful country in the world. This is a waste of talent and productivity. Supporting a punitive incarceration policy rather than front-end investments like education and training is also a waste of money. Why do we spend $84,000 per year to keep someone incarcerated but only $9,000 per year to educate him or her? Wouldn't it make more sense to provide people with the tools they need to compete before they end up in jail or on the street? The U.S. must reassess its misplaced priorities and make a greater investment in its public education system so that all of America's children can receive a quality education that enables them to compete in the global economy of the 21st Century. Now that the war in Kosovo has ended, it is time to declare a war much closer to home--one of great significance to national security and to the economic and social stability of our nation. America's new "war" at home should be a national initiative to reform failing public schools. Contrary to what some claim, the answer is not to throw out the entire public education system when only a few parts are dysfunctional. The U.S. must focus on turning disadvantaged schools inside out so that they can be transformed into model schools where students can learn in a positive and affirming environment. This effort requires a serious commitment from the federal government with substantial cooperation from local and state government, teachers unions, parents, and businesses. Serious school reform would entail providing better teacher training, more effective curricula, improved access to new technologies, refurbished or new facilities, smaller class sizes and innovative partnerships between schools, businesses and communities. As a community, we should establish strong expectations for student performance based on academic literacy, social competency, civic responsibility, occupational opportunity, and technical proficiency. Additionally, these expectations should be aligned with the needs of the U.S. economy so that we can continue to produce strong economic growth. Investment in public education is the key to developing young minds and giving all of America's children a chance to excel. The President recently embarked on a new initiative to focus federal resources in those areas of the country that have been underdeveloped in terms of business opportunities. It is important to recognize that this "new markets" initiative cannot thrive without also nurturing the underdeveloped human talent in these distressed areas. We must have new minds for new markets if we are serious about truly improving the conditions of poor communities throughout America. There is no reason why a country possessing the genius and talent to develop the internet, create innovative computers and software, and generate enough produce to feed the world, cannot successfully reform its own public education system. We have the know-how and expertise, now we need the willpower and commitment. Due to a strong economy and budget surpluses, the U.S. now has a unique opportunity and strong incentive to invest in its human capital. Public education has helped make the U.S. the world leader that it is today. It must be our nation's priority to radically reform poor performing public schools if we are to guarantee our children's future in the global economy.

LOAD-DATE: June 25, 1999