Montgomery and Prince George's counties, faced with cuts totaling $8.9 million in federal aid payments, have begun a long and difficult struggle to restore the money.
Enacted after World War II, the impact aid program was intended to compensate school districts where parents live or work on federal property. The payments were intended to reimburse local governments for lost property taxes, the primary vehicle for school financing.
Under President Carter's current budget proposals, the Montgomery and Prince George's share of the school impact aid package would be slashed to zero. Nationally, the $676 million allocated for the program would be reducted to $246 million.
"I believe that such an action would amount to an abdication of federal responsibility to school districts for lost revenues due to federally owned tax exempt property," Rep. Michael Barnes (D-Md.) told the Labor-Health, Education and Welfare Subcommittee of the House Appropriations Committee last week.
Rep. Gladys N. Spellman (D-Md.) echoed Barnes' arguments when she told the subcommittee, "The federal government should carry at least a part of the normal burden of an employer and landowner to help pay for the local services used by its employes."
Barnes and Spellman were among 35 members of Congress to come before the subcommittee as the panel opened hearings on the president's impact aid package.
Carter's proposed cuts follow a trend that started with the Eisenhower administration. Every president since Eisenhower has tried to cut the program, arguing that in many cases the aid payments were little more than an extra bonus to local subdivisions already living off federal payroll dollars.
Similarly, every Congress has fought the proposed cuts, and in most years they have been substantially restored. This year, however, because of pressures to hold down spending, prospects of restoring the cuts are considered bleak.
In their proposed school budgets for fiscal 1981, neither Montgomery nor Prince George's is counting on any money from the impact aid program.
"We're seeing a very real possibility that the money won't be restored," said James Maza, who directs an office in the District that monitors impact aid legislation. "This represents a very real cut from the administration."
Testifying before the subcommittee last week, both Barnes and Spellman argued that if federal property in the counties were taxed, the tax bills would amount to more than the current impact aid payments.
"Federally owned properties in Montgomery County have a total assessed valuation of approximately $343 million," Barnes said. "That represents about $12 million in lost property tax revenue."
Said Spellman, "Fully 7 percent of the real property tax base in Prince George's County is nontaxable U.S. government property, including Andrews Air Force Base, the Beltsville Agricultural Research Center and Goddard Space Flight Center. This represents a loss of $15.8 million in 1981 revenues."
Both representatives said they support the principle of holding federal spending to a mimimum, but they said cuts in impact aid were not the way to do it.
"As a former local government official, I am very concerned that this effort not degenerate into a mad scramble to transfer costs from one level of government to another," said Spellman.
Argued Barnes, "If these cuts are accepted by Congress, it would bring to a virtual end the role of the federal government as a meaningful partner in sharing the costs of providing education to federally connected students. It would place serious fiscal burdens on both local school systems and local taxpayers."
Last week's subcommittee hearings were the first step in the legislative process on the impact aid package that is likely to extend through the summer and fall.