State governments must face?

First is the issue of strengthening the financial potential of the States in order that they might formulate their educational programs to meet the major problems of the late 1960's problems such as segregation, chronic poverty, urban decay, and technological unemployment. As Robert Heilbroner of the New School in New York stated recently in an article in the New York Times Magazine: "While the states look forward with uneasy certainty to an unprecedented need for public expenditure, they cannot look with anything like equal assurance to revenues large enough to match their needs."

Property, sales, and state income taxes are already inadequate in most States to meet present needs. But perhaps the greatest barrier is the so-called "fiscal drag" on the States that arises from the Federal income taxes. A possible solution to this problem, which would vitally affect education, comes in the form of a tax-sharing plan. Walter Heller, former Chairman of the Council of Economic Advisers, initiated the idea which led to the four main recommendations commonly called the Heller Plan. Heilbroner characterizes this plan as follows:

"(1) Each year a certain percentage of Federal income tax revenues would be set aside for state distribution. If the initial set-aside were 1 per cent of income-tax revenues, the tax share for the states would come to about $2.5 billion in this current year. Over the years ahead, as tax revenues grow, this sum will increase; by 1970 it is estimated to be roughly $3.5 billion." (Congress could, of course, increase the percentage of set-aside as well.)

"(2) The funds earmarked for the states would thereupon be credited to a trust account, before being handed over to the states themselves. This has the advantage of keeping the entire transaction out of the Federal budget, a perfectly legitimate maneuver, since the money is not being 'spent' by the Federal Government but only transferred by it to the state governments who will indeed spend it. At the same time, needless to say, the trust device is a nice way of keeping up Government expenditures-even though they are recorded officially at the state and local level-without swelling the politically sensitive Federal budget." (Lest this be thought an insidious innovation of the Administration, it should be noted that the trust fund is an old established financial mechanism, widely used for state-aid programs such as highway construction.)

"(3) The plan thereupon envisages the trust fund being turned over to the states with little or no limitation on its use. If any 'strings' at all are to be attached, they are thought of as being of the most general nature, such as a broad prohibition on use of the funds for highway projects, or their consignment to unspecified 'education or welfare' purposes.

"(4) Finally, the tax-sharing plan would help the poorer states somewhat more than the richer ones. Most of the trust fund would be distributed on a per-capita basis, but not all of it. A portion of the fund—perhaps even as much as 25 per cent -would be reserved for use by the poorer states only. Thus a state like New York, with a relatively high income level would indirectly contribute more to the trust fund than it would get back by way of tax-sharing, whereas a poor state like West Virginia would be a relative gainer through the plan. For New York, the tax-sharing plan would mean additional receipts of about $200 million, or about 7 per cent of its budget expenditures; for West Virginia, receipts of perhaps $3.5 million, or about 9 per cent of its 1964 budget."-Robert L. Heilbroner, "The Share The Tax Revenue Plan," New York Times Magazine, Dec. 27, 1964, p. 8.

The arguments for and against this plan are many and varied. In essence, the EDUCATION-DRYCHOLOGY LIBRARY

47

be expanded in this manner through the use of Federal surpluses, or if there are expanding Federal revenues, then the more conservative argument would hold that taxes ought to be cut. A question that cannot be ignored is whether Congress under such a program would be willing to cut the purse strings. Recent efforts in the field of congressional reorganization seem to indicate that the Congress has become sensitive to its innovative role and perhaps less willing than ever before to delegate authority.

Another major issue confronting State governments is how they should plan to provide educational opportunity and what types of administrative agencies are needed to execute these plans. Dramatic increases in the population, increasing costs of instruction (facilities, equipment, and staff), a substantial deepening of our commitment to the concept that educational opportunity should be available for all citizens-all of these factors have demonstrably affected state policies. As James B. Conant pointed out in Shaping Educational Policy, the absence of State planning almost invariably means that educational decisions are made on a porkbarrel basis. A number of States-approximately 25 in number-have created coordinating agencies to prevent excessive competition and duplication of functions and service. But perhaps the most widely known example of State planning is found in the now famous three-tier California system. The California system provides for junior colleges-both technical and academic-available to everyone; State colleges with limited graduate programs are available to those in the upper one-third of their high school class; and two major universities, with resident campuses located throughout the State, are available to anyone who is in the upper 121⁄2 percent of his graduating class. The two universities are designed to provide most of the graduate and professional programs.

The performance of the California system has been judged by many authorities and most recently by the students themselves. A number of students have judged it and found it seriously wanting, particularly in the area of undergraduate instruction. Others have judged it-Dr. Conant, for example-and have recommended that other States, insofar as practicable, follow suit.

Certainly this panel will be performing a duty of leadership when it asks, "How do you judge the performance of a State-any State-in carrying out its educational responsibilities? Do you ask the students? Should one ask those who employ the graduates? Or perhaps the faculty should engage in critical self-appraisal?” Maybe none of these people should be asked. Instead, one should ask the lay governing authorities; namely, the governor, members of the legislature, and the director of the budget. Unquestionably all of these will have certain criteria by which to judge. But the issue is: Whose criteria are we to follow? And, if we must mix a concoction to drink, who will do the mixing?

If the enrollment figures and projections cited above tell us anything, they tell us that the pressures on the State governments have intensified greatly. They sug gest that these governments cannot resist these pressures for very long. It seems sensible at this point to isolate, from the hundreds of things an educational system can or should do, those few specific issues which may be regarded as significant when a State attempts to plan for higher education. The list about to be set forth is arbitrary, but any oversights of major issues are inadvertent. This is the list.

First, in the field of higher education, who should govern? Should there be a State board which has control over all institutions, and, if so, how should it be selected? To what extent should the legislature become involved? What are the permissible limits of State legislative oversight? Should the legislature, as Dr.

denying ordinance and stay out of educational policy formation altogether?

Secondly, as table IV indicates, all but eight states and the District of Columbia have public-supported junior colleges. All States and territories have one or more private junior colleges. As of October 1964, the Nation's 719 public and private junior colleges had a total enrollment of 914,494 and a total instructional staff of 44,405.