Our growth has not stopped, either, Mr. Chairman, because from actual tabulations from our school superintendents, we anticipate an increase in the next 5 years of another 27,000 schoolchildren, or a rate of increase of approximately 5,250 children a year.

We have done a terrific job of providing for this increase in population in school construction there. Our total school construction costs since World War II in northern Virginia have amounted to $93,800,000. We have issued bonds, sold bonds, and obligated and mortgaged our communities in the amount of $71 million to help pay for those schools.

The Federal Government has helped in that construction program as a result of Public Law 815. It has contributed $17 million toward that $93 million program, actually approximately 23 percent of the new school construction cost.

There again I make reference to the federally owned property and the fact that 51 percent of our children are federally connected children. We still have quite a large balance to pay on those bonds, Mr. Chairman. We still have $60 million balance remaining, and we anticipate additional construction costs in the next 5 years, to take care of their increase which is right in front of us, of another $48 million. We have already sold in one community, Fairfax County, another $9,500,000 in bonds to help finance the cost of additional needed school construction.

I submit, Mr. Chairman, we do have a pretty good case out there. We feel that the Federal Government has a moral obligation to us and, by virtue of Public Laws 815 and 874, it becomes a legal obligation. It is not giving us any more than we are entitled to. We do not like to come before the Congress with our hat in our hand and asking for a subsidy. We recognize our local responsibilities and obligations. We feel we are meeting our local obligations and responsibilities, and we are merely asking the Federal Government to meet a portion of its obligations and responsibilities to us. Meet us part of the way. That is all we are asking for, Mr. Chairman. We feel that the proposed bill, H.R. 7140, will discriminate against us in our communities and will, in effect, result in the Federal Government's reneging on a portion of its obligation to us.

I did not mean to take quite that long, Mr. Chairman. I promised you that we would be brief here this morning. I do have two or three spokesmen who will make brief statements which will give you a further cross section of the case for the northern Virginia communities.

The next spokesman is Mr. David Krupsaw, the chairman of the County Board of Arlington County.

Mr. BAILEY. Before Mr. Krupsaw began his testimony, may I say that the gentleman has made a strong plea for the school districts in his congressional district in the northern neck of Virginia. I never understood why the gentleman never joined me in my efforts to get school construction over the Nation. I just wanted the record to show that fact.

Mr. BROYHILL. Mr. Chairman, we had a preliminary meeting prior to this testimony this morning, with our county executives and our school superintendents, and I pointed out that you and I were very good friends, but that you would put that needle out as soon as we started this morning, so we are not surprised.

Mr. BAILEY. I never let any of them get by with that.

I appreciate your presentation of the facts.

And now, Mr. David Krupsaw, the chairman of the Arlington County Board. You may proceed with your testimony.

STATEMENT OF DAVID L. KRUPSAW, CHAIRMAN OF THE COUNTY BOARD OF ARLINGTON COUNTY, VA.

Mr. KRUPSAW. Thank you, Mr. Chairman and gentlemen of the committee.

I am David L. Krupsaw, chairman of the County Board of Arlington County, and I am appearing here today on behalf of my county board and the people of my county.

I have a very eloquent and forceful five-page typewritten statement, Mr. Chairman, which I am going to file rather than read in full, not only in the interest of brevity, but also because Congressman Broyhill has stolen about 98 percent of my speech. He has given such an excellent statement of our case that I want to save the committee the burden of listening to a repetition of what he has said.

However, Mr. Chairman, I should like to highlight a few of the items which appear in this statement. I shall furnish you with enough copies for members of your committee, and I hope it can be circulated so that all Members of Congress will be able to read this.

I am appearing in opposition to H.R. 7140. A reduction in the extent of Federal assistance would impose a hardship upon the people of Arlington County. It would be a failure to recognize fully the responsibilities of the Federal Government.

The National Government has extensive real estate holdings, all of which are exempt from local property taxes.

Associated with the Federal ownership of real property is the exempt status of some nongovernmental activities conducted on Federal installations. For instance, Mr. Chairman, we are losing substantial amounts of revenue because private enterprise at the Washington National Airport is not subject to the Arlington business privilege license tax nor to our personal property tax.

The Congressman has mentioned the preferential tax status of military personnel. Almost one-quarter of the families of our county are exempt from personal property taxation as well as the county automobile license tax.

If we had a good, clean, manufacturing industry or if, instead of the Pentagon, we had a large private office building, it is immediately apparent what a great difference that would mean in the revenue derived from those properties.

The Congressman stated that one-sixth of the property is federally owned. In Arlington County a little more than 18 percent of our property is federally owned.

When the Federal Government owns a large portion of land, as in Arlington, removal of this property from the tax base becomes a matter of considerable importance. Similarly, if a significant portion of the residents and business enterprises receive exemption from taxation not available to others, the impact is keenly felt. Under such conditions exemption becomes grossly unfair and imposes a burden on the local community and its nonexempt residents and businesses.

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The Congressman pointed out that in his congressional district, the 10th of Virginia, 51 percent of the children are federally connected. In Arlington, Mr. Chairman, 56 percent of the children are federally connected.

It may be well to point out that Arlington even now is one of the few communities in the country receiving assistance from the Federal Government under Public Law 874 in which the amount received does not equal the local contribution per child for the cost of education in the public schools.

In view of these considerations, Mr. Chairman, I fervently hope that your committee will recommend against the proposed legislation and in favor of a continuation, if not an increase, in the assistance presently provided under Public Law 874.

Thank you, sir. I have here a number of copies of this statement. (Mr. Krupsaw's prepared statement follows:)

STATEMENT OF DAVID L. KRUPSAW, CHAIRMAN OF THE COUNTY BOARD OF ARLINGTON COUNTY, ON BEHALF OF THE COUNTY BOARD OF ARLINGTON COUNTY, VA.

Mr. Chairman, I am David L. Krupsaw, chairman of the Arlington County Board. I am appearing today on behalf of the County Board of Arlington County, Va., in opposition to H.R. 7140 to amend Public Law 874 relating to Federal assistance to schools in federally affected areas.

A reduction in the extent of Federal assistance to education under the terms of Public Law 874 would impose a hardship upon the residents and other taxpayers of Arlington County. Moreover, it would imply a failure to recognize fully the responsibility of the Federal Government which arises from our special situation in relation to the National Capital and from the existence of large Federal installations within our borders.

The impact of the National Capital on surrounding communities takes several forms. The National Government has extensive real estate holdings in nearby jurisdictions, all of which are exempted from local property taxes.

Associated with the Federal ownership of real property is the exempt status of some nongovernmental activities conducted on Federal installations. For instance, we are losing substantial amounts of revenue because private enterprise at the National Airport is not subject to the Arlington business privilege license tax nor to the personal property tax.

Another important consequence of proximity to the National Capital and the number and size of the military installations in this area stems from the preferential tax status of military personnel. Personnel serving in the Defense Establishment under military orders are exempt from payment of local personal property taxes. In Arlington almost one-quarter of the families in the county are exempt from personal property taxation under the provisions of the Soldiers and Sailors Civil Relief Act. Moreover, local motor vehicle license tags are issued free to such individuals. If military personnel were required to obtain local licenses and pay for them as are other residents, the county revenue would be substantially larger.

Still another result of bordering on the National Capital is the increased cost of local government services. Through its own official activities and through the private activities of its employees, the Federal Government imposes a very substantial strain on the service facilities of nearby local governments.

It has been argued that without the Federal Government there would be little economic development in the Greater Washington area; that high-priced residential and business property would still be in pasture and marshland. This line of reasoning, however, would appear to have no more validity with respect to Government enterprise than to private enterprise. No one would contend that, say General Motors, should be accorded tax exemption if it were to open a new plant in this area just because of the attendant economic benefits which would flow to the community from the existence of that plant.

Federal installations do bring benefits. In the typical case, however, the direct and indirect contributions of the Federal project to local revenues do not compensate for the direct loss of revenue resulting from the tax exemption

of Federal properties and for the increases brought about in the costs of local government services.

The extensive property holdings of the Federal Government, particularly in those parts of northern Virginia where undeveloped land is extremely limited, have important consequences for local ability to provide governmental revenues. Since Federal Property is tax exempt, and the property tax is the principal source of local revenue, Federal ownership of property involves significant reductions in the local tax base and the local revenue potential.

Of Arlington's total area of 16,350 acres, 18 percent or 2,943 acres are in Federal ownership.

Various approaches have been tried in an effort to estimate the amount of revenue loss which is entailed through Federal ownership of property. One method is to estimate the value of these properties for tax purposes at the cost to the Federal Government, the price paid for them. This is an inadequate basis because many were acquired years ago as undeveloped and unimproved acreage which by now doubtless would have been developed for taxable private use. Even as acreage, current values would be far in excess of the Government's original acquisition price.

Another concept of the revenue loss resulting from Federal ownership is the current assessed value of the properties with existing improvements on their present usage. This concept is unsatisfactory too, because of the atypical character of the Federal land use. Private enterprise is not likely to have built a Pentagon.

A third kind of calculation is an estimate of the amount of tax revenue which would be produced if the Federal property were privately owned and devoted to purposes judged to be probable in the light of local zoning patterns and community development programs. The difficulty of such a calculation is that current values of privately owned land are themselves a function of their proximity to National Capital activities. Nonetheless, such a calculation has been attempted for Arlington and at least indicates the order of magnitude of the problem. It is conservatively estimated that the real property tax base would be increased by about 75 percent were property now in Federal hands to be developed by private ownership.

It must be concluded that attempts to assign quantitative values to the revenue loss attributable to Federal property ownership is necessarily an exercise of limited usefulness. Because it cannot be measured exactly, however, is not to say there is no loss. On the contrary, it is obvious that there is a very substantial reduction in the local revenue potential.

It is not our purpose here to argue the validity of the principle of exemption of Federal property from local taxation. This system was originated at a time and under conditions when the resulting burden on the community was relatively moderate because the Federal Government owned only a small fraction of the land in a given community. Exemption of this property from taxation even though unfair, was of minor moment.

When, however, the Federal Government owns a large part of the land-as in Arlington-removal of this property from the tax base becomes a matter of considerable importance. Similarly, if a significant portion of the residents and business enterprises receive exemptions from taxation not available to others, the impact is keenly felt. Under such conditions exemption becomes grossly unfair and imposes an impossible burden on the local community and its nonexempt residents and businesses.

For a number of years the Federal Government has recognized its responsibility in this respect. Its financial assistance has made this situation tolerable but has not eliminated it. If this assistance (whether in its present or some alternative forms such as payment in lieu of taxes) is withheld, the situation will become intolerable.

I should like to indicate briefly something of what the proposed amendments, if enacted, would mean for Arlington County.

We have appropriated $12,844,845 for school purposes in the coming school year. Something like 56 percent of the children in Arlington's public schools are "federally connected" within the meaning of Public Law 874. The amount of assistance to which Arlington would be entitled under the present terms of Public Law 874 has been estimated at $1,580,000 or about 12 percent of our expenditure for schools. If the proposed amendments are enacted, the county would receive only $1,160,000 during 1959-60, and only $1,011,000 in the following fiscal year.

The reduction in this assistance would have to be made up by the taxpayers of the county. This year our tax on real property is $3.54 per $100 of assessed value; $2.07 per $100 of this is levied for school purposes. To make up the deficiency were the assistance under Public Law 874 to be cut back, we would have had to have added more than 13 cents per $100 of assessed value to our real estate tax rate.

It may be well to point out that Arlington County even now is one of the few communities in the country receiving assistance from the Federal Government under Public Law 874 in which the amount received does not equal the local contribution per child for the cost of education in the public schools.

In view of these considerations, I am sure that your committee will recommend against the proposed legislation and in favor of a continuation if not an increase in the assistance presently provided under Public Law 874.

Mr. BAILEY. I will say to the gentleman that that matter of possible increase would be pretty much in the hands of your Congressman over there and in the hands of a Republican administration. He ought to be a little more generous.

Mr. BROYHILL. We shall go to work on it.

As I stated before, Mr. Chairman, we have representatives of all our communities, school systems, and county governments, and all of them will be submitting statements for the record. I make the request that they may submit those statements for the record.

Mr. BAILEY. Yes; and if they have a few brief remarks to make, we shall be glad to hear them, provided they do not take too much of the time.

Mr. BROYHILL. I have two more brief spokesmen, Mr. Chairman. They are all here, of course, to answer any questions the chairman or the committee may have.

Mr. BAILEY. You may introduce your next witness.

Mr. BROYHILL. The next witness is Mr. Robert Walker, the assistant superintendent of the Fairfax County Schools.

STATEMENT OF ROBERT B. WALKER, ASSISTANT SUPERINTENDENT OF SCHOOLS FOR FINANCE FOR FAIRFAX COUNTY, VA.

Mr. WALKER. Mr. Chairman, I am Robert B. Walker, assistant superintendent of schools for finance for Fairfax County. I am representing the four school divisions of northern Virginia; namely, Alexandria, Arlington, Falls Church, and Fairfax. Appended to this statement are some consolidated statistical tables of the four communities which may be helpful to you and the committee in concluding that Public Laws 815 and 874 should be continued without the amendment proposed in H.R. 1740.

Since I am more knowledgable of the impact of these laws on my own county, I shall confine my remarks to the school construction and school operational problems of Fairfax County as affected by Public Laws 815 and 874. I would emphasize that any one of the school divisions represented here today could present a comparable statement. As one approaches Washington from the west he finds a quiet, rural community, for Fairfax County is 407 square miles of pleasantly rolling hills, much of it covered by lovely farms and woodland. As one nears Washington, however, one finds oneself in suburbia complete with housing developments, shopping centers, churches, schools, and, I emphasize, children.

In 1940 a relatively short time ago, as things are measured, Fairfax County had a population of 40,000 people. By 1950 a worldwide