Impact Aid, Public Laws 815 and 874

Public Laws 81-815 and 81-874 were approved by the U.S. Congress in 1950 to assist local school districts with the construction and cost of public educational activities impacted by federal defense efforts. The so-called impact laws were an extension of a 1941 federal emergency measure, the Lanham Act. The precedence of the Lanham Act, the rising educational burden placed on local school districts near military bases, and the advent of the Korean War (1950–1953) contributed to the subsequent passage of the impact laws. A House Committee on Education and Labor studied the strain on local districts and concluded that unless federal assistance were provided, "more than 1.8 million children in these federally impacted areas would not receive normal school services" (National Association of Federally Impacted Schools, p. 9).

To ameliorate the loss of local taxes from personnel residing on federal lands, the authorizing committees of both the House and the Senate passed legislation (H.R. 7940 and S. 2317) to provide federal aid for the construction and maintenance of new schools in defense areas. On July 13, 1950, Public Law 81-874 was initially authorized for four years. Public Law 81-815 was passed on August 22, 1950 for an initial two-year authorization. The passage of the impact laws in 1950 and subsequent reauthorization during the 1950s represented a significant exception to the contentious federal school politics of the 1940s and early 1950s. Numerous federal aid-to education bills had failed because of racial and religious dissent. Until the passage of the Elementary and Secondary Education Act in 1965, impact laws were the only form of federal general aid for K–12 education. Furthermore, school districts receiving impact aid funds were generally free from federal governmental interference. For example, until the 1964 Civil Rights Bill enabled the U.S. Office of Education to withhold federal money from districts maintaining racial segregation, impact aid schools were not pressured to desegregate.

Children attending schools in impacted areas or federally connected children were (1) children who lived on federal property and whose parents worked on federal property; (2) children who either lived on federal property or whose parents worked on federal property; and (3) children whose parents came into the district as a result of federal contracts with private firms. A minimum of 3 percent or 400 federally connected children had to be in average daily attendance in a given district to qualify for impact aid.

The Elementary and Secondary Education Act (ESEA) of 1965 and subsequent amendments altered the original criteria for impact laws to assist not only areas affected by military personnel but also those with high poverty rates and other hardships such as rapid growth. Under Title I, Public Law 81-874 created a new three-year program of basic federal grants to the states. Funds would be allotted to districts where at least 100 school-age children, or 3 percent of the total number of school-age children were from families with low annual incomes. Under Title VI of the 1966 ESEA amendments the stipulation that three percent of children in a district must be federally connected to receive impact aid was altered to substitute a minimum of 400 children even if three percent were not federally connected. Public Law 81-815 also was broadened under the 1966 ESEA amendments to allow districts with rapid enrollment to qualify for aid.

Native American children living on federally owned lands also were eligible for funds under Public Law 81-874 and Public Law 81-815. However, it was not until passage of Title IV of the 1972 Amendments, the Indian Education Act, that Native Americans were explicitly included. In that year Public Law 81-874 was amended to financially assist local educational agencies for the education of Indian children.

Impact Aid funds flow primarily through basic support payments on behalf of federally connected children. Additional payments are made for federally connected children with disabilities, for heavily impacted districts, for federal property removed from local tax rolls after 1938, and for construction and renovation of school facilities. The bulk of the appropriation goes directly to student compensation. For fiscal year 1999, the Department of Education found that close to 97 percent of the $864 million allocation was for federally connected children, whereas little more than 3 percent was targeted for school districts that lost significant local assessed value due to the acquisition of property by the federal government since 1938.

Program Analysis

Researchers from RAND's National Defense Research Institute analyzed the Impact Aid Program, with an emphasis on its effect on the children of military personnel. Their findings are documented in a 2001 publication by Richard Buddin, Brian P. Gill, and Ron Zimmer. The authors drew the following conclusions.

• The complex Impact Aid formula results in large payment disparities for the same type of students.
• Differences in how school districts are defined makes the link between them and reimbursements inherently flawed.
• Educational opportunities of military and civilian children appear roughly comparable.
• Concern over the extra cost of military children may be misplaced.
• Military children have a much higher migration rate than do civilian children.

Future Directions

The U.S. Department of Education continually proposes changes for funding via appropriations language and annual budget requests to best serve the needs of all federally connected children, and to improve the targeting of districts experiencing the greatest impact from federal activities. To improve the timely processing of Impact Aid payments, the department is increasing its use of technology and endeavoring to establish improved review procedures. According to the department's biennial report for the fiscal year 1995–1996, however, the program objectives have remained substantially the same: to support local school districts impacted by children who reside on military bases, Indian lands, federal properties, or in federally subsidized housing; or to a lesser extent, for children who have parents in the uniformed services or who are employed on eligible federal properties, but do not also reside there.