What is Impact Aid?

 

Impact Aid is a federal program that provides funding for a portion of the educational costs of federally-connected students. It is an in-lieu-of-tax program - in other words, it is the federal government paying its "tax bill" to local school districts as a result of the presence of a military installation.

 

Impact Aid is the only federal education program where the funds are sent directly to the school district. The funds go directly into the school district's general fund for operations such as purchase of textbooks, computers, utilities, and payment of staff salaries.

 

 

 

What is the History of Impact Aid?

 

Impact Aid was passed into law by Congress in 1950. It was designed to provide for the education of military children. But as other groups (Indians, civil service, low-rent housing) have been added, funds for military children have eroded. Currently, only 40 cents of every dollar appropriated for Impact Aid goes to funding for military children.

 

Up until 1970, the program was fully funded. Since then the program has faced severe cuts and is currently only funded at 60%, as defined by law.

 

Who Is Eligible for Impact Aid?

 

In order to be eligible for Section 8003 of the Impact Aid Program, a school district must:

* have at least 400 federal students in their Average Daily Attendance; OR

* at least 3% of all children in the school district's ADA must be federally-connected

 

School districts must conduct a "first count" student survey each year to identify the number of federally-connected students. School districts must then submit an application directly to the U.S. Department of Education by January 31 containing the results of the "first count."

 

 

Philosophy of Impact Aid

 

A large federal installation, while adding a great deal to the economic growth of a state, has a tremendous impact upon a local community. It means that a great deal of property and activity is removed from the local tax rolls which support public education. Therefore, the federal government acts as the local taxpayer through funding the Impact Aid program.

Funding Justification for Military Child Living On-Base

In a typical community, school taxes come from two sources: (1) the taxation on the property of private individuals (homes, autos, boats, and other personal property) and (2) the taxation of real or personal property used for business purposes. Studies have indicated that normally half of the taxes come from private property and half from business property.

For a student whose parent(s) is military and lives on the federal installation, the intent of Impact Aid is to totally match the local tax effort.

Funding Justification for Military Child Living Off-Base

The most difficult Impact Aid payment to understand is the payment for a student whose parent(s) is military but does not live on the federal property. In this case, the school district still receives the tax on the home where the parent and student lives. The taxes on personal property--such as automobiles, boats, and mobile homes--are typically paid in their home state, as allowed under the Soldiers' and Sailors' Relief Act. The school district cannot tax the military base where the parent works. Neither can the school district tax property belonging to private industry which is located on the base if the military has exercised the right of exclusive jurisdiction. The Impact Aid payment for these students is intended to match the taxes lost as a result of the federal ownership of property, exclusive jurisdiction and the Soldiers' and Sailors' Relief Act.

Economic studies, which have been authorized by Congress, have always verified that the full rate for the military child living on base and the half rate for the military child living off base are fully justified. However, contrary to those studies, current funding for the "off-base" military child is only two-tenths of the "on-base" military child rate.

 

 

How Are Funds Determined?

 

Revenue sharing for Impact Aid is determined by multiplying the number of "on base" military students and "off base" military students by the per pupil rate. The "off base" rate is 20% of the "on base" rate. The per pupil rate, of course, varies from state to state.

 

If Impact Aid was funded at the original established levels, funding for FY 2004 would be:

 

Military Student living on base $3,300

(actual funding is $2,200)

Military Student living off base $1,650

(actual funding is $450)

 

Recruit an Individual . . . Retain a Family

 

Quality of Life is an integral part of military readiness. The military can strengthen its recruitment and retention by focusing its efforts to support and partner with local military districts.

 

A study of recruits conducted by the Department of Defense found that 50 percent of today's military enlistees were former military dependents. Increasingly, military leaders are looking to the sons and daughters of today's noncommissioned and commissioned officers as their next generation of military personnel. Positive educational experiences in the lives of military children could have a dramatic impact on the military's efforts to "grow their own."

 

  What Needs to Be Done?

 

School districts and communities should not have to continue to exist under a cloud of uncertainty. Quality education rests in part upon the ability to make long-term financial plans and commitments. State laws require contractual commitments to staff to be made months before Congress makes a final commitment on funds to be made available. A permanent solution needs to be found for funding Impact Aid. DoD needs to continue to be an active participant in the solution.

 

What can you do?

• promote understanding of the need for funding

• keep current on the program and its funding

• be an active advocate of the program

• communicate with local and state officials

• communicate with congressional leaders