ABSTRACT
The impact aid program provides construction and operating grants to school systems in which there are large concentrations of children of federal employees. The rationale for the impact aid program, which dates back to 1950, is that large federal installations, such as military bases, may add to local demand for services without contributing to the local tax base. The program makes payments directly to local school districts. The program distinguishes between type A children, whose parents both live on federal property and work there, and type B children, whose parents either work or live on federal property but not both. The reconciliation act phased out aid for type B children over a three-year period. The reconciliation act made certain other small changes; for example, the operation of schools on military bases has been transferred to the Department of Defense. Since impact aid was largely without "strings," one might expect that impact aid money has been disproportionately used for administration.
