The Indiana State sentinel. [volume] (Indianapolis) 1868-1895, 1892-04-27
THE NEW TAX LAW.

OOhbAACicQ tlC law DTONluIDR LOT n SDcClAl
tax of cents on 500 for the support of
the benevolent and reformatory institu-
tions of the state laws OF 1891, chap.
l23. p. 334), and it has been necessary
to defer this consideration until the re-
turns of the tax duplicates had been
made from the counties, in order to as
certain the exact results of the assess
ments and levies. The fact that the state
was not raising enough revenue to pay its
current expenses when the last legis-
lature met was generally known, but the
extent and character OF the deficit were
to the Legislature, at the opening of the
session, Governor Hovey said OF the fnan-
cial condition of the state:
Taking the above figures, not including Spe-
cifc appropriations that may be passed By he
legislature, as a basis, the deficit and
above the net receipts for the yeRrgl69l would
be 7,OS0.SS. The estimated necessary ex-
penses OF the state government for the year
1892 are Sl,S73 090, and for 1893 81 99S 090
which would leave deficit at the end of each
year, respectively, OF S434,9 aud S549,939 10
which deficiencies should be added any dddt-
ton appropriations Eat may be maze by the
legislature for those years. Immediate pro-
visions, in my opinion, should be made for the
relief OF the treasury, the importance of which
can readily be seen a continuation of the
increase OF the state debt becomes necessity
unless your honorable body enacts such laws
as may increase the receipts of the state equal
to the necessary expenditures and Rppropria-
tions. =
Since 1877 a sufficient revenue has not been
raised to pay the expenses of the state, and
every year has added 10 our indebtedness until
TOD =. -
sum OF SS.540,6l5.l2, with "A still increasing In
debtedness, unless some relief can be obtained
by legislation. With the same system that has
heretofore prevailed, we will still have TO bor-
row money to sustain our institutions aud ex-
penses OF the state, with an annual deficit of
for such purposes should cease. We have no
right TO mortgage our future revenue to be
paid by those who may come after us.
This statement ia fair enough, SO far as
it goes, With the exception that the stated
probable deficit of "about $500, 000' per
annum is obviously an underestimate.
The average of the three years mentioned.
$780, 1891 and 1892, is S577 ,319, and to this,
as the governor saws, should be added
any additional appropriations that may be
made by the legislature" These ad-
ditlonal appropriations will average at
least 100000 per annum, with a reason
ably economical legislature, and il was
therefore evident that il there was to be
made any reduction of the state debt,
which began to fall due in 1892, the rev.
enues must be increased at least 81 ,000, 600
per annum.
There is also an inference in this state
ment that the growth of tho state debt was
due to ordinary expenditures, which is
misleading. In 1877 the state levy was
fixed with view TO meeting expenses az
the state was then conditioned. and it had
not been increased afterward; but since
that time the state had made large addi-
tons to its permanent property, for the
cost of which no special revenue was
raised. The principal OF these were the
new insane hospitals at Evansville,
Logansport and Richmond, and the
women's hospital at indianapolis, the sol
diors and sailors 'orphans' home at Knights
town, the new buildings at the institu-
tons for the blind and deaf and dumb,
and at Purdue and the state universities,
and the state soldiers and sailors monu-
ment
In addition to these should be men
toned the equipment Of the state house,
for though a special tax was levied for the
construction of the building, it was held
that this did not include furnishing the
building after it was constructed, and the
sum OF S707 800 was expended on this ac-
count from the ordinary revenues, and, of
necessity, so much was added to the debt
AS to the necessity for these buildings
there can be no question. No political
party has ever questioned the propriety Of
the expenditure for any one of them, and
no party will ever question it. AS state
increases in population there Is necessa-
I'll IN Tho har Of Nm for
Inmates and criminals TO be cared for, and
If the state is increasing in civilization
there will also be a continual improvement
IN the care given to these classes. In this
cnse, on account OF the provisions OF the
state constitution concerning state debt,
the whole matter was submitted to the
courts, and the supreme court composed
at the time OF four republican judges and
one democrat) decided as follows:
The court has knowledge that the state has
been engaged for several years in providing
public buildings and necessary stats institu-
tons, and that unusual and unforeseen expeRd-
lures have been required, calling for appropri-
atoms of public money. We also take notice
that public law has been enacted under which
q suitable memorial TO the valor and patriotism
of Indiana soldiers is in process OF erection at
the capital of the state. All these are subjects
which pertain to the public welfare OF the peo-
pie and are within ordinary legislative dis
cretion.-HoUe governor, u.s. Foster, lis Ind.
502, lat p. 5l0)
1t is also to be borne in mind that the
increase in state institutions necessitstes
an increase in operating expenses. In
1877 the total expenditure on this behalf
Tor the benevolent and reformatory insti-
tutions was only $40, 900 per annum (audi-
tors report 1878, p. 49,, but at present it
has increased to 81, Ill 400 per annum
auditors report 1890, pp. Hip. In the
same period the earnings have increased
$4,000 per annum, SO that the net annual
expenditure is $50, 400 moro than it was
when the levy of II cents on 500 was
fixed in 1877. At the same time there
had been no increase of valuation such as
might ordinarily be expected The total
assessment in 1877 was 1885, 100. l25, but it
has never been so great since then except
in the one year 1879. On the contrary it
went down to S72S944 ,23I in 1880, and in
it's gradual recovery it had reached only
SS43, 4S3, 466 in 1899. That is to say,
for fourteen years tine state of Indiana
had been maintaining a fixed tax rate OF
IL cents on 500, notwithstanding her ex-
penses were continually increasing and
her tax valuation had suffered a serious
shriukage. The only wonder is that the
financial condition of the state is so good
as il is and this is in truth due TO skillful
finauciering. 1t is notable fact that in
1877 the annual interest charge OF the
state was sos, 026.99 whiie at present 1t