The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1914-11-21
MUST Be DONE
Raising of Tax Levy Would Be
Most Unpopular.
At That, Present Board Is Do
ing Better Than Usual.
New Gag" Rule Applied by
Topeka Sch0Ols3

III DdIlkS III tIlc CITY $AS1,VVV Ol WuACu ~
receives one per cent more interest than
f, does the city school board for money
| in the banks credited to similar funds.
In addition to this money for which the
city receives an interest rate one per
cent higher than that received by the
school board. it also carries a checking
account and receives two per cent in
terest on daily balances.
But while the city Of Topeka is get
ting more than $4,000 annually in in
terest, the school board of the city is
stamping its warrants Unpaid for Lack
of Funds and is paying interest on
these unpaid warrants at the rate of
$2,722 annually. This amount pays only
the interest. It does not reduce the
Indebtedness in the least. There are
now general fund warrants and building
fund warrants against the school dis
trict stamped Unpaid for Lack Of
Funds amounting to $45.369.49. The
warrants bear interest at the rate of 6
per cent per annum.
Is there a way for the school board
to escape this high rate of interest?
Yes. The city found q way to re-
duce the interest rate when confronted
by like situation several years ago.
But the city did not make this dis
covery until 1t adopted commission
government, and the school board has
not yet learned the way.
Big Bonded Interest.
But the interest on the floating debt,
large as 1t is. is insignificant. when
compared with the interest on the
bonded debt OF the school board. The
interest on the bonded debt amounts
to more than $25.500 annually. This is
what 1t costs the taxpayers Of the city
because the school board Is doing bust
ness on credit instead of q cash
basis. More than $4,000 is paid every
year and yet the school debt remains
just as big as ever and the district is
no nearer a cash basis than before the
money was paid.
There are only two ways for the
district to get on a cash basis and
thus escape this annual $4,000 in
terest charge. One way is to raise the
tax levy. The levy is already SKY
the state has a higher school levy.
The only other possible way is by
having a margin left between the an
nuAl operating expenses and the an
nual income derived by taxation under
the present rate.
No Margin Last Year.
And there was not any margin left
last year, and members. of the school
board do not expect any at the end pf
the present year. In fact they expect
a deficit
But the present school board Is do
lHS DctteT An the matter OF paying us
bonds as they come due than was the
case with previous boards Until two
years ago it has been the policy of the
board to meet its bond payments when
they matured by the simple expedient
of issuing more bonds. Two years ago
a five mills levy was made for an in
terest and sinking fund. There is now
$23.537 in this fund. By July l, of
next year there will be money enough
to pay $4,000 of bonds which mature
on that date. For the first time in the
history of the school board there will
be money ready to meet the payment
without the necessity of selling refund
ing bonds.
But the reduction of the bonded
debt by $4,000 will not mean a re-
ductiOn in school taxes, for more bonds
January /, 1916, and it is not the
intention of the present board to issue
any more refunding bonds. Indeed a
reduction of the bonded debt does not
mean any reduction whatever in the
total Indebtedness Of the schools, for
while $23,537 has accumulated in the
sinking fund with which to pay bonds
and interest, $45.368.49 has been issued
in warrants unpaid for lack for
funds So it seems that the debts of
of the school board are accommodating
twice as fast as they are being paid
of.
1t cost $s6O,O0O to run the schools
from Oct. 1. 1913 to Oct. 1. 1914. At
present there is more than q half
million dollars of bonded Indebtedness
against the school district. This and
the floating Indebtedness aggregate
$566.529. This indebtedness is as fol-
lows:
Bonded Indebtedness of Topeka
board of education:
not0 NJ