The log cabin Democrat., 1915-01-02
LOAN OF Sl,O0O,0OO URGED BY HODGES TO PAY STATES DEFICIT SECRETARY OF STATE OFFERS SOLUTION FOR FINANCIAL
 PROBLEM.


 State Earle Hodges, in his biennial report to the coming legislature, en- deavors to solve the financial prob lem of the state by recommending the borrowing of $1,000,00O for a period of 10 to 20 years and the creation of special tax levy to pay the loan and interest
 The report sets forth that this sum should be put in the states general revenue fund immediately, and that it would be sufficient to enable the state to operate on cash basis until next July, when county sheriffs will make their settlements with the state. nat the amount of tax money col lected by a tax levy for general ex- penses of the state government is far too small is MT. Hodges reasons for the depleted condition of the general revenue fund.
 Fees paid into the secretary of states office during the last two years aggregate $85,289.45, according to figures compiled at the close of busi- ness last night
 Fees for 1913 totaled $43,09O and for 1914, SAP, ,56O50.
 "The impression has gone out that Arkansas is broke, but this is not true,' says the report of the secre- tary of state
 Ut has merely come to the point w Uhnpa Tho of tox oJ lected by a tax for general expenses of the state government is far too small to meet the necessary expendi- lures. In 1905 the state auditor in his biennial report advised the gen. eral assembly that if reduction were made in the general revenue tax levy, as was being planned and agitated at that time, the fund would be exhaust ed within two years. He also told the legislature that there would continue to be a deficit in the general revenue fund, which would grow larger each year until the tax levy for this pur- pose was increased to the old figure y
 "The general assembly did not heed the friendly warning, but made the reduction in the levy, and within IS months the surplus in the vaults of the state treasury were gone and the deficit had arrived. This reduction was made, too, at time when, if any change at all were to be made, it would appear as if an increase would have served the state better, as there followed the establishment of four agricultural schools, normal school, a tuberculosis sanitorium, reform school, with all the necessary appro- priations for these institutions, as well as extensive additions and build ings at the state university, deaf mute institute, hospital for nervous diseases, and such, and every cent of these enormous expenditures came out of the general revenue fund, which had only recently suffered a decided reduction. Hence, there has been deficit each year since 1907, which has gradually grown until it has assumed considerable proportions.
 In other words, to meet the legiti- mate and necessary expenses of the executive, legislative and judicial departments of the state government during the last two years, the general assembly appropriated from the gen. eral revenue fund, for use in these departments, in round numbers, $3,- 200,000, while the tax levy for the support of these departments brought into the state treasury only $2,S0O,- GOO, which leaves deficit of about $400,000 for the two years. Before that time, and during the last seven years, a deficit had accrued amount ing to S600,000, making the actual de- felt at this time approximately $1,- 000,000.
 ''It is true that there are only about $400,000 in state warrants now out standing against the treasury, but there has been necessarily borrowed from the future each year, which should properly be in the fund at this time, enough money to pay the ex- penses of the state government for the next six months, until the annual settlements of the sheriffs of the state with the state treasury
 This means about $100,000 month, or $600,000 dhcich has been borrowed from the future, which, added to the present actual deficit of $40O,000, brings the deficit up to $1,000,000."