The Clayton news. (Clayton, N.M.) 19??-1954, 1917-01-27
TAXPAYERS ASSOCIATION
SHOWS THE WAY
ED IN PREFERENCE TO bond IS
SUE; GOOD REASONS. TOO.

EsAt ~ EhtF EshtsNN III hONb -
SUES GOOD REASONS, TOO.
Sants Zee, Jan. 2e.-In the event New
MexicO decides to undertake a pro-
gram OF extensive road construction
and Improvement during the next few
years, the Taxpayers Association OF
Nrv Mexico will favor the securing
OF necessary funds through direct
taN leVy rather than by bond is
s.i.. as suggested by state Engineer
JaIncs a. French in his recent biennial
report TO the governor. This statement
is made on authority of A. f.. James.
director Ui the association.
ia his report Mr. French outlined
nians for the state highway system, in
Noiving q total expenditure of about
81 500, 900 to be completed within the
nest five years. He estimated that
work already completed had n value
OF >It25.GpO: explained that the pro-
visions of the federal aid road act
fladc pVallable to New Mexico, IN
fivc->car period, tile sum of $117H,Jo.
/. 'v'dtdthe state was able to meet
the federal appropriation with 1t like
Pans tHi. and concluded by showing
tnitt ,?pioNimately s9000,OO0 wopli
H." rcessary, In addition to the ordi-
a1r.' state revenue for roads, to en-
~ l, .N,w Mexico to secure the federal
oi't src complete the state highway
s,.tcni as outlined His suggestion
RlS tuat the money be raised bV
state issue OF bonds.
The Taxpayers Association, Mr.
James states. favors any reasonable
3 expenditure for road Improvement in
} New Mexico, and. is o! .' ma thy with
Erpupb's bi,rhty.,... l,.uua Hut IL
is strongly opposed for reasons of ex-
pediency and economy, to binding the
state for road revenue to the extent
suggested. Briefly. it's reasons are as
Follows:
l. Such an issue as proposed would
/ bond New Mexico to the limit fixed
by the constitution, which is l per
cent of the asse eseed valuation, there
! by rendering the state powerless to
raise funds in the event of an emer-
Gency ....-...-. ..-......--.
4 p a $2,000O0O bond issue, with an
/ interest rate of only per cent and
under the most careful financial su-
pervision. would cost the taxpayers of
the state. in principal and interest.
total Of s3,456,3 1851, or S1,456.351 in sex-
cess of the amount actually secured
for roads. Thirty years would be re-
/ quired for the liquidation of the debt.
! Under a plan of direct taxation Mr..
James points out. a levy OF one and
one half mills on the present assessed
valuation would provide 100000 net
a year. or the required $4,000. 900 in five
years. This levy would be only one
mill higher than the levy under n
bond issue as one-half mill would be
necessary to provide interest and II
sinking fund. and IL woud continue
for period of only Ave years. At the
end of the Ave year perid. under the
taxation plan. the taxpayers would
have no further expense; UNDER a
bond issue they would continue to pay
one-half mill yearly for 80 years, re
sulting in an excess cost to them. as
stated. S1,456.S51 i
In connection with the proposed
bond issue. II has been argued that
the automobile license fees could be
used to pay the interest and create a
sinking fund. However. Mr. James
cited the fact that in 1916 the net au-
tomoble revenue was only $40, ,955. sc
that the logical use for this money Is
road maintenance; that II II were
used for any purpose other than road
maintainance or construction It's equiv
taxation. and that in the end the re-
suit would be exactly the same.
Figures prepared by Mr.. James.
presenting in detl the cost of a ST.
OO0.0 900 bond issue, show that at the
end of II years the interest paid and
the sinking fund would equal the
! amount of the issue. but that there
? would be on hand for purposes OF
t liquidation only $907,04f. His figures
. are based on the assumption that as
5 many bonds as possible could be. and
: would be. retired at the end OF 20
B years. and that all interest earned on
{ the sinking fund would be credited q
= that fund. In other words he has
made the most favorable presentation
possible. Mr.. James figures follow
COST OF STATE HIGHWAY PROJECI
nOnd Issue w. Tax Levy
a FIVE YEAR PROGRAM
n Cost In Seventeen Years
= Bond Issue Tax Lev!
, ! Interest 4 nc Sl28O.OOO