New Mexico state record. (Santa Fe, N.M.) 1914-19??, 1917-01-26
TAXPAYERS ASSo-
CATION ADVISES
ABOUT ROAD FUNDS
DIRECTOR N SHOWS
THAT IT WOULD BE MUCH
CHEAPER TO RAISE MONEY
BY FIVE YEAR TAX THAN
BY BOND ISSUE

In the event New Mexico decide
to undertake a program of extensive
road construction and improvement
during the next few years, the Tax
payers Association of New Mexico
will favor the securing of necessary
funds through a direct tax levy
rather than by a bond issue, as sug
gested by State Engineer James A
French in his recent biennial repor,
to the governor. This statement i.
made on authority of A. E. James
director Of the association.
In his report Mr.. French outlined
plans for a state highway system
involving a total expenditure OF
about $5,500.00O, to be completed
within the next five years. He es.
timated that work already complet.
ed had a value of $1,l25,OO; explain
ed that the provisions Of the fed
eral aid road act made available to
New Mexico, in a f~ive-year period,
the sum of $1,l70,00 provided the
state was able to meet the federal
appropriation with a like amount
and concluded by showing that ap-
proximately $2y0O0,0O0 would be ne
cessary in addition to the ordinary
state revenue for roads, to enable
New Mexico to secure the federal
aid and complete the state highway
system as outlined. His suggestion
was that the money be raised by a
state issue of bonds.
The Taxpayers Association, Mr..
James states, favors any reasonable
expenditure for road Improvement
in New, Mexico, and is in sympathy
with Mr.. French's highway plans.
But It Is strongly opposed, for rea-
sons of expediency and economy, to
bonding the state for road revenue
to the extent suggested. Briefly, its
reasons are as follows:
1. ; Such an issue as proposed
would bond New Mexico to the IL
NIT fixed by the constitution. which
is | per cent of the assessed valua-
ton. thereby rendering the state
powerless to raise funds in the event
Of an emergency.
z A 100000 bond issue, with.
an interest rate of only 4 per cent
and under the most careful finan-
cial supervision, would cost the tax
payers of the state, in principal and
interest, 4 total Of $,4s6,3sl, or ST.
AS6,3sl in excess of the amuont &C.
tually secured for roads. Thirty
years would be required for the IL
quotation 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
$4,000 net a year, or the required
10000 IN five years; This ley
the levy under a bond issue as one
half mill would be necessary to pro-
vide interest and a sinking fund, and
i would continue for q period Of on
y five years. At the end of the five
year period. under the taxation plan,
the taxpayers would have no further
expense; under a bond issue they
would continue to pay one-haif mill
yearly for 20 years. resulting In an
exees: cost to them, as stated, of
P1.As6,Xl.
In couaection with the proposed
bond lsswe L has been argued that
The automobile license fees could be
ased to pay the interest and create
. sinking fund. However, M. James
cites the fact that in 1916 the net
automobile revenue was only S40,-
1856; that the logical use for this
money ls road maintenance; that i'll
( were used for any purpose other
than road maintenance or consteuc-
Hon its equivalent would have to be
by taxation, and that in the
md the result would be exactly the
eAntc.
Figures prepared by Mr.. French
presenting in detail the cost of a S.
bond issue, show that at the
md of II years the interest paid
md the sinking fund would equal
he amuont of the issue, but that
here would be on hand for pur-
poses of liquidation only $907JO44 {
the payment of the 100000.