The New York herald., 1921-10-05
NO EXTRA SESSION
TO SETTLE TAX Rate
Automatically Lower, Mil
Ter Announces, Bond Is
sue Being Cancelled.
DEBT SERVICE INVALID
Court Decision Renders
Item Void, He Tells Comp
troller Craig.
SAVES $12,666,18O DIRECT
But Reduction Will Be More
Than Offset by Local
Taxation.
DEBT SERVICE INVALID
SAVES $12,666,1S0 DIRECT
Srecid' Despatch to rHE New Yonx HnaALp.
New York Herald Bureau,
AIhAuv. (lAk. a

/
| New York Herald Bureau,
Albany, Oct. 4.
| No extra session Of the Legislature
will be necessary to correct the direct
tax law. Gov. Miller announced to-
night 1t had been asked by Comp
! troller Charles L. Craig Of New York,
who held that the law in It's present
form was invalid because it provided
for the payment of interest on solder
bonus bonds, which the Court of Ap-
peals had declared unconstitutional.
The Governor. in q letter to Comp
troller Craig, said the entire debt SER
vice item, which included the soldier
bonus bond interest, could be cut out
Of the direct tax law without the ne
cessity Of calling an extra session OF
the Legislature.
"The effect Of the decision OF the
Court Of Appeals he said. "is to render
the entire item OF .7727 mills for debt
service invalid and void. It therefore
becomes the duty OF the State Comp
troller. In certifying the state tax, and
Of the legislative bodies OF the seevral
counties in levying the same, to omit
the void item for debt service and the
state Comptroller will issue certificates
certifying the amount OF tax for State
purposes that can validly be levied un-
der the law az It now exists, thus en-
tirely eliminating the void item. The
result will be that the appropriation OF
| $1l,475.359.67 for debt service will have
to be mot from the general fund pre-
cisely as II would be the duty Of the
| State Comptroller under the constitu-
ton to make the necessary payments
from that fund even II no appropriation
! had been made therefor, and there will
be practically no State tax except the
mill and half tax imposed for the sup
port Of the common schools and teach
ers salaries.
"Fortunatly the treasury ia In a con-
dition to meet the payments necessary
to be made this fiscal year for debt
service and the taxpayers may thus at
once, and at a time OF the greatest need,
get the benefit of the economies which
have been inaugurated In the public
service of the State. The result will
be a reduction Of the tax rate from
2.695 mills last year to 1908 mills this
year and q total reduction In the
amount Of direct State taxes OF $12.-
/ s6s.1so.35 as compared with last year.
onset BY Local Taxes.
"If comparable reductions in the ex-
pense Of local. county and municipal
governments had been effected. the bur-
den on real estate and the serious tax
situation in the city Of New York. to
which you refor. would not exist. Un-
fortunately in many localities, and no
tably In the city Of New York. the tax
burden has been increased at time
when economic conditions made sub
stantial decreases essential to the pub
lie welfare, with the result that the re-
duction in State taxes. substantial as II
is. will be much more than onset by In
creased local taxation.
However that makes II still more
important to keep the State tax rate as
low as possible and doubly gratifying
that II Is not necessary to convene the
legislature In extraordinary session to
provide a substitute for the tax item
which under the decision Of the Court
OF Appeals Is invalid"
The direct tax law this year imposed
tax OF 2.227 mills on each dollar Of
real and personal property. It was d.
vided into three items: .0043 for claims,
.7727 for debt service. including inter-
eat on the soldiers and sailors bonus
bonds. on other State bonds and contri-
buttons to the sinking fund and 1.5 for
schools and teachers salaries. Attorney
General Charles d. Newton In an opin-
ion to the Governor said that It was per-
fectly proper 70 levy the tax for the first
and third items, but that the second was
unconstitutional end could be omitted
from the tax without action OF the Legis-
laturc.
state Credit Unimpaired.
Foregoing the State tax for debt SER
vice this year." he declared. 'interferes
not at all with the payment Of principal
and interest on State bonds nor with
contributions to the sinking funds. for
the Legislature by the appropriation bill
has appropriated the necessary moneys
from the general fund. and had It failed
to DO 20 the Comptroller would have
been Obliged to make the payments from
that fund (Constitution, Art. VII. Sec.
11). The general fund can stand this
debt service until the Legislature next
meets In regular session"
Mr.. Newton said that II was not too
late for the State Comptroller to issue
new tax certificates based on the re-
duced rate 70 the different county legis-
lative bodies. as the actual levy of taxes.
including the State tax. does not cus-
tomarily take place in upstate counties
until after December Is in each year
He said that from Comptroller Craig's
letter there 10 yet time before October 10
for the Board Of Estimate OF New York
TO correct its tentative budget.
=-========-=====-====-- -