The Brattleboro daily reformer. (Brattleboro, Vt.) 1913-1955, 1921-01-29
DEFICIT LIKELY,
EXPENSES TOO HIGH
81, 100000 Bond Issue Was
Not Necessary for Sol
der Bonus - Accent
State Tax Not Required
Either - Clement Run
ming ''True to Form"


The Burlington Free Press prints an
interview with Olin Merrill relative to
Nermont's state finances, with particu-
lar reference to the alleged surplus of
S2.59O,0OO. Mr.. Merrill shows that the
issue of bonds by the state to the
amount of $15OO,OOO was not necessary.
or that the state tax of 40 cents on a
dollar of the grand list was not needed.
Mr.. Merrill makes the interesting and
not altogether reassuring statement that
at the end of 80 years the bond issue
will have cost the taxpayers of Vermont
a total of 2,5O9 469.SO. This will nee
essitate the withdrawal from the state
treasury every year for the period
named of $50 64S.96 to meet the pay
ment of the bonds and interest.
1t also appears that the apparent sur
plus of $2,590,00O which it was said
the state would have on hand July !.
1921. was obtained by treating the cash
in the treasury as a clear surplus and
ignoring the fixed charges and pledged
money which the state must pay.
Instead of a surplus Mr.. Merrill in
Dictates a deficit. if appropriations are
made as recommended by the budget
committee of which Mr. Clement was
chairman, of no less than S1.330, 52S.
with a large increase in the. states cur
rent expenses in the net biennial period.
Mr. Merrill questions recommended
tions of the director of state institutions
and recommends that the new governor
instead of the retiring governor should
help make up the budget at the begin
ming of each administration, since the
new governor is always the one directly
concerned. Mr.. Merrill's interview in
full follows:
l beg to acknowledge receipt of your
esteemed favor and | assure you that |
SympathiZe most fully with your purpose
to create spirit and influence that will
insure an economical administration of
the states finances for the two years
ensuing. This is especially necessary.
as the influence rad;ating from Govern
or Clements recommendations for the
past two years was certainly of an en-
tirely different character, and has in
spired largely demand for extravagant
expenditures of money by the present
legislature. | will answer your ques-
tons seriatim.
First: You inquire if. in my opinion.
it was necessary to issue $1.30O000
bonds for the soldiers bonus. Ny an
Swpr is unqualifiedly no
My conclusions are based upon the re
port of the auditor of accounts. which
he makes extending back to 1911 cover
ing the different biennial periods. is I'M
defstandable to even laymen. This in
cludes both the revenue received and dis
bursed
Beginning with 1908 up to 1913 Yer
mont had no direct state tax except in
IDA when 10 per cent tax was lev
led and 1917 when > per cent tax was
levied. Then came extra expenses Incl
dent to the war periOd-particularlv the
large amount of bonus paid our soldiers.
This and other increased eXnenseS inSi-
dent to the war gave US u 20 per sent
tax in 1918 and 1919, 40 per rent tax
1920 and 1921.
In meeting this extra expense two
methods could have been purSued-isSuc
bonds, or increase the tax rate. Ger
tainlv it was not necessary to do both.
which has been done.
If you refer to the auditors compare
tive statement of revenue received and
expended for the years 1917. 1918. 1919
and 1920 you will sec that over 81 .452.-
475.29 of this bonus was taken care of
in the current expenses of those biennial
periods and at the close of 1920 with
this amount fully paid. there was a de
felt of S131 ,07j.66 which would be more
than taken care of, this fiscal year I'M
der the 40 cents tax.
So we have Saddled on to the state
unneCeSSarilv 81 100000 in bonds nay
able $4,000 a year for 80 years When
the last bond has been paid the state
will have paid out 1855. 125 interest and
the discount of sd g}44S0. making the
total. interest and discount, 81 009.-
1880. which with the principal. makes
a total cost to the taxpayers of Vermont
of S2:J09. 1880. This means that it
requires an average of $50. GAS 90 drawn
from the treasury eacI wear to meet the
payment of bonds and interest. To cor
robOrate the report . of the auditor,
which needs no confederation. see treas
urcr's report. also report of the budget
committee, relative 60 surplus.
Long Term Bends Bad. !
Another serious mistake was made
when il was decided to issue the bonds,
in uniting the payment off 80 wears. The
policy of issuing long term bonds has
become obsolete. Some states have even
RESTRICTED the life of the bond by consti-
wears. New HampShire issued $4,000
600 of war bonds in 1918 and 1919. the
last payment in 1896. The average
len0th of time is Il years.
The state of Maine issued $1,000, 900.
an average of II wears. Other in
stances might be given but these states
indicate the trend.
Who was responsible for the 40 cents
tax rate which was absolutely unneees-
About the first of March two wears ago.
the wavS and means committee. upon
being Intercepted by n Free Press re-
porter. gave out as a nrohabiiitv 20
cepts tax the same as 1918 and 1919.
The budget of the different towns of