Shenandoah herald. [volume] (Woodstock, Va.) 1865-1974, 1925-11-13
STATES DEFICIT
ESTIMATED 81, 700, GOO
Decrease In Receipts From Income
Tax Partially Responsible

Analysis of the States financial |
condition shows that, although the
floating debt has grown to So
$50. 900, the actual deficit, which
was created by an unexpected de-
crease in revenue in 1928, is about
the same it was when the General
Assembly met in 1924. When the
Legislature adjourned in 1924, it
was with the knowledge that the
Treasury faced a deficit of APP
proximately s1,700.00O. No provi-
sion for retiring this deficit was
made, the lawmakers hoping that
at least portion of it would be
absorbed by an expected natural in
crease in revenues.
Although it is too early to give
an accurate estimate of what the
deficit will amount to March 1,
1926, Chief Clerk Sale, of the Audi
tors office said yesterday that he
did not expect it to be any more
than s1,700,000.
True Picture of Finances
! In order to give the public
true picture of the States finances,
it is necessary to mention the con-
ditions, which created the deficit
The Treasurer first negotiated
loan in 1928, the first money Dor
rowed by the Commonwealth since
1911. A small sum was borrowed
to make the first payment to the
schools, which is due November l, ,
although the revenue from the IA
cent land tax for schools does not
come in until December.
In previous years the State had
managed to give the schools money
without borrowing, due to the fact
that there was always a balance on
hand credited to some other fund
The road funds, for instance, were
never used by the Highway Depart
ment as fast as they came in. But
in 1923, road construction reached
its stride and caught up with the
revenues.
/ Advance School Tax
This year the one-half of the
school tax-S1, 6,000-has been
advanced. in addition to one-half of
the 10-cent levy for roads, which
will be available in December. This
makes total of approximately ST.
100000 which has been paid out in
advance of the receipt of the taxes
The advance of 100000 for road
construction was provided for by
the last General Assembly, which
empowered Governor TrinkIe to
anticipate the 10-cent road tax
1t will be seen therefore, that
only about s1.55O.OOO of the s3,-
100000 floating debt may be term
ed deficit
Result of Decrease
The deficit itself was the result
of tremendous decrease in the
receipts from the income tax and
the tax on intangibles in 1923.
When the biennial budget was
passed by the General Assembly,
it balanced with the estimated
revenues, with a good margin of
safety on the right side of the led
ger.
When the years revenues came
in, however. it was found that the
income tax had fallen from ST.
100000 in 1922 to s1,10O,000 in
1928, and that the reduction of
the rate on intangibles had cut
the States revenue from this
source by approximately 100000.
Drop in Revenue.
In addition to a drop of 81 600,-
600 in the revenue-an eventuality
which could not have been foreseen
the State had devoted 100000
to the State Office Building. The
building cost almost S1,000,000 of
which sum about one-half came
from Virginia's share of the West
Virginia debt. The General As
sembly authorized payment of the
remaining 100000 out of the gen
eral fund.
Thus, 100000 of the deficit of
$1,700,000 was represented by a
tangible asset which stands in Capt.
tol Square But for the startling
drop in the income and intangibles
tax, the Treasurer would have a bal
ance today instead of deficit. AS
it is. the loans made in anticipation
of revenues will be paid off by jan
uary 1, leaving a sum which repre-
sents the old loss from the 1923 up
set in revenue estimates.
KEEP A COIN