The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1927-07-12
Tax Suggested 10 Pay Inter-
est BY l. v. A.'s-Nonpar-
tisans Contend It Would Be
Unwarranted Imposition on
Taxpayers-B0th Sides Say
4 Told You So

laXpayerS-BOth SIDES Sa,
4 Told You So
| Re-opening of an argument which
began last summer and rage,
Throughout most of the last sessio,
of the legislature is scheduled FOL
August and September when tn.
state board of equalization viii
meet to determine the state ia,
levy for 1929.
The argument hinges on the cues
ton of whether a tax should b.
levied to pay interest on the $25,
100000 Of state real estate loar
bonds now outstanding. Independ.
ent officials are expected to con.
tend that a levy is necessary ane
should be made. They are expect.
ed to recommend that it be of sui.
ficient size to raise between $780,.
600 and $75O,OOO.
Leaguers Den0unce Levy
Nonpartisan officials are expect
ed to contend that levy would
be an unwarranted imposition upon
the taxpayers. Their contention is
that collections from real estate
loans made by the state from the
proceeds of the bonds will more
than pay the interest on the bonds
and provide sinking fund for the
retirement Of the bonds when they
come due.
Regardless of the outcome sched-
uled for later in the summer it
would not be surprising if the mat
ter should become a campaign issue
in the primary elections in June,
1923.
Records available as of June 30
showed $1,6l7,291.41 in the state
bond payment fund. OF this sum
$442,4O5.7G was available for pay
ment as interest without using any
of the money set aside for the re,
tirement of the real estate bonds
when they come due.
On July l the interest on all out
standing issues Of real estate bonds
became due and totalled approxi-
mately ,$7O5,OOO. Apparently this
leaves deficit of $500 ,594.24 in the
fund intended to care for the inter-
est on the. bonds. Other collections
to be entered. however, will reduce
this figure to approximately $685.
900, according to the books in the
state treasurer's office and those in
the Bank Of North Dakota.
Two Arguments Offered
There the agreement ends and the
begins. The State Treas
urer, Nonpartisan, offers one idea
and the Bank of North Dakota, con-
trolled by the Independents, offers
The voters probably will
be asked to settle the controversy.
The position Of the bank, as ex-
pressed by the state industrial COM
is that interest should be
charged off when it becomes due
and payable, hence the interest pay
ment fund is $239,OOO short and a
tax should be levied to restore it
to its proper position. They add
that past experience with collec-
lions has been such as to indicate
hat it would be good judgment to
evy a tax sufficient to meet the
existing deficit and an additional
AK sufficient to meet the addition
Il deficit which may be expected to
,e created before the next interest
laying period comes around jan
larry l..
In order to keep the states credit
.ood the bank must have sufficient
unds on hand in New York to meet
he interest coupons payable there,
t is contended, and therefore the
interest should be charged out when
ue.
The treasurer's office contends I
hat the money does not actually
cave the interest fund until the
oupons are presented and paid.
ome of the coupons do not come
4 for weeks and in the meantime i,
dditional collectionsof interest due ,
he state increase the fund with the
esult that it may never have to
raw on the money listed as avail
BILE for retirement of the bonds
hen they come due.
Not only does this viewpoint con-
End that no levy is necessary to I
lake up the $239,OOO in the inter- 7
st fund as Of July ! but that no !;
wy is necessary to take care of ,
ny anticipated shortage. The
sason is that the Nonpartisan
iewpoint does not concede that /
portage will exist. Collections q
i'll be better between now and v
anuary /, they say, and by that r
me the bond fund should show a h
It surplus. Y
The Independents call the Nom
artisan unwillingness to charge /
f the interest when due the same d
ling as "check-kiting." Their
ildest charge is that it is bad
bookkeeping and fallacious financ- s
The Nonpartisans contend that it p
not good business to charge q
with a deficit when
ere is plenty of money in the fund
!. meet the interest coupons as t
ey are presented or to anticipate n
ouble to the same degree as the Z
dependents. The fund is solvent 0
I'VE and will remain so, they con- a
nd, and future collections from O
al estate loans will show that no
Wy is necessary. ?
Since the states credit, as we'll ;
the real estate loans, is behind 9
e bond issues there is no reason
r the bond holders to worry, both
des agree, but the Independents p
intend that failure to make a levy h