Pocahontas star herald., 1927-03-24
AID TO THE SMALLER
SCHOOL DISTRICTS

As tbe provisions Of the Act passed
bv the recent legislature creating he-
volving Loan Fund becomes better
known. its benefits appear greater ana
moro far reaching. Schools that have
been handicapped in the past through
their inability to make some loans for
building or current expenses VIII pe
Senabled To borrow money to tide them
over. 1t is provided that the FUND
shall be administered by the state
Board of Education for the purpose 't
aiding needy school districts In repair
ing. erecting and equipping necessary
school buildings and in paying OFF out
standing Indebtedness on buildings al
ready erected and equipment already
purchased" The loans are limited TO
$4,000 and no district can borrow
more than seven per cent of its assess
ed valuation. Another requirement Is
that the electors of the districts must
first vote a millage sufficient to carry
the loan before it is made, to continue
until the loan is paid off through the
transfer of bonds in the permanent
school fund and other provisions for
providing the revenue. There will be
something like $4,OOO,OO0 available for
loans.
This Act is one of the honest efforts
on the part Of the General Assembly,
! following the suggestions of the edu'
cational leaders of the State, to equal
ize the educational opportunities of
Arkansas. Those who have made a
study of the situation believe that
great impetus will be given the school
system generally and that conditions
which have hampered the rural dis
tricts will be overcome. One of the
desirable features of the law is that
tn einterest rate is restricted to six
+ per cent whereas nearly half of the
districts under the old system have
paid rate in excess of that amount
and large number have paid as much
as ten per cent. Records have been
compiled showing that in 1925 and
1926 there were two hundred and ten
loans floated, amounting to $6,479,379.
OF those loans 90 were for $4,000 or
less. OF these 90 loans 66 per cent
were foated at interest rates above
6 per cent, in fact 5S per cent were at
rates of per cent interest or more.
Only one loan Of $1,000 was floated at
less than 6 per cent interest For the
most part, all loans of $4,000 or more
were for 6 per cent interest or less,
There are, however, a few instances
where large loans were made at rates
of per cerit or more a
In order for n school district to par
ticipate in this fund they must present
a petition to the County Board of Edu.
cation of not less than ten per cent
lof the electors, asking the County
Board to call an election which may be
called for the time of the regular
school election or for some other time
In calling this election the County
Board win advise the local board the
amount needed and the number Of
mills taxes will be necessary to retire
the loan. The electors shall vote "for
loan. mills" or against loan"
After the electors have voted 'fOr
loan" the local board sends an applica-
tion to the State Board of Education
through the County Board Of Educa-
tion, accompanied by a transcript Of
proceedings in the matter and an alb
stract Of title to the real property he
longing to the district.
The State Board of Education, with
the assistance of the Attorney General
determines whether the district is en-
titled to the loan.
These loans should bear interest at
a rate of not more than six per cent
All funds in connection with these
loans are handled by the State Board
of Education through the Office of the
State Auditor and State Treasurer
When loan is approved The money is
sent to the County Treasurer and paid
out on the warrants of the local school
boards as in the case of other funds
No officer is entitled to commission
for handling these funds.
School districts are required to keep
buildings insured.
The State Board of Education is
authorized to make such rules as are
not provided in the law.