The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1929-01-07
TAX
LOAD SOUGHT
FOR SCHOOLS
Business Director to Ask
Different System on
Bond Issues.
CITIZEN NOW HIT HARD
Whole Burden May Fall
in Single Year on
Taxpayers.

Indianapolis clJlZenS Will De re-
lieved of the burden Of excessive
school taxes in any one year. caused
by bonded Indebtedness retirement,
if the legislature looks with favor
on bill being prepared by Albert
F. Walsman, school business di-
rector
This bill would prevent issuance
by the school city of other than
serial bonds. 1t was drafted as a
means of preventing recurrence Of
situation such as the Indianapolis
schools will face in 1889 1910, when
$4,52o,000 in bonds will mature.
Walsman said members of the
general assembly, with whom he has
conferred in regard to the bill, have
not decided whether to confine its
provisions to the Indianapolis
school city, or make it apply to all
school corporations Of the state.
Blow Fails Heavily
Serial bonds are those maturing
over a definite period of time, with
regular, equal annual payments.
In the past, Walsman said, many
issues have been f1oated by school
boards with the principal maturing
all in one year, that year convent
emily set for a time when new
school board would be faced with
responsibility of raising funds for
their retirement. The bill would
prevent this embarrassment of fu-
ture administrations.
This would be accomplished by
providing that all bonds issued must
be serial bonds, extending over a
definite period of not less than three
years nor more than twenty-five
years.
AS further precautionary meas
ure, provision is made that no serial
payment of any issue for any one
wear may be more than 100000.
Would Lessen Burden
Thus 100000 issue could not
be extended for only three years,
with annual $330,0O0 payments, the
minimum time permitted for such
an issue under the bill being ten
years, with 100000 retired each.
year.
The bill would become effective
July /. 1929. No sinking fund would
be provided for bonds issued after
that date, the bonds being retired
only by serial payments as they be-
come due.
Under Walsman'S administration,
the school city is entering into a
program of retrenchment, with the
intent that ultimately bond issues
will be necessary only for extraordi-
nary programs, such as new nigh
schools. All elementary buildings
would be financed directly through
tax levieS.
Under the old system of issuing
large bond issues, the entire prin-
cipal becoming due in one year
twenty or thirty years later, the city
is forced to pay go cents interest on
every 81 Of bonds.
Cuts Interest Cost
BY providing shorter maturity
dates, extended serially over several
years, the interest cost is reduced
materially. This method has been
adopted by Walsman.
after careful study of sinking
funds in Indiana and other states,
Walsman said, II am of the opinion
that the sinking fund idea is i'm
practical. It sets up a large sum OF
money against which dishonest
official could make drafts for some
time without detection, and also
boards the taxpayers money, OBJ
tanning small interest, when the tax
payer could be using the money
until the actual maturity date.
Issuance of bonds for elementary
buildings should be no more neces-
sary in Indianapolis than would be
issuing bonds by villages and small!
towns to equip one room OF a
school"