Smyrna times., 1930-11-12
PLAN TO HAVE STATE TAKE
AND PAY OFF SCHOOL BONDS
GOV. BUCK TO SUBMIT PLAN
TO COMING LEGISLATURE
Act, If Adopted, Would Reduce
Taxes in Some Districts, Aside
From Paying for Construction

To have the State assume all
school bonds in the State, amount
ing to S2,500,000, pay off the re-
manning debt of the State amount
ing to about 81, 100000 and to pay
for all new schools in the State out
of State funds, instead of compell-
ing the districts to share in the
| cost, is the plan of Governor c..
Douglass Buck. This plan would
relieve the city of Wilmington of
bonds for schools in the excess of
81 100000. In order for the State
to assume responsibility for the
school bonds it will be necessary
for the Legislature to pass a law
making such provision and provid-
ing means for the bonds to be
taken care of. The highway
bonds which make up most of the
State debt can be cared for by the
Governor and other officials as
they become due. This is provid-
ed for in the State Highway Law.
When the school bonds were issu-
ed by the various districts no pro-
vision was made for redeeming
them and they must run to ma
turity unless the State is able to
purchase them from time to time.
The plan of Governor Buck is for
the Legislature to pass an act pro-
viding that the State assume re-
sponsibility for these bonds. This
fund would be invested by a COM
mission to be appointed and the
proceeds used to pay interest on
the bonds and pay the bonds them
selves at maturity. As the bonds
pay different rates or interest and
some rates are high it is doubtful
if the State could invest funds at
sufficient rate of interest to take
care of the interest on the bonds.
Redemption Funds Would be Made
In order to secure investments
which would meet interest on the
bonds and also provided a fund for
their redemption at maturity it
would be necessary to take about
S3,000,000 out of the tate funds to
be set aside for the purpose. The
plan to be proposed by Governor
Buck is to take S3,0O0.OOO from
the school fund surplus and place
this money in the hands of a COM
mission to invest and later redeem
the bonds. His idea for this COM
mission is to have the commission
consist of some of the State offic-
ers and the president of the Farm
ers Bank of Delaware. The bank
president would be permanent
member of the commission. 1t is
believed that this will be possible
because by July /, 1888, the School
Fund will have a surplus of So
100000. On account of the size of
this estimated surplus Governor
Buck feels that it will not only be
possible to care for the school
bonds already issued but for the
State to pay the entire cost of all
schools constructed in the State.
In some school districts this ac-
tion would reduce the school taxes
by 80 cents on the S100. In other
cases the amounts would be lower.
81 100000 Road Bonds TO be Paid
1t is the intention of the Gov
ernor to pay off S1,0G0,000 addi-
tional in highway bonds the first
of the year. This is possible be-
cause the law makes provision for
redemption by the governor and
other State officers. Incidentally
the Highway Act is the only one
which provides for the redemption
of bonds before maturity. At the
time Governor Buck assumed Of
fee there were S12,50O,OOO out
standing highway bonds. OF this
amount S7,785, 900 have been paid
Highway bonds issued by the
counties have been taken care of
by the state for more than two
years. Each Legislature however,
is compelled to pass an appropria-
ton to take care of the bonds.