The Ely miner. [volume] (Ely, Minn.) 1895-1986, 1931-01-23
ROAD BONDS WILL
NOT RAISE TAXES
SMALL PART OF LICENSE AND
GAS TAX WILL PAY BOTH
PRINCIPAL AND INTERESTING
TAX INCREASE PROMISED.

Although there Is more sentiment for
highway bond issue this year than
ever before, there are some people who
fear that it may increase taxes. This
fear, according to C. NJ Babcock, is
unwarranted Motor vehicle registra-
ton and gasoline consumption could
drop to one fifth of the 1890 figure, he
says, and there would still be enough
to pay interest and principal and all
outstanding bonds, and any bonds
which might be issued in 1881 or 1892
without any need of general tax levy
That any such drop viii occur is in
conceivable.
The Constitution, it is true, contains
provision that if motor vehicle taxes
are inadequate to pay principal and in
terest on bonds, the Legislature may
levy a general tax to make up the
difference Those who drafted the
trunk highway amendment were con-
vinced that this provision would never
be put to use, but inserted it to make
the bonds more saleable and insure
low interest rates.
Of the refunding bonds authorized
by the 1929 Legislature, to take care OF
the large block of county bonds due in
1880, 1881, and 1892, $4,000, 900 were
issued in 1880 and s4,585 ,528 remain to
be issued. Since not to exceed $4,000
600 of bonds can be issued in one year,
this means that not more than S15,414.-
472 of new bonds can be authorized and
issued in 1881 and 1882. Of the S34,-
771,167 of county bonds assumed by
the state, 1854. oil will be outstanding
and maturing after 1892, but these
county bonds and the refund;ng bonds,
which are serial bonds. are we'll dis
tributed. The largest sum due in any
one year is $2,042 900 in 1912.
The Constitution provides that motor
vehicle taxes shall go first into the
trunk highway sinking fund, and
money not needed to pay interest and
principal on bonds transferred to the
trunk highway fund for construction
and maintenance. If serial bonds are
authorized, no sinking fund need be
retained. If they are made to mature
all at one time, the legislature could
if it wished, supplement- the Constitu-
tional provision by fixing the amount
which shall be set aside each year for
sinking fund purposes. In any event
the average sum needed annually to
pay iterest and principal on the re-
naming county bonds, refundine
bonds, and any new bonds which might
be authorized, would be considerably
less than one-third of the motor vehicle
tax, without touching the gas tax in
come.
For the first time since the state OF
Minnesota took over the maintenance
Of the 1000 mile trunk highway sys-
tenn in 1921, there has been a SUBJ
stantial drop in the annual main
tenance bill. Starting with S2,6O8,5 37
in 1921, disbursements of the mainten-
ance division grew steadily until they
reached s4,667 ,309 in 1929 In 1880 the
figure was cut to s4,164,3 89, and this
total included the expense of the high
way patrol and larger portion of the
betterments, such as bitunlinous treat
ments, than in the average year.
Growth of traffic, which was nearly
three times as great in 1890 as in 1921,
has neceSSitated steady increase in
upkeep of costs on the unpaved routes.
Routes which were the most expensive
1880 this saving was more than Offset
by growth of tratnc on other routes.
In 1890, however, paving of the routes
carrying much of the heavy traffic had
reached point where it brought about
an actual reduction in maintenance ex-
penditures.
Other factors helped to effect the
saving. Light snow last winter cut the
cost of snow removal. Motorized equip
ment has proven effective and economi-
cal Bituminous treatment has reduced
the need of gravel requirements on
many routes with medium heavy traffic.
The highway patrol has been effective
in enforcing load limitations, and this
has cut the cost of repairing damage
done by excessive loads. Experience
has also shown that at certain times
and under certain conditions, no
amount of maintenance work viii keep
the road IN good condition, and in
such cases the expenditure is held
down to the amount which will be eff
fective- But the biggest factor in cut
ting maintenance costs is the fact that
number of the routes carrying the
heaviest traffic have been paved. II
these routes were not paved, there
would have been a large increase in
stead of a decrease.
While half million saved in main
tenance is a substantial item, it is but
fraction of the savings which paving
brings to road users, according to Mr.
Babcock. On route carrying 1000
or more vehicles a day, the saving In
gasoline, tire wear. repairs and car de-
probation will pay the entire cost OF
the paving in three years, while on
any route carrying 500 vehicles PEI
day, it will pay the interest on the
investment plus liberal allowance fol
depreciation.