Henderson daily dispatch. (Henderson, N.C.) 1914-1995, 1936-11-19
BOND ISSUESMUST
PASSAT ELECTION
New Constitutional Amend
ment Gives People Voice
In Debt Boost

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Chapel Hill, Nov. 19-Future city
bond issues in North Carolina, even
for purposes held to be necessary
expenses" under the Constitution, will
have to be submitted to a popular
vote If the total sum borrowed during
the fiscal year exceeds two-thirds of
the amount by which the outstanding
debt of the unit was reduced during
the preceding fiscal year.
The exact effect of the new deSt
limitation amendment passed by the
voters November 3, of course. depends
upon the construction which the SUI
preme Court places upon it, but this
was the concensus of opinion express
ed at a meeting of the Municipal FL
nance Officers Division of The In
stitute of Government here.
Twenty city finance officers attend
ed and took part in the discussion.
New officers were elected as follows:
Louis Fisher, Wilmington Commits
sioner of Finance, President; L. L.
Ledbetter, Charlotte treasurer, and
r. E. Currence. Asheville accounting
officer, vice-president; and T. N.
Grice Of the Institute staff, secretary.
w. - A~s@oSCAA4A1S1 SECRETARY VI Lu0
Local Government Commission ex-
pressed the opinion that the limita-
ton on debts incurred during 1936-37
would be figured on the basis of net
reductions in outstanding indebted
ness during the period from July /,
1888 to June &c. 1896. The group
agreed that the amendment would go
into effect Immediately after the
Governor certifies the results of the
election to the Secretary of State fol-
lowing the official canvass by the
State Board Of Elections, which will
be held on November "a.
The finance officers concluded that
payments into sinking funds would
not constitute reductions in outstand-
ing debt. However, If units bonds
are held in it's sinking fund and are
cancelled, this would constitute a re-
auction which could re considered in
calculating the amount which the unit
could borrow for necessary expenses
without vote. It was AFRO agreed
that future borrowing in anticipation
OF revenes would be limited to so per
cent OF tax revenues due and payable
during the fiscal year and remaining
unpaid at the time of the borrowing,
The only exceptions or situations
in which the amendment nermits a
city to borrow beyond the stipulated
limits are: Cd to fund or refund a
valid existing debt; (2) to supply a.
casual deficit; and 90 to suppress
riots, instructions or invasions. The
meeting was of the opinion that "cas-
ual deficit" would include all budget
operations except In cases where there
was wilful over-estimation of rev.
enues in order to circumvent the pro-
vision of the Amendment.
The point arose, but went unsettled
as to whether the term casual de-
ficit" would cover a deficit arising
from emergency expenses due to un-
foreSeeable conditions such as fire.
flood, cyclone or other catastrophe.
1t the General Assembly claesifies
property for taxation as authorized bv
the classification amendment. the Of
11cerS expressed the hope that It
would provide for valuing different
classes of property at different per-
centages OF their true worth, which
would circumvent the fcudgetary diff
ficulties that would be involved if
each class of property carried a diff
ferent tax rate.
Plans were laid for the DEVELOPMENT
OF a clearing house of financial infor-
nation through the Institute of Gov
eminent which would furnish the Of
Ulcers comparative information on the
cost of various local functions and
services in other units and give them
some yardstick with which to check
the efficiency and economy of their
own administration. T.. M. Grice of
The Institute staff was delegated to
head up this work.