The people's voice. [volume] (Helena, Mont.) 1939-1969, 1955-02-18

anyone to buy their bonds wit
est on them could sell the bono
interest.
Eisenhower thinks Congress shout,
have $3.50 million a year ready TO
such purchases.
This wouldn't mean anything +,
most school districts. They're nov
paying only 2A -21a% interest. o,
course, if interest rates rise-anc
the Federal Reserve Board and the
Treasury Department control them
then schools will pay higher interest
on bonds they issue. Some additional
districts, crowded to the wall, might
then find the federal government
their best market for school building
bonds.
The Presidents second idea is more
complicated. 1t depends largely on
what your state legislature does.
1t will need to set up a state
school building agency. This agen-
cy's job will be to issue bonds, sell
them to investors, use the money to
build schools, and rent the build
ings to those districts where they're
located. With this rent, the agency
can retire its bonds and paw in
terest.
Four states have these agencies
now-Georgia, Maine, Indiana, and
Pennsylvania. The other A do not.
All but two state legislatures meet
this year, so it's conceivable that you
could get such an agency established.
But these state agencies can't help
every school district-or even most
If them. The state agency goes to
work and builds a school only where
he district has exhausted it's bond
ng power.
Most state constitutions limit the
axes that a district can levy on the
of its citizens even though
most citizens in a district might be
Wiling to pay higher taxes to improve
chools. When district reaches the
init of its power to tax for more
chools,. it can't issue more bonds.
md here the state agency could step
n.
When it does, the local school dis
riot faces another tough problem. 1T
as to pay rent on the building. And |
is similarly limited, by most state |
as to the amount of |
axes it can levy for operation-for
.achers' salaries, maintenance, books,
nd, here now, rent.
Chances are, if it's up to its limit
on bonding power, it's also near it's
limit on operating funds. So to pay
rent on state-constructed buildings,
it may have to cut teachers sal
aries, now horribly low, or elimi-
nate such things as kindergarten,
athletics, and such classes as art,
music, and physical education.
Eisenhower proposes that the fed
al government come into this pic
re through the back door. He sees
at the state school building agency,
wing no tax power of its own, would
I'VE difficulty selling its bonds. He
els that the agency will need some
fund. He proposes that
e federal and state governments
an the agency enough money to pay
e first years principal and interest
yments on the bonds it issues.
The President is willing for the
deral government to loan 500 of
S fund. He believes Congress
ould set aside $3.50 million for this
rpose.
if a school district can't
ne bonds at all and if it can't af-
ID to lease buildings from a state
ency. then Eisenhower proposes
It the federal government give d.
t aid.
He didn't spell out the terms of
h aid, except to say that the state
st certify that the district is too
IF either to build or rent. He be-
res Congress would need to appro-
ate 5000 million during the next
ee years for this aid. n
Except for this aid-$67 million
year-the Presidents proposal I
ont add any revenue to what
hool districts already have.
Congress gave the plan a cool re-
ton. Democratic majority leaders
It think it's anything nearly ade-
tie. They've talked in terms of y