Scanned image of the page. Keyboard directions: use + to zoom in, - to zoom out, arrow keys to pan inside the viewer.

Page Options

Download this Issue


Something wrong?

Something wrong with this page? Report problem.

Rights / Permissions

This collection, digitized in collaboration with the Michigan Daily and the Board for Student Publications, contains materials that are protected by copyright law. Access to these materials is provided for non-profit educational and research purposes. If you use an item from this collection, it is your responsibility to consider the work's copyright status and obtain any required permission.

July 27, 1933 - Image 3

Resource type:
Michigan Daily, 1933-07-27

Disclaimer: Computer generated plain text may have errors. Read more about this.



Educators Take Up Finances
Of School And Its Relation To
Comnmun1ity A Meetings Close

(Continued from Page 1)
Michigan increased more or less au-
tonatically until 1930, with the grw-
ing proceeds of the utility taxes,
schol expenditures increased even
faster," he said. "Rising educational
standards were the chief cause.
"In the period from 1923 to 19.0,
for example, expenditures increased
about 55 per cent to a peak of $134,-
000,000, while school population was
increasing 22 per cent. The large
proportion of this peak figure of
school costs due to capital outlay
($21,400,000) and to debt charges on
past borrowings ($17,000,000) indi-
cates the important part played by
plant expansion and improvement in
this rapid increase.
"After taking account of aid from
the state, new loans and minor reve-
nue sources, Michigan school dis-
tricts in 1930 balanced their budgets
by a local school tax of $79,360,000,-
the principal resource at their corn-
m'and," Professor Caverly said.
"By 1932," he continued, "despite
some reductions in levies, the mount-
ing delinquency in the collection of
di property taxes had become a se-
rious obstacle to this balancing of
the school budget. In earlier years
non-collection of current tax levies
has usually been just about offset
by collections of back taxes. In 1932,
however, the total collection includ-
ing back taxes, was but some 80 per
cent of the levy; while the collections
of the current year will probably be
between 60 per cent and 65 per cent."
"In individual districts, delinquency
has been a still more serious factor,"
Professor Caverly stated. "This fail-
ure in the basic resource of the
schools has precipitated the financial
crisis in education as, similarly, in
all branches of governmental activ-
ity, he said.
"Following upon the breakdown in
property tax collections," he contin-
ued, "came the threat of further re-
duced tax resources as a result of
the constitutional amendment of last
fall limiting the total levy of taxes
on property to fifteen mills for oper-
ating purposes.~
"Had this limitation been enforced
literally, the threat would have ma-
terialized. Fortunately, the decisio
of thie Michigan supreme Court in
the Pontiac case exempting chartered
muiciplities - all 'cities and vl--
laes -fromi the limitation has
greatly relieved the pressure.
"axes Jevied for city and village
purposes need not be included with-
in the maximum 15 mills. It is not
too much to say that the decision
averted a complete financial break-
down" of local government in the
tii the light of the Pontiac deci-
sion, it was possible to draft the
necessary enforcing legislation, the
Prpperty Tax Limitation, or Alloca-
tion Act, in such manner as to ac-
cord considerable protection to the
interests of the schools, Professor-
Caverly said. "This law, which inci-
dentally established no limits on tax
rates in itself, but merely provides
machinery for allocating the consti-
tutionally limited rate, guarantees
school districts a minimum alloca-
tion of four mills for operating pur-
poses and gives school interest ade-'
quate representation on c o u n t y
boards set up to administer the allo-
"The districts can, of course, obtain
as much more than four mills as
their needs, in comparison with the
needs of other' branches of govern-
ment, may warrant.
"in cities and villages schools
should be ale to levy, on the aver-
ago, as much as hitherto as far as
constitutonal power is concerned.
The real limit will be the amount
of taxes that property owners can.
affor to pay.
"In rural 4istricts, where the town-
ship government must be provided

for, the pressure will be greater, and
some decrease in the average rate'
of school tax levies is probable. On
the whole, however, the limitation;
amendment is far less restrictive than'
it seemed, before a liberal interpreta-
tion was placed upon it by the court,"
Professor Caverly said.
"Nevertheless by the first of this
year it was apparent that education
in Michigan was facing a serious fis-
cal' emergency," he said.
"Shortly after the Legislature con-
vened, therefore, a comprehensivet
and ambitious program was initiated
by educatioiial interests in the State,
designed-to bring the financial power
of the State government to the ies-
cue of local school districts Thisl
program called for a Legislative ap-
propriation of the round sum of $25,-
000,000 as additional State aid to
schools, over and above the estab-
lished Primary Fund; together with
a new plan for the apportionment
of State educational funds.
The estimates upon which this fig-
ure was based were roughly as fol.
lows. It was maintained that school
operating costs in 1933-1934 could
not reasonably be reduced below
$69,475,000, a figure derived from the
eta ted'school population of the
coming year and the per capita oner-

mary Fund were placed at $18,000,-
000. The property tax was estimated
at $25,000,000, assuming a five-mill
levy on a State valuation of $6,00,-
000,000 less 16 2-3 per cent delin-
quency. The gap between revenues
and expenditures, so estimated, is
$26,475,000, giving rise to the con-
clusion that additional aid of at least
$25,000,000 would be required to per-
m iit even very economical peration
throughout the school year," Profes-
sor Caverly said.
"Estimates of tax developments in
Michigan during the next months are
necessarily subject to wide possible
"Assessed valuations, rates, collec-
tions, payments on back taxes, all
these are subject to unforeseeable
economic and legal changes. Never-
theless it seeis probable that this
estimate, in the lightof present co-
ditions at least, is definitely on the
pessimistic side. Specifically, the
five-mill figure for average operating
levies is too low.
"Certainly there will be no legal
obstacle to an average school levy
higher than this. If, for example, the
average turns out to be seven mills
instead of five, the shortage between
revenues and expenditures will be
decreased by some $10,000,000. Fur-
thermore collection of back taxes has
been left entirely out of account.
"While the relief accorded to de-
linquent payers during the last ses-
sion will materially slow up back tax
collection, some revenues can reason-
ably be anticipated from that source.
Despite these considerations it still
stands out that without added State
aid in 1934 local schools in Michigan
will be unable to function," he went
"The plea of education was urged
upon the State, vigorously if not too
discretely, at a time when the State
also was facing a serious financial
and fiscal problem.
"There was a current deficit a
serious State general fund of some-
thing like $8,000,000. The limitation
amendment, and other considera-
tiois, made it desirable to eliminate
the State property tax levy, which
would leave a gap in the State's
resources of $23,000,000.
"Welfare expenditures from the
Statetreasury were in prospect, in
amount of $12,000,000. These facts,
in themselves, created a grave situ-
"The solution sought involved the
enactment of a quite general sales
tax at an unusually high rate, de-
signed to bring in upwards of $35,-
000,000, which sum, with minor rev-
enue sources, might serve to meet
these requirement, after all possible
economies had been effected," Pro-
fessor Caverly said.
"This program was, in large meas-
ure, carried through. The property
tax was substantially eliminated; the
sales tax was passed, though in re-
stricted form designed to produce
$31,700,000; the welfare appropriation
was passed; other appropriations
were cut to fit the anticipated reve-
nues. From this situation the schools
emerged with their bill, the Sias-
Thatcher Act, passed indeed, but se-
riously emasculated," he went on.
The act as passed appropriates
$15,000,000, instead of the $5,000,000
for 'whih the schoolestimate of
needs called, he said.
"The payment of this sum to the
schools is in effect contingent upon
collections from the sales tax run-
ning far in excess of the estimates.
State appropriations taking priority
over the school appropriation will
absorb all but about $2,500,000 of the
anticipated revenues of the State.
The schools are to receive only such
part of their appropriation from the
salse tax fund as may remain after
prior obligations are met.

"The new act sets up two separate
funds, in addition to the old Primary
School Interest Fund, namely, the
Primary Supplement Fund and the
School Equalization Fund. The in-
terrelationships between the three
funds are complex. The workability
of the distribution scheme thus cre-
ated should not be prejudged. But it
seems clear that, with the decreased
sums of money involved, the equali-
zation fund, which is to be 10 per
cent of the sum of the other two, will
be too small to accomplish its essen-
tial purpose of aiding those districts
which really need the aid. The bulk+
of the resources will still be. distrib-
uted on the old census basis. Thin;
phase of the act was not tampered
with by the Legislature, except in-
sofar as its effectiveness is decreased

by the reduction in the amounts
available," Professor Caverly said.
"In general the schools seem to
have emerged from the legislative
session with a gracious gesture, in-
stead of real money. The gesture will
probably not pay the bills.
"Against the gloomy prospect which
thus emerges may be set one or- two
more hopeful considerations. As sug-
gested, the needs of the schools for
state assistance during the co'ming
year do not appear as great as was
thought earlylast spring. How great
they will be depends very materially
on the willingness and ability of
property owners to tax themselves
and pay their taxes for the support
of their local educational establish-
"IJmproving economic conditions
will have a large bearing in this
question. Moreover, the sales tax
promises to produce well above the
"Again the prospects of economic
recovery, with increasing turnover of
goods and rising prices, which will
expend the collections of the tax, are
are basis of the expectation. .In de-
fault of these elements of relief, the
State will be faced with the alterna-
tive of a special session of the legis-
lature, convened to amplify the school
program or a year of curtailed school-
ing and avicious policy in the treat-
ment of school personnel.
"It may be hoped that at any rate
the last of these prospects may not
materialize," Professor Caverly con-
Following Dr. Caverly on the morn-
ing program, Professor Theisen's ad-
dress continued the series. The
speaker pointed out that the prob-
lem with which he is concerned is
of interest both from the legislative
and from the administrative point
of view.
"Under the present zeal for re-
ducing taxes," he said, "legislators
are likely to give serious considera-
tion to any measures designed to re-
duce taxes, so long as they repre-
sent what they believe their consti-
tutents desire. All too frequently
proposed tax reforms are urged by
groups whose primary concern is to
shift the burden of governmental
support to the shoulders of others.
School people have been too little
concerned about what citizens know
about their schools and what it costs
to run them."
Professor Theisen declared that
the average citizen needs to be in-
formed as to the cost of education
in terms of what he can afford to
pay. The schools are accused of
spending 35sto 50 per cent of the
total taxes, he said, when 20 per
cent would be nearer the truth. When
parents are made to realize this fact
they will think twice before reducing
school expenditure out of propor-
tion to the reduced cost of living,
according to the speaker.
"We must be wary of reform in
the method of taxation until we
know just what the effect on schools
will be," Professor Theisen said.
"Concerns which create government-
al burdens by attracting workers and
their families to a community and
then seek to escape their just share
of the burden by shutting down or
moving to more profitable localities
the moment profits cease to roll in,
must be made to pay their fair share'
of the cost. Neither an income nor
a sales tax is competent to meet this
situation. For that reason the tax
on general property should not 'be
entirely removed."
Claims of inability to pay for edu-
cation may be more apparent than
real, according to the speaker. When
people are willing to spend as much
for paved roads as they do for edu-
cation, or are willing to spend several
times as much for services or com-
modities for which there is little
real necessity, he said, they have lit-
tle cause to grow excited over edu-
cational costs.

"Regardless of the ability of the
public to support education, however,
the schools should seize the oppor-
tunity to make such readjustments
in the scope of the educational pro-
gram as the facts warrant. If they
have been extravagent or inefficient
in any sense they should endeavor to
make the necessary corrections. The
friends of education, however, should
not pass up any opportunities to
other directions that might be made
point out possible economies inf
which would serve to reduce the bur-
den of the taxpayer and with less
harm to society. Eliminations of du-
plications in local governments,
honesty in the enforcement of taxing
laws, and proper restrictions on
banks to prevent misuse of public
and private funds would leave thous-
ands of persons more able and will-
ing to pay taxes for the education
of their children," he declared.
In the afternoon session, Professor
Moehlman opened the addresses with
a talk on "Is Fiscal Independence
For Schools Necessary?"
Accentuated by the depression,
NOW Hundreds c

Sues Ier Manager
w n n
Irene Ware, screen actressdnd
former Folles girl, complained t
Ch arles R. Kenney, Jr, had with-
drawn $71,981 from her bank ac-
count. He was charged with grand
there has been within the past three
years an increasing amount of dis-
cussion -concerning the need for a
complete overhauling of our tradi-
tional patchwork system of taxa-
tion and for a serious re-study of
administrative concepts and prac-
tices, he said.
The subject is not new. Fnmance
and tax specialists pointed out the
inherent weaknesses before 1910. The
twelfth conference of the National
Tax Association offered a concrete
program for the solution of the num-
erous problems arising from the con-
tinued use of a tax program design-
ed for a long since outgrown rural
culture," he said.
"However, popular thoughit on mat-
ters of taxation is extremely con-
servative. There is an unusually wide
gap between theory and practice in
thie field. Some authorities even con-
tend that there is no visible connec-
tion between laboratory theories of
taxation and the political practice
of taxation."c
The program for tax reform was
said to have, within the past five
governmental activities and agencies
and an increasing emphasis has been
progressively placed on administra-
tive change as well as on taxation
re form.
"Political scientists, particularly
specialists in local and state govern-X
ment, have given ety,erjncreasing at-
tention to the idea of centralization
of activity and increase m size of
local autonomous units," Professor
Moehlman said,
"In this survey the traditionaly
independent school district has re-
ceived its share of attention. Move-s
ments within education and in the
more specialized field of political sci-
ence have all emphasized 'the need
for change," he went on.
"Much good work in the field oft
education has already been accom-
plished in states that examined the
problem as an entirety and planned
accordingly. Many poor results havel
also been achieved by lack of recog-
nition of the fundamental sociologi-
cal factors that are every bit as im-
portant and vital to organized pub-
lic activity as pure political theory,"
Professor Moehlman said.m
"We are confronted today by two
sets of problems:" he said. (1) an
antiquated and unfair system of tax-

ation that throws a very unequals
burden on the owners of real prop-e
erty and (2) an inadequate and un-u
satisfactory system of local govern-v
ment, political and educational, evol-
ved progressively by a piling up and'
duplicating process since the pioneer
"Running through both of .these
problems is the thread of fiscal in-
dependence common to most of these
numerous local units, and the ter-
minal result is a multiplicity of du-
plicating tax units, admittedly an
administrative extravagance from
any point of view.
Careful; study of the numnber of
independent tax units and the suc-
cessive tapping of the same sources
of revenue for different public pur-
poses has centered the thought of
-Genuine Old Town
For Rent 9 A.M. to 12 P.M.
Foot of Cedar Street

many specialists in political scie
and public finance on the indepe
ent school district, Professor Mo
man said.
"Much has been said and wri
about the need for eliminating t
various' local authorities and c
tralizing tax power in the hand
fewer units. The outcome oft
movement to date has been an
creasing discussion on the part
educators and specialists in gov
ment and finance outside of edu
tion," he said.
"At the outset both sides may a
on two phases of the problem.7
educator believes that the cur:
system of small fiscally inadeq
school districts has little to' c
mend it. Differences do arise
specting the particular forms of
ganization to replace them.
"He naturally leans to the socio
ical as well as the educationally
sirable organization while the pu
finance specialist generally proi
on the slender a'd inadequate 1
of prely statistical assumptions
"The educator also agrees that
present system of taxation is in
quate and stands wholeheartedly
hind intelligent reform in this fie
Professor Moehlman said.
"Vital differences of viewp
arise in the third problem-fiscal
dependence," he continued. "Loo
at this question broadly, it is prim
ily a difference between the th
of general public income and
theory of segregated or earmar
public income; the concept of pu
education as a purely essential s
function, as it has unanimously b
declared by every superior cour
the forty-eight states, and me
as a local activity.
"The educator considers thef
of activity in which he is engage
a long-span movement that requ
9 to 15 years for the completion
the institutional task of educatin
"If this time factor is to be c
sidered seriously, it must mean
promulgation and protection o
fiscal policy insuring constancyf
relative freedom during this peri
he said.
"It requires distinct separa
from the political vagaries of pa
sari activity. It requires an ex
tive organization of techniciansr
specialists to carry out the plan
requires preparation and merit
the selection- and direction of ess
tial personnel.
"In providing for early educati
organization our forbears prob
had soething of this need in i
fo the theory of freedom from pc
tical control, the maintenance
the people of close popular con
and interest, supplemented by fi
independence have combined to p
duce one of the most unusual sc
systems in the world-universal e
cation under the direct control of
people," he said.
"The people, as a state, make t
generalized educational policies a
as local quasi-corporations or sc
districts, carry out these policies.
"As a result the public scho
with all of the defects inheren
any functioning, public activity hi
remained free on the whole f
entangling political alliances and
tradition of service and the pro
sional executive has been so well
veloped that within recent years
political scientists have been clam
ing for the same type of execu
organization in municipal and s
activity, not always recognizing
pioneer work of the schools, togei
with the Federal civil service, of
veloping the tradition and prac
of essential professionalization of
rather complicated administra
practices of government," Profe
Moehlman stated.
"In those centers where sch
and municipalities have been fo
into class relationships and
schools curtailed in fiscal indepe
ence," he said, "some of the m

unhealthy political conditionso
"New York and Chidago furn
the most striking examples. Thes
Reduced Prices On
All Permanents

nce brilliant exception appears to be De- ly followed in the par l reorgar
nd- troit, where an unusual educational ization of local units of political go
ehl- tradition and a dymmnic public opin- ernment, much of our present 4iff
ion on public education have co m- culty might be solved," Profess
tten bined to produce an excellent system Moehlman concluded,
hese of schools. .FISHER IS LAST SPEAKER
en- "However, in those smaller inde- Dr. Fisher, the last speaker on tl
s of pendent districts surrounding Detroit, program, chose as his topic "TI
this such as Groose Pointe, Hamtramck, Co-ordination of Various Communit
in- Highland Park, and Wyandotte, Sim- Agencies."
of ilarly excellent schools have been de- enseo
ern veope by fisall * ndeendntHe spoke of community projec
rn- veloped byi fiscally* independent of parent teacher associations? wd
ca- boards of education and at no greater ren t blcheo cubs, a
proportional expense," he said. and teachers clubs. lr.Fisher sag
gree "Careful study of traditional prac- he chose these glroups becasthe
The tice and actual results leads the edu- were typicalrofpMichgaii cmmunit
rent cator to the belief that no good and life and active organizations ofcon
uate much harm may result from the sqee n c hgan. of tol
om- elimination of fiscal independence influence and function of each
re- and the subsequent closer affiliation above groups.
or- with the professional political ma-
chine..in conclusion Dr. Fisher sid con
log- "The danger is too great to dare munity relations needs study an
evaluation in the light 'of rece
de- for the sake of a laboratory theory," happenings. Effort should be tov
iblic he said, "and there is no inherent the creation of a more wholesom
e s value in centralized organization. happier community life-ndot tow
b se "It possesses much that is danger- a re-establishment of things as the
ous. The educator is also aware of were. "Those interested in commUm
the the need for reduction in the num- ity life should remember:
ade- ber of tax units and is therfore ac- '1.That each one of the diffeembi
be- tively in favor of larger local ad- organizations mentioned, can'th dao
ld," ministrative units, whether county useless duplication.
or counties in combination," he said. ere isdnoialoc
oint "Cetra edcatinalautoriy ."2 There is no allocation of pi
oint "Central educational authority jects carried on in communities I
in- within the county, legally capable different organizations-Thle Fedi'
king of equalizing all the wealth within ation of Women's Clubs may do
nar- the county, would increase greatly same work in one town that U
eory current tax levying collection and P. T.A.does in another.
the tax-use efficiency," Professor Moehl- "3 Representatives of differi
ked man said.
iblic "It would materially affect certain community organizations shot
tate concepts relating to state aid. The meet frequently for discussion.
een vounty plan would reduce approxi- "4 These discussions should ilea
t in nately the number of school taxing satisfactory conclusions about ce
rely authorities approximately 90 per tain community problems.
;ent. Fiscal independence, however, "5 Representatives should not I
field should be completed by these new concerned with the winning of a
d as independent 10 c a 1 administrative guments, but with coming to a :i'
tires units. tive solution, which is not a con
n of "If this same plan were successful- promise," he concluded,
g an
f a .
id,," C-s o o o, ? cc o co<Z=X ==
.It i
du- BeginiTODAY
ols, Finaln-Up
rar Of All Remaining
the W
the Annex
tive Drastic Reductions Bring
ttate =Peo ea SavnsForWo e
the nrea a ng rm n
ther Who Ac t Quickly!
the, a
r d>th e

snd- Here are values galore! White, pastel and printed
pra- frocks for daytime, sport or formal wear.
nish Group I Group II
Seersucker Robes and Pajamas,
o $1.95 Values . ..
ipuses, Organdy, Dotted Swiss
Values to$1.l9.......,... . .C9
Skirts, Remaining Stock of
Skirts, Values to $2.95
13 13--Main S~'
Summer rock,
We have taken 75 of our dresses valued up to $19.75 and
y divided them into two groups for quick disposal. There are
OW" prints, sheers, whites, pastels, knits from which to choose
Group I Group I
$50 8.70
We Have a Few COATS Left
o $19.75 Values $7.00 $29.75 Values $1"1.00
9 White and Pastels, Values to $16.75 . . . $6.77



Phone 2-2813
302 South State Street

1" "3

t 0'

All Students Meet to
Island Lake
Nightly except Monday
Gentremen 40c 9 Ladies 35c
The crowds are coming fiom

)f Volumes of
3rly priced frorr
..iL .1t . L .. .

Recent Light Fiction, NOW
1 $2.00 to $2.50 r
. -. - .. ... - ;- -:- I ff

Back to Top

© 2022 Regents of the University of Michigan