[article from The Nevada School Journal (1909)]

 

NEVADA'S SCHOOL REVENUE SYSTEM

Do We Need Changes?

By FRANK R. WILLIAMS, Regent of University of Nevada.

            WHEN Nevada was admitted to the Union it received from the Federal Government a grant of land amounting to about 4,000,000 acres, for educational purposes. This land consisted of the 16th and 36th sections of each township, mineral lands excepted. This was the plan then pursued by Congress in providing educational endowments for western States, and it worked very well in prairie States like Kansas and Nebraska. In our own State, however, these designated sections so often fell upon barren uplands and deserts, that very little of it was salable. In view of these peculiar conditions, Congress then granted, in lieu thereof, half as much land, or 2,000,000 acres, with the privilege that the State might select it anywhere within the public domain, mineral lands as before being excepted.

Sale of Lands and Revenue Therefrom

            It was required that all lands be sold at $1.25 per acre. This plan proved much more satisfactory, and the last of the 2,000,000 acres was sold about four years ago. In some eases, the land was bought outright, for cash, but the greater part was sold for 20 per cent cash, and the balance due in 25 y ears, with interest at six per cent.

            At first; the time was shorter, and the rate of interest higher, but the terms of these contracts were afterward made more liberal by legislati7e action and are now as above stated. The purchaser has the privilege, at any time before the expiration of 25 years, of paying the balance due to the State, and receiving a patent to the land. Quite a number of contracts are closed

NEVADA SCHOOL JOURNAL       9

in this way each year. Occasionally, the contractor fails to pay the interest when it falls due, in which case the land reverts to the State. There are about 90,000 acres of such reverted lands, and it is the policy of the State to resell them, for the exclusive benefit, as before, of the School Fund.

More Land for the Schools

            In general, these reverted lands are inferior in quality, and there is less demand for them. It has been suggested that Congress could, with propriety, allow the State to select another 90,000 acres in lieu of these rejected lands.

            Since Nevada has received but half as much land, in proportion to its area, as other western States, the legislature, in 1907, memorialized Congress to grant another 2,000,000 acres, upon similar terms. Congress has taken no action, however, and the present policy of conservation makes the granting of this request extremely improbable.

Amount of Endowment—Income

The proceeds from sales of school lands, amounting, in cash and deferred payments to about $3,000,000, with small additions from court fines, escheated estates, etc., constitute our endowment, or irreducable School Fund. According to our State Constitution, this money can be invested in nothing but State or United States bonds, and the earnings are used in supporting our schools.

            At present our investments in United States bonds yield not more than two per cent, a large block of Massachusetts bonds about 3 per cent, some Idaho bonds nearly 4 per cent, while various sums loaned to the General Fund of our State treasury are earning 4 per cent. Those deferred land payments, drawing six per cent interest, are really better for revenue than the money itself, but since they will be paid up in a few years, some means must be found for investing the money. As both State and United States bonds yield rather low returns, and but few of them are on the market, it has been proposed to amend our Constitution so that this money may be invested, under rigid restrictions, in city or county bonds of any State.

Additional School Funds

            In addition to the income from this endowment, the State sets aside at the close of each year, one half of the unexpended money in the State Library Fund, and levies a direct tax of six cents per $100, all of which is apportioned twice each year to the various counties of the State. An Emergency Fund is also maintained, with which to aid newly organized school districts, during the first year. The different counties are required to levy a tax of at least 15 cents per $100 for school purposes, and school districts are required, when necessary to make local levies sufficient_ to maintain their schools for six months. Often school districts vote, voluntarily, to make further levies for their educational needs.

Maintenance of Schools

            From these sources of revenue, our schools have been maintained since Nevada became a State. While some alterations now seem advisable, to ineet changing conditions, this system has proven well fitted to the unusual and trying conditions of the past. When one recalls how the pioneers hail to establish a school system with meagre revenues, uncertain industries, a constantly shifting population, and, later, to have these difficulties intensified by a paralysis of industry and a steady decline in wealth and population for a quarter of a century, with all its attendant heartsickness and almost despair, we begin to realize how great is the honor due them. Not only did they maintain our school system, but, likewise our other State institutions, in unsullied honor and respectability, even though simplified and economized to the

10        NEVADA SCHOOL JOURNAL

last degree; and they finally brought our State to its present proud position of financial independence absolutely free from debt. If we prove as competent and as faithful in maintaining our institutions as they were in establishing them, we need not fear the judgment of posterity.

Rates of Taxation

            In the past, Nevada has had to endure very heavy taxation. The present State rate of 60 cents per $100 may seem heavy, itself, yet but a few years ago it was $1.25, and county rates averaged fully 50 per cent more than they are today. At one time the town of Bunkerville, a Latter Day Saint settlement in Lincoln County, voluntarily voted upon itself a local school tax of nearly $10 per $100, and paid it without a murmer, in addition to the high State and county levies.

            While the recent reductions are most welcome, our rates for State and county purposes are still higher than those of most States, and should be further reduced. Since Nevada, with its present scant population and limited wealth, must maintain practically all the governmental departments of a State of 1,000,000 people, it logically follows that, as we grow, the rates of taxation will become lighter. The expense of maintaining our State and county governments will increase, but not in proportion to our wealth and population.

State School Tax

            Of the present 60-cent State levy, six cents is for the Distributive School Fund. The money raised in this way is for distribution to the different counties of the State, and is apportioned with reference to the number of children in each. On the other hand, the 15-cent county levy is apportioned within the county in which it is collected, a rich county with few school children, like Elko, raising a much larger sum per school child than a county with a relatively large school population such as Storey, Nye, or even Washoe.

            Since both the State and county school levy is collected upon every piece of property iu the State, it doesn't make a particle of difference to its owner, from a financial standpoint, whether it is paid into the State or County Treasury. The basic principle of our free school system being that the State considers itself obligated to provide educational facilities for all its children, regardless of their condition in life, or the location of their homes, wouldn't it be better for the State to levy nearly all of these direct taxes, so that all our children may be benefited equally? In accordance with this policy, I would suggest that the next legislature add ten cents to our State school tax, and (Tenet 10 cents from the levies which the counties are now required to make, both county and district being permitted, as now, to make higher local levies, if they so desire. In this connection I may mention that our present method of distributing the State money is not always fair in its results, out these defects can be readily remedied by legislative action.

School Laws

            Our school laws provide that a certain small percentage of school money be set aside yearly to maintain school libraries. It doesn't amount to enough to buy many hooks, and, since the State maintains a large and complete Min., in Carson, it might be a good plan to allow the teachers to send to this library for books and then return them, after they have been read, the school paying transportation charges each way out of this school library fund. The recent reductions in. express charges in Nevada would help make this plan a success. Any damage done to the books could be readily recouped by with holding library money from the offending district.

Equitable Apportionment of Funds

            In my judgment the Nevada schools are not just now in dire need of more revenue. What is most required is a more equitable apportionment of these

NEVADA SCHOOL JOURNAL       11

revenues. In the future, however, more direct taxation will be necessary. At present our endowment earnings furnish a large portion of our school money. As the school population increases, and the earnings from this endowment remain stationary or slightly decrease, for the reason above mentioned, they will meet a constantly decreasing portion of our educational expenses. The development of our common school system presents a somewhat different problem from those of other State institutions, such as the University, Insane Asylum, Orphan's Home, or State Prison. They are highly centralized institutions, and since they are already complete in all departments, an increase in numbers does not mean a proportionate increase in expense. For instance, our State University could receive a hundred more students without need of much additional money. Since our future development promises to be largely agricultural, with its tendency toward small schools, our common school system will not tend so much toward centralization.

            This principle in economics has been manifested by our constantly lowering State and county tax rates, except for school purposes, during the past eight years of growth. In a somewhat lesser degree, rates will continue downward for years to come. Thus, while the rates of taxation are being reduced, the State school levy can be gradually increased, and our common schools, although handicapped by the isolation peculiar to this intermountain region, will be enabled to impart a truly cultural and practical education.