Seattle's Schools Were Running on Borrowed Money—and the Bill Was Due

W. H. White, attorney for the board of education, prepared the following statement of the manner in which the debt of the school district was incurred, explaining the merits of the question to be voted on today:

'It is a pertinent question: What is the district and how was it incurred? On November 7, 1888, owing to the necessity for additional school facilities, an election was held in the district, at which the proposition was carried by a vote in favor and fourteen against, and the district was authorized to borrow money and issue bonds. These bonds were purchased, bearing interest at 5 per cent per annum and payable twenty years after date.

'In 1890 the accommodations for teaching the children were insufficient, and the district borrowed money for the purpose of erecting a new building. At that election votes were cast in favor of borrowing the money and four votes against the proposition. The bonds issued under this election amounted to $96,000, payable twenty years after date and bearing 5 per cent interest. The limits of the city were enlarged and lots were sold, and in consequence the Seattle district was required to pay the obligations of the old district.

'The outstanding warrant indebtedness of the district on March 28, 1894, was about $80,000, bearing 10 per cent interest. There is on hand in cash $50,000, which is available only under the law for the current expenses of the district and for paying the interest on the bonded debt. This sum is now being drawn upon to pay in cash the teachers' salaries and other expenses of the district, and with the taxes due on the present levy it is believed it will be sufficient to run the schools on a cash basis until the taxes of next year are due. The number of teachers in the district is 112, and the monthly outlay for salaries, fuel, etc. is about $11,500. This does not include the interest on the bonded indebtedness, which must also be paid out of cash on hand. The number of persons of school age is over 5,000, and they are enrolled as scholars in the schools.

'The amount of delinquent taxes due the district is something over $12,000. The valuation of taxable property in the district in 1891 was $44,411,000, and the limit of indebtedness which the district could contract at that time without a vote of the people was fixed by law. In 1892 the board of directors submitted to the people the proposition that the district buy blocks in Ray View addition, Pitman addition, Queen Anne addition, Pontius addition, and other additions, and whether they should erect a school building on the site selected for $47,500. At that election the people voted in favor of three propositions and directed the building. The total cost was $115,000, for which warrants were drawn and the debt was incurred by a direct vote of the people.

'The value of the buildings at a low valuation is $385,000, and the value of the land belonging to the district, at a low valuation, is $77,000. This, with the cash on hand, makes the assets of the district, while the total debt of the district and the interest on the bonded indebtedness are such that the liabilities and assets are about equal.

'Had the delinquent taxes been paid as the board had a right to expect, they would have exceeded the constitutional limit of indebtedness. Up till the session of the Legislature of 1893 there was no law authorizing an election to be held giving authority to contract a debt in excess of the constitutional limit of 5 per cent on the value of the taxable property in the district. When this limit was reached the only question was whether the district should be forced to repudiate its just obligations or should ask the people to validate the debt.

'The school tax under the new law will amount to over 9 mills on the dollar. While the district would receive something over $100,000 under the state law for school purposes, it would only get about $65,000 of it back. A levy sufficient to continue the schools for ten months in each year would be more than 10 mills for school purposes. This burden is too great to be borne. There are two remedies: either to validate the indebtedness and issue new bonds to pay it, or to cut the school term down from ten months to six months. Mr. White does not think the people are in favor of reducing the school term. No man, woman or child in Seattle favored repudiation.

'As a result of a recent election in Kittitas county, at which the people voted to ratify the indebtedness of that county, the bonds issued under that act, amounting to $45,000, have been sold for a premium of $1,580. From information the board of education has, there is good ground for the opinion that these bonds could be floated at 5 per cent interest and would command a premium.'

Mr. White also called attention to the new law defining the qualifications of voters, under which each male or female person over the age of 21 years, a citizen of the United States, who has resided in the district for thirty days and in the state for one year, is authorized to vote. He urged parents and taxpayers to consider the proposition carefully as a business proposition.