Whereas the 95th legislature proposed a further constitutional amendment to the people by the provisions of chapter 127 of the resolves of 1951 which would add to article IX, section 15 of said constitution the following exemption: "Long term rental agreements not exceeding 40 years under contracts with the Maine School Building Authority shall not be debts or liabilities within the provisions of this article," which amendment was favorably voted upon by the people, and by proclamation of the Governor became part of article IX, section 15 of the constitution aforesaid, on September 26, 1951; Whereas the 96th legislature proposed a constitutional amendment to the people by the provisions of chapter 78 of the resolves of 1953 (the proposed amendment attached hereto and marked "Exhibit B"), which had the same effect as the proposal found in chapter 119 of the resolves of 1951, being worded exactly the same, but which failed to include the exemption for indebtedness incurred under contracts with the Maine School Building Authority which was previously incorporated in the constitution of Maine, article IX, section 15, as aforesaid, which amendment was favorably voted upon by the people and proclaimed by the Governor on September 21, 1954, to be article IX, section 15 of the constitution of Maine; Now, therefore, I, Edmund S. Muskie, Governor of Maine, respectfully request an answer to the following questions: I. Did the acceptance of the amendment of article IX, section 15, of the constitution of Maine proposed in chapter 78 of the resolves of 1953 effectively remove from article IX, section 15, the exemption added by the people voting on the amendment proposed in chapter 127 of the resolves of 1951? II. If the answer to question I is in the affirmative, then the further question arises: Does the removal from the constitution of the exemption of debts incurred under contracts with the Maine School Building Authority require that those debts which were exempt from municipal indebtedness under article IX, section 15, when incurred, must now be counted as part of the municipal debt of any municipality which has contracted with said authority? Respectfully submitted. EXHIBIT A EDMUND S. MUSKIE, Constitution, article IX, section 15, repealed and replaced. Section 15 of article IX of the constitution, as amended, is hereby repealed and the following enacted in place thereof: "Section 15. No city or town shall hereafter create any debt or liability, which singly, or in the aggregate with previous debts or liabilities, shall exceed 71⁄2 percent of the last regular valuation of said city or town; Provided, however, that the adoption of this article shall not be construed as applying to any fund received in trust by said city or town, nor to any loan for the purpose of renewing existing loans or for war, or to temporary loans to be paid out of money raised by taxation during the year in which they are made." EXHIBIT B Constitution, article IX, section 15, repealed and replaced. Section 15 of article IX of the constitution, as amended, is hereby repealed and the following enacted in place thereof: "Section 15. No city or town shall hereafter create any debt or liability, which singly, or in the aggregate with previous debts or liabilities, shall exceed 72 percent of the last regular valuation of said city or town: Provided, however, that the adoption of this article shall not be construed as applying to any fund received in trust by said city or town, nor to any loan for the purpose of renewing existing loans or for war, or to temporary loans to be paid out of money raised by taxation, during the year in which they are made." ANSWER OF THE JUSTICES To the Honorable EDMUND S. MUSKIE, GOVERNOR OF MAINE. The undersigned justices of the supreme judicial court, having examined the facts stated in your communication of January 20, 1955, are unanimously of the opinion that on September 26, 1951, the constitution of Maine, article IX, section 15 as then amended and then proclaimed by the Governor, fixed the limitation upon municipal indebtedness at 5 percent of the valuation, except that contracts with the Maine School Building Authority for long-term rental agreements not exceeding 40 years, and certain other stated exceptions relating to trusts and loans, should not be debts or liabilities within the provisions of the article. On September 21, 1954, by amendment to said article IX, section 15, favorably voted upon by the people and on that date proclaimed by the Governor, the whole of said section 15 as previously amended was repealed, and by new provision the municipal debt limit was increased to 72 percent of the valuation. There was no provision in this amendment of September 21, 1954, relative to contracts with the Maine School Building Authority. The provision relating to exemptions from debt limit of contracts with the Maine School Building Authority was repealed, and it was not readopted, as were previous provisions relating to trust funds, renewal of certain loans, war loans, and temporary loans. Any contracts between municipalities and the Maine School Building Authority entered into between September 26, 1951, and September 21, 1954, within the terms of the provision adopted in 1951, would not be affected by the amendment proclaimed on September 21, 1954. The debts and liabilities of a municipality incurred under contracts with the Maine School Building Authority, which were exempt from municipal indebtedness when incurred, are not a part of the municipal debt of the municipality within the limitation of the constitution. We, therefore, answer the questions presented as follows: Question I. Did the acceptance of the amendment of article IX, section 15, of the constitution of Maine proposed in chapter 78 of the Resolves of 1953 effectively remove from article IX, section 15, the exemption added by the people voting on the amendment proposed in chapter 127 of the Resolves of 1951? Answer to question I: We answer in the affirmative. Question II. If the answer to question I is in the affirmative, then the further question arises: Does the removal from the constitution of the exemption of debts incurred under contracts with the Maine School Building Authority require that those debts which were exempt from municipal indebtedness under article IX, section 15, when incurred, must now be counted as part of the municipal debt of any municipality which has contracted with said Authority? Answer to question II: We answer in the negative. Respectfully submitted. RAYMOND FELLOWS. ROBERT B. WILLIAMSON. Dated at Bangor, Maine, this 2d day of February 1955. PROPOSED ACT TO RESTORE EXEMPTION OF MAINE SCHOOL BUILDING LOANS FROM MUNICIPAL CONSTITUTIONAL DEBT LIMIT Resolve, Proposing an amendment to the constitution to exempt rental agreements with the Maine School Building Authority from the limitation of municipal indebtedness. Constitutional amendment: Resolved, Two-thirds of each branch of the legislature concurring, that the following amendment to the constitution of this State be proposed: Constitution, article IX, section 15, amended. Section 15 of article IX of the constitution, as amended, is hereby further amended by adding at the end thereof a new sentence, to read as follows: "Long-term rental agreements not exceeding 40 years under contracts with the Maine School Building Authority shall not be debts or liabilities within the provisions of this article." Form of question and date when amendment shall be voted upon : Resolved, That the aldermen of cities, the selectmen of towns, and the assessors of the several plantations of this State are hereby empowered and directed to notify the inhabitants of their respective cities, towns, and plantations to meet in the manner prescribed by law for calling and holding biennial meeings of said inhabitants for the election of senators and representatives at a special statewide election to be held on September 12, 1955, to give in their votes upon the amendment proposed in the foregoing resolution, and the question shall be: "Shall the constitution be amended as proposed by a resolution of the legislature to exempt rental agreements with the Maine School Building Authority from the limitations of municipal indebtedness?" And the inhabitants of said cities, towns, and plantations shall vote by ballot on said question, those in favor of the amendment voting "Yes" upon their ballots and those opposed to the amendment voting "No" upon their ballots, and the ballots shall be received, sorted, counted, and declared in open ward, town, and plantation meetings and returns made to the office of the secretary of state in the same manner as votes for governor and members of the legislature, and the governor and council shall count the same, and if it shall appear that a majority of the inhabitants voting on the question are in favor of the amendment, the governor shall forthwith make known the fact by his proclamation, and the amendment shall thereupon, as of the date of said proclamation, become a part of the constitution. Secretary of state shall prepare ballots: Resolved, That the secretary of state shall prepare and furnish to the several cities, towns, and plantations ballots and blank returns in conformity with the foregoing resolve, accompanied by a copy thereof. Senator PAYNE. If I may speak 1 or 2 minutes extemporaneously in connection with this proposal, I would like to say, because of the experience I personally have had with this form of a program in trying to work out something that could be of benefit to my own State, I am very seriously concerned with the provisions for funds for aid to communities that cannot meet their school-construction load because they are above or close to their debt limit or precluded from going into the bond market because of their overall financial picture. I feel, for that reason, that perhaps title III should be changed to some extent, incorporating the best of features of the Hill bill or the Ives bill or a combination of those bills to start to get this job under way in those communities that are definitely hard hit. I am not convinced, however, that in every area of this country, either at the local level, or at the county level, where counties play an important part in handling these matters, or at the State level, that there has been sufficient intiative demonstrated to take care of some of these school needs locally. There have been too many other things placed ahead of school needs, and I think some of our school needs should come first. I am convinced that the school authority program can work and can work very satisfactorily in connection with those communities that can meet reasonable tests. I believe either at the State or county level there can be established authorities that can implement a great deal of the work that must be done to get school construction underway. If there just is not ability in the local community to meet the need because of property values or taxable income and the State or county cannot come to its aid in sufficient quantity to enable the construction of needed schools, then I believe it is the duty and responsibility of the Federal Government to step into the picture and to help those communities because education is definitely a national problem. I may mention that I have with me Mr. Frank Hoy, who served as chairman of the State board of education while I was Governor, who served then as the representative of the State board of education on the Maine School Building Authority, and who, at the present time, is serving as vice chairman of the board of education, and likewise, is representing the board on the Maine School Building Authority. He has been associated with the Authority from its inception right up to the present moment, and he can answer many of the technical questions that I probably would be unable to do. Chairman HILL. Any questions, gentlemen? Senator SMITH. I would like to ask our distinguished colleague-I am glad to see you here with us-about the time factors. The estimate has been made that setting up these authorities will take a large amount of time and hold up going ahead with school construction. I would like to have your judgment as to whether you think putting these authorities into existence and getting them working would be as expeditious as straight grants-in-aid direct to the States. Senator PAYNE. I do not profess to be an expert. I am not too familiar with the laws of all of the States of this nation. I can only speak from our own experience. We had two specific cases that we relied on in working to set up this Authority. Those were the authorities that had previously been set up in Pennsylvania and Georgia, the only two States in this Nation that have undertaken this work. I think I am correct in saying that after we had been able to get the law passed it was a relatively short period of time before we were actually underway in constructing schools up there in the State. Senator SMITH. Did you have to call a special session of your legislature? Senator PAYNE. No, sir; it was handled in the regular session. Senator SMITH. Your legislature was in session then when that was passed? Senator PAYNE. That is right. Senator SMITH. Did the legislation involve a lot of debate? Senator PAYNE. Very little. It was a unanimous vote when it went through. Senator SMITH. That shows your distinguished leadership, I gather. Senator PAYNE. No; I would consider it a very intelligent group of legislators. Senator SMITH. One more question, and then I will yield to my colleagues here. The whole theory of the administration bill is that the primary responsibility for the educational program rests with the States. Senator PAYNE. May I disagree with you there, sir. Senator SMITH. Yes; I wish you would. Senator PAYNE. I think the primary responsibility rests with the towns, the local community. Senator SMITH. I had in mind the States as distinguished from the Federal Government. I have talked with the President about this. He feels that unless we challenge the States to work out their programs internally, their bond issues, and whatnot, there will be a danger that they will say, "Wait and see what the Federal Government does," and we might get caught with a continuing outlay in the form of grants to take care of these school-construction activities. We are all agreed that we don't want the Federal Government to be mixed up in the administration of our schools. The States want to keep them. The construction of school buildings is an urgent one, and we are very much concerned with the lack of schoolrooms, some 300,000. Senator PAYNE. And they are increasing. Senator SMITH. They are increasing, although I am told the rate of construction is almost keeping pace with the annual extra demand.. I don't know whether that is well established or not. It is the backlog that we have to build up the emergency construction for, especially in areas of the country that are not as able as the other areas of the country to do it themselves. We are seeking the most expeditious way to do it. I am profoundly interested in title II, which is a controversial part of this bill, and especially the fact that there are four States-you mention Pennsylvania, Georgia, and Maine, but there is also Indiana. Senator PAYNE. Indiana has since come in. Senator SMITH. These school authorities were set up for the purpose of by-passing constitutional limitations on the powers of States to borrow money, or some other limitation or amount that is legalized for the school end of the budget. Did Maine have any such problem when they passed this? Did they have to get around some constitutional limitation or something of that sort? Senator PAYNE. Of course, on borrowing capacity, we did have to get around it on that. In other words, we did have, at that time, a State constitutional provision which prohibited any city or town from borrowing in excess of 5 percent of its assessed valuation, and that was amended at the last session by constitutional amendment, which raised that from 5 to 712 percent. There are many communities-again, you get into a localized situation that probably occurs countrywide where many communities assess on one basic of valuation and another community, maybe next door, will assess on another basis of valuation. So you get a definite hodgepodge, except where States have adopted a so-called tax equalization system that has more or less placed values on a fair and equitable basis across the board for the purpose of determining what their true valuation is. Senator SMITH. That would be helpful if we did form that method of assessment all over the country and get nearer a true value than we have today in many places. Let me just add one word. It has been urged by some of my friends here in the Senate and some on the Democratic side, very prominent members on the Democratic side of the aisle, that they do not think we should have Federal aid at all because they take the position that every State, if it tightened its belt and gave the proper priority to the education of the young people, which is to my mind the No. 1 priority on the homefront-it has nothing to do with the foreign situation-if every State would recognize that and move into the local communities and say, "This is the first thing we have to do," that they probably could work it out and take care of their bonding, and so forth, except in the few extreme cases, like our title III contemplates in this bill, where there is not enough leeway there to take care of that. Do you share the view that a great many States could meet this problem if they went after it seriously and made it the number one priority on the home budget front? Senator PAYNE. Let me say this. I think Maine is an example where they have taken some real initiative on their own level to show a definite, concerted interest in this problem of providing for the needs of education, whether it be in the school-building field or in the general educational system. It is the State's job to do this first. I |