334 MISC. PUBLICATION 218, U. S. DEPT. OF AGRICULTURE 
Whatever the weaknesses of State review, one is forced to recog- 
nize that in few cases is there effective local review. With the present 
machinery local taxpayers have been without either a means of obtain- 
ing the information on which to form judicious opinion or the means 
for making their will effective. 
DEBT 
The need for State control over local debt is more imperative and 
more generally recognized than that for State review of local budgets. 
State control over local debt has thus long found expression in con- 
stitutional and statutory limitations, and local officers are accustomed 
to restrictions in this field. When discretionary power is lodged with 
a State administrative officer or board, there is room for more flexi- 
bility than if a limit is fixed by the constitution or statutes. This 
can be either an element of strength or of weakness, depending on the 
vision and courage of the administrative agency. 
Most States impose restrictions on the amount of debt which the 
local units may incur. In 26 States the limit is fixed by the con- 
stitution and ranges from 2 to 10 percent of the assessed value of 
property. Thus the limit for counties in New York and Nebraska 
is 10 percent, and in Kentucky, Oregon, Utah, and Wyoming, 2 per- 
cent. The average is about 5 percent. In some States the constitu- 
tional limit may be exceeded by popular vote. For instance, counties 
in Arizona are limited to 4 percent of the assessed value, but this may 
be increased to 10 percent by vote of the property taxpayers. Several 
State constitutions specify the maximum period within which a 
county debt must be paid, and others enumerate the purposes for 
which bonds may be issued. Seventeen State constitutions make a 
levy for debt-retirement purposes mandatory, and in a majority of 
States some sort of popular approval of bond issues is required. 
Statutory provisions may impose restrictions similar or additional to 
those imposed in the State constitution (119, pp. 417-418.) 
The regulation of debt by constitutional provision has not been 
altogether satisfactory. A rigid limitation has sometimes prevented a 
needed and desirable capital improvement or has led to the circum- 
vention of the constitution by devious and dangerous routes. On the 
other hand, the ease with which legislative validation could be secured 
for an illegal act has made legislative control ineffective. Instead of 
inflexible provision in either the State constitutions or the statutes, 
students of public finance have come to favor an administrative con- 
trol over the creation and redemption of local debt, and a number of 
States have set up agencies for this purpose. 
Administrative State supervision over local debt may, as in the 
case of supervision over budgets, consist only of a scrutiny to insure 
compliance with the law, or it may include the exercise of discretionary 
power. When a State board is clothed with this larger grant of power 
it passes on the expediency of proposed improvements, and, if it is 
satisfied that the improvement is warranted, it passes on the amount of 
the bond issue, the interest rate, and the terms of repayment. 
Massachusetts offers the best example of the first type of control. 
The commissioner of corporations and taxation must examine local 
bond and note issues to insure their coniormity with the laws which 
pertain to the incurrence of indebtedness. These laws prescribe the 
