FINANCING THE CAPITAL REQUIREMENTS 271

long way toward preventing the state from having an
accumulated deficiency of any size in the future. In outlining
 such a plan, it should be recognized that over a period
of time, a certain per capita expenditure for penal, eleemosynary,
 and other institutions will be necessary. Although
there will be variations in annual capital expenditures for
these purposes, the development of such a plan should lessen
the possibility of having to finance an excessive outlay in any
one year or during a short period, since the plan should
provide for sufficient income to meet the ordinary needs of
the state for these purposes.
It should not be assumed that a bond issue would necessarily
 involve a definite departure from the pay-as-yougo
 principle in financing capital needs other than for
highways. On the contrary, the pay-as-you-go policy may
be desirable in the long run, though it may not be applicable
 to a situation such as that under consideration.
Also, regardless of whether the state desires to continue on
a pay-as-you-go basis or to return to it as soon as the
present bond financing is completed, it does not follow that
the capital needs of the state can always be met satisfactorily
 in the future without resort to borrowing. Rapid
changes of a social and economic nature often cause an increase
 in institutional needs that cannot be foreseen. When
such is the case and it is recognized that the need is a real
one, strict adherence to a non-borrowing policy may only
mean a postponement of the capital outlays until conditions
have become almost intolerable.
The present instance is a good example of the inadequacies
 of financing capital improvements out of current
revenues, to the exclusion of receipts from borrowing. It
has been shown that on a per capita basis Missouri’s expenditures
 for institutional needs have been exceedingly low.
The constitutional limitations make it impossible to borrow
considerable sums for such needs, the assumption being that
they will be cared for out of current revenues. The construction
 of a new governor’s mansion, which has been
needed for many years, and of a needed administrative office
building has also been deferred because of such limitations.
There is a sharp contrast between the rapid development