It is to be expected that under such a system there should be the greatest diversity among the powers granted to various municipalities. In respect to the property subject to taxation, however, the practice was fairly uniform. During the early part of the period, it was not usual to designate specifically all property subject to taxation for municipal purposes; with but one exception, the charters granted during these early years specified that only the town lots lying within the corporate limits "without reference to the value of houses or other improvements" should be made the basis for the levy of taxes. The exception is the Mt. Carmel charter of 1825 which designated that the tax should be laid on both "the real property in such town and on personal property owned by persons living in such town."82 Somewhat later in the period it became customary to declare "real estate" taxable, without further defining the term. In 1837 Chicago was granted a city charter which authorized the common council to levy a tax upon "real" or "personal estate." There are scattered examples of similar grants of power, as in 1835 (Mt. Carmel), and 1840 (Carmi).83 During the same year charters were also granted to the city of Alton and the town of Ottawa, which finally designated that all property should be used as the basis for the levy.84 Taxes were to be levied in the case of Ottawa, "upon all real estate and personal property," and in the case of Alton upon the "real and personal property within the limits of said city." About the same time a similar charter was given to Galena.85 The levy of a municipal tax usually exempted the property within the corporate limits from any county tax. So it would seem that, except in such scattered cases as those mentioned above, the general property tax, strictly defined, did not exist in the municipalities of Illinois during this 82L. 1824-25, p. 72. 83L. 1836-37, p. 50. Real estate was made taxable by the general law of 1831, by the Chicago charter of 1835 and the Lower Alton amendment of 1835. L. 1834-5, pp. 172, 210; L. 1839-40, p. 70. 84L. Sp. Sess. 1837, pp. 17, 96. 85 Incorp. L., 1836-37, p. 16. early period. How this condition was reconciled with the provision of the state constitution requiring the general property tax is not evident; the question appears not to have been raised. The maximum rates which were specified in these early charters varied from one-fourth of one per cent to four per cent, upon the value of the property designated for taxation. Most of the acts, and particularly those passed by the later legislature set the rate at one-half of one per cent. 86 87 As in the case of the counties, power was sometimes granted to municipalities to levy rates for special purposes. Thus by a law of 1821, the trustees of the town of Alton were permitted to levy a tax on all town lots not exceeding seventy-five cents per lot per annum for the support of schools. In 1837 Alton was again empowered to levy a school tax.88 By this act the council was authorized to assess upon the real estate of the city the sums necessary to purchase lots and erect buildings, and to assess upon personal property a tax sufficient to raise the necessary sums for the support of the schools. The rate was not to exceed one-fourth of one per cent and the receipts were to constitute a fund to be used exclusively for the support of the common schools. 8 89 A spirit of rivalry often rose between towns desiring to be designated as the county seat and to secure the lo 86 The following list of references to charters granted, grouped according to the tax rates specified, will give more specific information on this point: One-fourth of one per cent-L. 1835-6, p. 180. One-half of one per cent-L. 1823, p. 142; L. 1824-5, pp. 22, 75. L. 1834-5, pp. 204, 214; L. 1836-7, p. 50; L. Sp. Sess. 1837, pp. 17, 102. One per cent-L. 1819, p. 249; L. 1834-5, p. 210; L. Sp. Sess. 1837, pp. 31, 96. One and one-half per cent-L. 1824-5, p. 72. Two per cent-L. 1819, pp. 48, 259, 305; L. 1820-21, p. 160. Three per cent-L. 1819, p. 368; L. 1820-21, p. 176. Four per cent-L. Sp. Sess. 1837, p. 94 (Springfield). 87 L. 1820-21, p. 39. 88 L. Sp. Sess. 1837, p. 17. 89Cf. L. 1836-37, p. 50. cation special inducements were frequently offered. Towns would sometimes submit to special taxation to raise money for donations to the counties. Thus in 1837, Beardstown was given power to collect a six per cent tax on all real estate in the town for the purpose of raising a sum of ten thousand dollars to secure the county seat of Cass County." The municipalities had other sources of revenue, such as those from special assessments and from licenses, but undoubtedly the major portion of their income was from the taxes authorized by acts like those referred to above. These taxes, although not strictly general property taxes, were for the most part similar to them in their nature; and even before the end of the period there were a few cases of what might in a strict sense, be called general property taxes. Summary. Thus the years between 1809 and 1838 formed a period of considerable legislative activity. The general system carried over from the Territory of Indiana had first to be adjusted to the more primitive conditions existing in the Territory of Illinois; and then, as the state grew, particular problems had to be met as they arose. The property subject to taxation changed very little, due, of course, to the fact that from the beginning practically all property was taxed and that the forms of property did not change materially during those years. Since the chief form of wealth was land, the land tax was the backbone of the revenue system. What little personal property was in the state was made subject to taxation, the local communities depending entirely upon the income from this class of property during the early years. The land tax was shared by the state with the local communities in varying proportions, after 1819 the local communities taking a larger and larger part until they finally were receiving two-thirds of the revenue from the general land tax. Compared with those levied today, the rates during this period were very low, although at the end of the period 90L. Sp. Sess. 1837, p. 95. they were considerably higher than they had been at the beginning. Had they been very high, such assessment methods as those used would probably have been impossible, in spite of the ease with which the predominating type of property loaned itself to assessment. Frequent changes were made in the details of assessment and collection. It is true that the general scheme of valuing lands by grouping them roughly into classes according to quality persisted throughout this period; but the composition of the groups was changed a number of times. The assessments were made both with and without the aid of oath requirements. Part of the time very heavy penalties were prescribed for fraud in listing property for taxation; and, again, for a time there were no penalties at all in such cases. Changes were also frequently made in the regulation for redeeming property sold to enforce collection. The condition of affairs as a whole during this period can best be described by saying that, although the principle of the general property tax was prescribed in the state constitution drawn up in 1818, the period was primarily one of experimentation. The system was adjusting itself; the details were not fixed; plans were being tried out and discarded. Much of the action was haphazard; it was mere groping. Fortunately the economic and fiscal conditions were such as to make possible this formative period; the experiments were not too expensive. Had the responsibilities and strains, which came a few years later, been laid upon the financial system at this time, without the opportunity for experimental legislation and for observation of the weak points of the system in vogue, the results could scarcely have been other than disastrous. CHAPTER IV. EFFICIENCY OF THE TAX SYSTEM Fiscal Results In the vault in the office of the state treasurer in the capitol at Springfield is carefully preserved a plain, wooden box, scarcely more than a foot long; this box is the receptacle in which the state funds were kept during the early years of the state's history. As it rests today, tucked away on one of the shelves in the massive vault which has succeeded it, an interesting contrast is presented of the importance of the financial affairs of the state at that time and at present. For the amounts involved in the early financial transactions were indeed trifling. Exact statistics, are, in some cases, hard to obtain. Thus the sums raised by taxation for local purposes are almost entirely wanting for the years before 1838;1 and it is only after 1820 that complete statistics are available for the receipts from taxation for state purposes. However, some fragmentary information exists concerning the total revenues of the state from all sources for earlier years. For example, it is known that the total amount expended from the state treasury 1According to the reports of the state auditor and treasurer, the following amounts were transmitted to the counties as their share in the nonresident land tax. They were entitled to share in this tax by a law which was in force for two years, 1821 to 1823. Jan. 1, 1823 to Nov. 30, 1824....... Two years ending Nov. 30, 1828... $ 808.12 1,617.96 358.13 From special reports made by the auditor at the request of the legislature in 1835, it appears that the revenue to the counties from the land tax-in 1835 to $26,451.49. (S. J., 9 G. A., 2 Sess., p. 64.) An estimate of $31,374.89 is made of the probable income of the counties from this source in 1836. These statistics do not include the taxes which may have been levied on personal property for county purposes. |