the State of New York lie primarily in the direction of federal and local economies rather than in state economies. Your committee realizes that substantial progress is being made in the direction of more economical state administration, but we wish to make clear the limited possibilities of reducing in any marked degree the general tax burden unless the improvement reaches beyond merely state administration. If all the functions of the state government were completely abolished, the reduction in the total per capita taxes would be in the neighborhood of but 11 per cent.

The direct tax burden.- An examination of the taxes levied on property in this state, the so-called "direct taxes," makes it clear that no one unit of local government within the State of New York is more responsible than any other for the gradual increase in the cost of government in this state.

The aggregate taxes levied upon property from 1910 to 1920 are shown in detail in Table 3. This aggregate levy is made up of the taxes levied and collected through the local tax machinery for the support of city government, schools, county government, town government, village government, and state government. In order that the comparative increases in the tax burden imposed upon each one of these governmental units may be made clear, the data are presented in Graph 2. In the graph as here presented an increase of 10 per cent in village taxes shows the same upward turn of the line as does a 10 per cent increase for taxes levied for city purposes. Taxes levied for state purposes have been omitted from this chart inasmuch as they are discussed in greater detail later in this chapter and inasmuch as direct state tax levies are resorted to only for the purpose of balancing the budget forming so small a portion of the state revenues as to give a false impression when placed in comparison with the local taxes levied.

Comparisons with increases in population and assessed values.- From 1910 to 1920 the growth in population in the state was roughly 1,270,000, an increase of 14 per cent. During the same period the full value of taxable real property plus the assessed value of personal property of the state increased about 45 per cent. The total direct taxes levied on property increased 88 per cent. In other words costs of government have been advanc

Millions of Dollars (Log. Scale)

200

GRAPH 2

AGGREGATE DIRECT PROPERTY TAXES LEVIED IN STATE OF NEW YORK, 19101920, FOR CITIES, SCHOOLS, COUNTIES, TOWNS AND VILLAGES

150

100

50

For City Government

For Schools

ing much faster than population or the tax base. This fact is emphasized by the chart on page 30. The figures for each curve are presented on a percentage basis, 1910 equalling 100 per cent. In this chart the full value of taxable real estate plus the value of taxable personal property is labelled "tax base" and "taxes " represent aggregate direct property taxes levied for all purposes within the State.

The increase of public debts.-During the period 1911 to 1920 the net debts of cities, counties, towns, villages and school districts in the State of New York increased in round numbers from $897,000,000 to $1,560,000,000, an increase of 74 per cent. The figures for each year are shown in Table 4.

Here again the increase has been much faster than the increase of assessed values or population. The increase has also exceeded the increase of the direct tax burden which, during the same nineyear period, increased but 56 per cent. In computing the debts of the various units of local government in the State of New York both the bonded and the temporary debts have been included, while sinking funds have been deducted so that the "net debt" represents the net funded plus the temporary debts of all units of local government. It proved impossible to procure satisfactory figures for 1910.

The increase in the true tax rate. The tax rates levied throughout the State are, of course, influenced not only by the tax

50

Percent

150

GRAPH 3

RELATIVE INCREASE OF DIRECT TAXES, TAX BASE AND POPULATION IN NEW

YORK STATE, 1910-1920.

1910=100%

200

1910

1912 1913 1914

1915

1916 1917 1918

1919 1920

levies but by the accuracy of assessment.

In communities in which property is assessed on a 50 per cent basis, the tax rate is twice as high for the same tax burden as it would have been if the property had been assessed at its full value. To secure accurate figures as to the increase of the true tax rate in the State of New York during the past ten years, it is necessary to find what the average tax rate would have been, provided real estate had been assessed at full value throughout the State each year for the ten-year period. On the basis of the equalization rates adopted by the State Board of Equalization annually, it was found possible to secure a fairly dependable figure for the full value of real property including special franchises. To this was added the assessed value of taxable personal property, and on this total base a tax rate was computed sufficient to produce the aggregate taxes levied. An allowance has been made in this computation for the fact that certain personal property, though taxable for local purposes, is not taxable for State purposes.* resulting figure is the true average tax rate for the entire State; that is, it is what the average rate would have been had real property been assessed on a 100 per cent basis. This computation produces the following table:

TABLE 5

TRUE AVERAGE PROPERTY TAX RATE, 1910-1920

The