assembly, there was general opinion
591
592
NATIONAL MUNICIPAL REVIEW
[December
that "the schools are hopeless." Most
responsible citizens hooted at the
idea of running for school board or
"getting into that mess."
On the average the Eugene schools
were running behind $150,000 a year
on operating deficits which were cov-
ered with 6 per cent warrants; when-
ever warrants piled too high they were
converted into long term bond obliga-
tions. In the construction program of
1924-26, totaling $351,000, imme-
diate tax increase had been covered
up by issuing deferred payment bonds
to fall due in the "rich thirties."
Voters Approve Extra Taxes
Nevertheless, in the summer of
1927, when it came time to make up
the budget for 1927-28, the school
board found it had to have some
$353,000 for the coming year and
this involved taxes some $56,000 be-
yond the 6 per cent limit. Fortunately
a tough-minded citizen, the late Dr.
Harry Titus, had braved sneers and
been elected to the board in June,
and on the board he found a help-
er-A. R. Gray, a merchant.
The board went to the voters on
September 20 and gained approval.
Then came counter-attack from the
direction of the county assessor; the
vote was thrown out on technicality.
In October another vote was held and
the budget defeated. Then a commit-
tee of leading citizens consented to
"comb the budget," but they refused
to cut more than $10,000 and the
budget went back to the people in
December and was adopted by a slim
margin.
But in the meantime a lot of the
gruesome facts about debt and taxes
were getting an airing. Also it had
become apparent that the real power
in school affairs was not the superin-
tendent but the school clerk and cer-
tain cliques.
In January 1928 Dr. Titus and
Mr. Gray came to the press with
this thought: "The only way we'll
ever get this school mess straightened
out is to clean house."
They were told: "If this school
board will ever make up its own
mind on anything, we'll back you till
Hell freezes over."
House was cleaned forthwith! The
school board brought in Superinten-
dent H. R. Goold from Renton,
Washington, at the unheard of (for
Eugene) salary of $4,500 a year. In
June School Director Gray found
himself indicted by a Lane County
grand jury for alleged corrupt prac-
tices, but the indictment was obvi-
ously spite work and the courts
threw it out. The new superintendent
found himself confronted by one
of his board with fourteen points
for school management, among them:
Every teacher and employee must
sign a pledge not to touch alcohol
or tobacco in or out of school hours.
Any teacher or employee known to
have touched alcohol or tobacco would
be automatically dismissed.
Daily flag salutes and pledges etc.
On the appearance of any school
officer or elder person in any class-
room, all children to be called in-
stantly to stand at attention and re-
main in that posture till told to sit.
Goold went about a tough job with
grim patience until more board
changes could be effected. Without
delay he demonstrated that better
education can be had with less cost.
1944]
BY THEIR OWN BOOTSTRAPS, III
593
He closed two obsolete grade school
units over violent protests, concen-
trated his grades in four modern
buildings. With backing from his
board and his public he began to
meet bond payments when due and
to whittle at warrant debt. The Su-
preme Court of Oregon backed him
on a ruling that due bills and war-
rants of any year must be paid be-
fore "cash on hand" can be trans-
ferred to reduce tax rates.
This should be enough to give a
picture of the method. By 1937,
when Goold went to Tacoma, despite
the depression big reductions had
been made in bonded debt and war-
rant debt, and^ as debt costs were re-
duced, teacher pay and teaching
standards were much improved. Not
a single new building has been built,
but Goold's successor, J. C. Cramer,
carried on the same principle edu-
cation first, brick and stone later!
Schools Among Best
In 1937 the abandoned Geary
School was converted into one of the
most interesting vocational schools
in the United States largely because
of the dynamic leadership of one
Lillian Van Loan. The first three
students got mops, brooms and paint
brushes; from that beginning a work
and learn plan for anybody from 17
to 70 has developed an amazing plant,
one that has trained thousands from
all parts of Oregon for war service,
looks now toward the much bigger
problem of refitting them for post-
war citizenship.
The Eugene High School which
was notorious in 1927 (the whitewash
episode) had become by 1939, under
the leadership of Harry B. Johnson,
"one of the 50 best secondary schools
in the United States," by rating of
an educational commission from
leading universities.
Out of cash savings the Eugene
school board quietly acquired the 70
acres for its new functional high
school project and extensive acreage
around every other school, which in
the light of school census trends
should be permanent.
The school board attracts the best
men and women in the community,
but conspicuous for many years has
been the influence of tall, gaunt,
modest Gil MacLaren, a hardware
merchant who has thought far ahead
of most "educators" on schools and
community life.
In city and county government
the change has not been so spectacu-
lar as in the Eugene schools, but
there has been a tremendous change.
With fixed debt requirements call-
ing for as much as $146,000 a year
as depression hit with its horrible
tax delinquencies county govern-
ment would have been in a very
tough spot but for the large pay-
ments from federal forest land re-
funds and splits of state gas taxes.
Even so, the county government,
after desperate efforts to retrench in
operations, found its actual tax levies
going steadily up as taxable valua-
tions fell because the debt require-
ments could not be escaped. In many
years they were more than 25 per
cent and in some more than 30 per
cent of the county budget.
Lane county "went Democrat"
with the 1932 landslide, but the
county commissioners under Judge
594
NATIONAL MUNICIPAL REVIEW
[December
Fred Fisk (except for one road-build-
ing venture with WPA) proved quite
conservative, declined to be lured in-
to new borrowing by federal grants.
Under the present administration
of County Judge Clint Kurd, the
"get out of debt and stay out"
policy is extremely positive. Like
most county judges in Oregon Clint
is a farmer. With three sons he oper-
ates about 175 acres of good valley
land and produces crops which gross
better than $100,000 a year. Judge
Hurd was the first county leader in
Oregon to brave his voters with
proposals for special tax levies in-
stead of bonds to finance the county's
postwar program. Tilted back in his
chair, he whittles a nubbin of plug
and says: "We've always run the
Hurd farms without borryin' and I
figger you can run the county on
a cash basis."
The Judge himself nearly got licked
in the May primary lots of people
thought him too tough on juveniles
but his postwar levies carried better
than two to one.
City Cleans Up
Central figure in the city of Eu-
gene's war on debt has been Elisha
Large, in the council since 1926 and
mayor since 1932. 'Lish has acquired
the name of "Pinchpenny" and
revels in it. He is a retired merchant,
a very unassuming person, but ex-
tremely positive and even stubborn
in some ways.
Shortly after the school wars which
attracted attention to the debt and
taxes issue, a small start was made
on the city's mess. The city council
in 1929 decided to accept no more
"Bancroft bonds" (special assess-
ment bonds for streets and sewers)
unless promoters laid cash on the line.
In 1932 Mayor Wilder resigned to
look after his own affairs and the
rest of the council asked 'Lish to take
charge. He was the only one who
could afford to serve without pay. He
did, and no city treasury ever had
a more zealous watchdog. Expenses
were cut to the bone and even to the
nerve firemen and policemen got as
little as $80 a month at some pe-
riods. The greatest burden on the
city was the pyramiding default of
Bancroft bonds. By 1933 city and
county were unwilling heirs to hun-
dreds of vacant lots and empty
houses. Efforts to sell brought little
or nothing. In 1934-35 it became
necessary to refund more than
$1,000,000 in Bancroft bonds, but
this time in ten-year serial notes with
payments starting at once.
During the fifteen years Elisha
Large has been mayor debt charges
have absorbed, on the average, 44.7
per cent of each city tax dollar, but
debt payments and sinking fund re-
quirements have been met squarely
when due and the most essential de-
partments have been maintained.
Naturally there has been little
"progress." The city's fine parks have
grown pretty ragged, playgrounds
with some school help have barely
survived, streets and sewers have been
well maintained but no more than
that, police and fire department effi-
ciency has been almost miraculous,
considering.
As the city's debt requirements
have been reduced and as times and
collections have improved, pay of
1944]
595
city employees has been increased
substantially and some new equip-
ment for fire department and other
essentials have been provided. But
debt payment has been foremost in
city policy.
Debts Paid
In the council chamber of the bat-
tered Eugene City Hall is a large
wall chart, the like of which might
be erected in every council chamber
in the country. On it, many years
ago, Mayor Large caused to be
marked up every city debt and the
date when due. Year by year as pay-
ments have been made the word
"Paid" has been stencilled neatly in
the appropriate square.
Mayor Large was re-elected in
1936 and 1940, tokens of confidence
in his thrift, despite the jibes at such
devices as renting a part of the fine
new airport to sheepherders "larg-
est municipal sheepport in the world,"
his delay in building the city swim-
ming pool even after the cash was
voted, his constant efforts to make
schools or county or water board
(municipal utilities) relieve the city
of outlay, however small.
Almost alone Mayor Large stood
out against the manager plan, which
the people adopted May 19, 1944,
and the vote was close. The Mayor
has not yet said whether he will seek
to continue as mayor now that a
manager has been decreed. He con-
tends that he has been "a manager
and without pay."
The cry during the manager cam-
paign, however, was that although
Mayor Large has done a magnificent
job of leading the city out of the
debt wilderness, the time has come
when the city must have something
better than "negative policy."
Not a thing has been done by the
Eugene city government to meet the
many pressing problems of "subur-
ban fringe" (although Mayor Large
was one of the first to compel suburbs
to pay for fire protection by let-
ting Glenwood burn ! ) . Internally the
city government lacks direction, pur-
poseful efficiency.
But the debts have been paid and
thereby the way has been made easy
for postwar, if sound practice can
be maintained.
A few outstanding performers In
this peculiar community drama have
been mentioned, but only a few. To
include them all it would be neces-
sary to name a long list of county,
city and school officials, the hundreds
of school teachers, city police and
firemen, road crews, street crews who
have given amazingly good service
to the employing public for amaz-
ingly low wages. Their loyalty re-
sponded to leadership!
Often we recall Colonel SherrilFs
remark on the transformation of the
Cincinnati Police Department a few
weeks after he became city manager
in that demoralized town. He said:
"Very easy to explain. Most people
would rather do a good job than a
poor one. I merely told the police
that from now on they had only one
boss and one set of orders do your
job! And look and act like a good
policeman!"
It can be accomplished, although
in each community the pattern of
accomplishment will vary with the
people and the personalities.
Tax Rates of American Cities
Salary increases for municipal employees seen as chief
cause of reversal of downward trend during last several
years as rates are cut in only 40 per cent of communities.
By ROSINA K. MOHAUPT
Detroit Bureau of Governmental Research
HPHE trend toward reduction in
* municipal tax rates observed
since the entry of the United States
into World War II has been reversed
in the past year. A comparison of
current tax rates with those of last
year shows an increase of twelve cents
per thousand. Mounting public pay-
roll costs have made it difficult for
most cities to keep expenditures at
the 1943 level. Repeated demands
for salary increases rather than any
pronounced increase in the number
of municipal employees have been
responsible for enlarged payrolls.
For several years the competition
of defense jobs has made municipal
employment relatively unattractive,
but in recent months, civil service
commissions in a number of cities
have reported that they have had
enough applicants for various posi-
tions to result in eligibility lists. If
present salary standards are main-
tained, and positions long vacant are
filled in the next year, payrolls may
rise to even higher levels. Those ci-
ties which have adopted sound cost-
of-living compensation plans have
taken a step in the right direction in
solving one of the most pressing prob-
lems of the present and post-war era.
Only 40 per cent of the 252 cities
reporting in both 1944 and 1943
showed decreases in the adjusted tax
rate as compared with S3 per cent in
last year's study. Thirty-nine per cent
of the cities reported higher tax rates
and 21 per cent reported no change
in tax rate since last year. Cities
in Group III (population 250,000 to
500,000) showed an average decrease
of fourteen cents in adjusted tax
rate in contrast to increases in all
other population groups except cities
between 30,000 and 50,000 popu-
lation which, practically speaking,
showed no change in tax rate (a de-
crease of two cents was actually re-
ported for this group of cities).
TABLE I
ANNUAL CHANGE IN ASSESSED VALUE AND AVERAGE ADJUSTED TAX RATE
OF AMERICAN CITIES
Per Cent of
Change in
Assessment
Average Adjusted
Tax Rate, Amount
of Change*
1943-44
1942-43
1941-42
1940-41
1939-40
1938-39
1937-38
+ '.6
+ 1.5
.1
1.5
.5
+ .8
$+.12
.35
.05
+.02
+.29
+.45
+.65
"Per $1,000 of Assessed Value
596
1944] TAX RATES OF AMERICAN CITIES 597
Over the five year period between tically equally throughout all popu-
1939 and 1944 decreases in tax rates lation groups. However, the average
were reported by all population increase of 3.6 per cent in assessed
groups except II (population between value between 1939 and 1944 was,
500,000 and 1,000,000) and III practically speaking, confined to cities
(population between 250,000 and under 500,000 population. Cities over
500,000). Group II showed an in- 500,000 showed either slight de-
crease of $1.77 in this period and creases or only very small increases
Group III an increase of $.60, but in assessed value,
an average decrease of twelve cents A comparison of the number of
was reported for the 213 cities report- installments in which city taxes are
ing over this five year period. payable seems to indicate a tendency
The average increase in assessed to eliminate, to some extent, pay-
value was 1.1 per cent over the ments in more than four installments.
1943 level and was distributed prac- This is undoubtedly due to the fact
TABLE II
NUMBER OF CITIES SHOWING DECREASES IN ADJUSTED TAX RATE
1943-1944
Population
Group*
Decrease
Increase
No Change
I d
2
2
II
3
5
1
III
12
3
6
IV
18
19
13
V
28
32
13
VP
40
37
18
Total
101
98
53
TABLE III
COMPARISON OF 1943 AND 1944 AVERAGE UNADJUSTED AND
ADJUSTED TAX RATES OF 249 AMERICAN CITIES
Population
Group*
Average Unadjusted Rates
per $1,000 Assessed Value
1944 1943 Increase
Average Adjusted Rates
per $1,000 Assessed Value
1944 1943 Increase
I"
II
III
IV
V
VI C
Total
$38.15
33.60
43.35
38.62
37.74
37.19
38.04
$37.94
33.38
43.46
38.68
37.11
37.17
37.86
$ .21
.22
.11
.06
.63
.02
.18
$29.39
29.36
26.85
28.32
27.54
25.73
27.04
$29.28
28.88
26.99
27.92
27.38
25.75
26.92
$ .11
.48
.14
.40
.16
.02
.12
"Population groups defined by the United States Bureau of the Census as indicated
in tabulation following article.
c Group VI is defined by the Bureau of the Census to include cities between 25,001
and 50,000 population, but in this study, cities under 30,000 population were not
tabulated.
"New York City and Chicago not included. Chicago changed basis of assessment
from 37% to 100%.
598
NATIONAL MUNICIPAL REVIEW
[December
that increased earnings are making
it unnecessary to grant such lenient
terms.
Actual Tax Rates Reported
The tax rates shown in this tabu-
lation are the actual tax rates set
and levied per thousand dollars of
assessed valuation by the various
units of government which derive
any portion of their revenues from
the general property tax. Among
these units are the city, school, coun-
ty and state and numerous special
districts performing special services
financed in part or in whole from
taxes levied on general property. In
the past decade a pronounced ten-
dency has been noticed on the part of
state governments to give up the
general property tax in favor of the
more productive sales and income
taxes as sources of revenue.
The form of this tabulation makes
it impossible to print the individual
rates: of the various special districts.
Instead, these special district rates
have been added under one of the
four general headings: city, school,
county, or state. Common practice
in a majority of the municipalities
determines what heading a particu-
lar special district rate shall be in-
cluded under. The levies of park, li-
brary, relief, sanitary districts, and
water supply districts are included
with the city tax rate, because in a
majority of the cities these functions
are performed by the municipal gov-
ernment. Other special districts are
TABLE IV
FIVE-YEAR COMPARISON OF AVERAGE UNADJUSTED AND
ADJUSTED TAX RATES OF 213 AMERICAN CITIES
Population
Group*
Average Unadjusted Rates
per $1,000 Assessed Value
1944 1939 Decrease
Average Adjusted Rates
per $1,000 Assessed Value
1944 1939 Decrease
I d
II
III
IV
V
VI C
Total
$38.15
33.60
43.35
38.62
37.60
37.46
38.20
$38182
33.07
43.57
39.50
37.75
37.87
38.59
$ .67
+.53
.22
.88
.15
.41
.39
$29.39
29.36
26.85
28.32
27.06
27.51
27.61
$29.51
27.59
26.25
28.94
27.20
27.74
27.73
$ .12
+ 1.77
+ .60
.62
.14
.23
.12
TABLE V
CHANGES IN ASSESSED VALUE OVER ONE- YEAR AND FIVE-YEAR PERIODS
Population
Group*
Average Per Capita
Assessed Value
1944 1943
Per Cent
Increase in
Assessment
1943-44
Per Cent
Increase in
Assessment
1939-44
I d
II
III
IV
V
VI"
Total
$1449
1654
1195
1221
1253
1249
1337
$1431
1644
1189
1203
1235
1230
1323
1.3%
.6
.5
1.5
1.5
1.5
1.1
1.3%
.4
3.1
24.8
7.3
7.2
3.6
(See footnotes on preceding page.)
1944]
TAX RATES OF AMERICAN CITIES
599
usually included with the county.
However, in all cases where special
districts have been included in either
the city, county, or state rate this
fact is indicated in the footnote to-
gether with the amount of the spe-
cial district rate so included. City
officials are sometimes annoyed by
this practice and point out that their
city levy is smaller than the figure
shown in the tabulation and that it
is unfair to report a figure that in-
cludes poor relief, or library, or flood
control levies. But, if these functions
are commonly performed by the mu-
nicipal government in a majority of
the cities, it is necessary to include
these levies with the city tax rate
if valid comparison is to be made.
Comparison of tax rates in various
cities to determine the efficiency of
the administration and cost of gov-
ernment is a very dangerous proce-
dure. As has been pointed out,
this unit of government performs
functions in some states which are
rendered by special districts in other
states. In the south, levies for flood
control are made against general
property, in the west, irrigation and
water supply are financed in whole
or in part from the general property
tax, in some states mosquito abate-
ment and forest preserve services are
supported by the general property
tax. Frequently cities in these areas
complain that it is unfair to com-
pare their rates with the rates of
some city that does not have these
special problems to cope with. For
this reason the reader is advised to
refer to the footnotes to determine
whether any special services are per-
formed in the city in question.
But even if all of the city govern-
ments studied performed exactly the
same services, it would still be im-
possible to determine the relative
economy of the various administra-
tions by merely comparing the tax
rates levied. In some cities the services
may be performed adequately and ef-
fectively while in others they are
performed poorly. The cost of a ser-
vice cannot be computed unless the
quantity and quality of the service
rendered is considered in conjunc-
tion with the actual monetary outlay.
Adjusted Tax Rates
After adjustments have been made
for special taxing districts, for types
of services performed, for local prob-
lems, and for quality of services, it
is still impossible to draw any valid
TABLE VI
NUMBER OF INSTALLMENTS IN WHICH CITY TAXES ARE PAYABLE
No. of Installments
Per cent of Cities
1944
Per Cent of Cities
1940
Per Cent of Cities
1935
1
18%
17%
23%
2
SO
48
47
3
3
3
4
4
21
19
19
5-9
1
2
2
10 & over
4
6
5
Optional
3
5
100%
100%
100%
600
NATIONAL MUNICIPAL REVIEW
[December
conclusions from a comparison of
the actual tax rates levied in the
various cities. Variations in assess-
ing law and practice make it neces-
sary to adjust the actual tax rates
levied before comparisons are made.
Laws in a majority of the states
prescribe that the legal basis of as-
sessment shall be 100 per cent of
true cash value. In North Dakota
and Washington, however, the legal
basis of assessment has been
set at 50 per cent of true value.
In Alabama and Iowa the state laws
have indicated that assessments
should be made at 60 per cent of
true value. In Arkansas, the State
Corporation Commission has been
delegated the responsibility for the
determination of what the assess-
ment ratio shall be, and has set it
at 50 per cent. In California, the
state law requires that assessments
shall be in proportion to value, but
does not indicate what that propor-
tion shall be. Actually, assessments
have been 50 per cent of true value
for counties and 50 to 75 per cent
for cities, with a few exceptions.
But, in many cities, assessments
are not at the legal basis prescribed
by the state law. In Illinois, for in-
stance, the state law specifies that
property should be assessed at 100
per cent of true value, but most ci-
ties in this state are assessing around
30 to 40 per cent. Cities in Cook
County have reassessed all property
and placed their rolls on the basis
of 100 per cent of true value. In
Chicago, for instance, the 1944 as-
sessed value is $4,826,912,000 as
compared with $1,861,585,000 in
1943; the 1944 tax rate is $39.00 as
compared with $104.20 in 1943. In
1943 property was assessed at 37 per
cent of its true value, this year it is
assessed at 100 per cent. To compare
the tax rates of 1944 and 1943 it is
necessary to adjust the 1943 rate to
a 100 per cent basis of assessment.
This is done by multiplying the
1943 rate by the assessment ratio in
1943 37 per cent and the adjusted
rate resulting is $38.55. In other
words, if Chicago had been assessing
property on a true cash value basis
in 1943, it would have been neces-
sary to levy a rate of only $38.55 in-
stead of the $104.20 actually levied.
Similar adjustments must be made
in the rates of every city where either
the legal or actual basis of assess-
ment is at some figure other than