.

LOCAL ASSESSMENTS AND EQUALIZATION ADMINISTRATION

The chief function of the Bureau of Local Assessments, Equalization and Statistics is to gather information relative to methods of local assessment in all the tax districts of the state. This bureau also seeks information relative to county equalization, and collects and collates statistics relative to taxation. By reason of the information thus gathered, the State Tax Commission is enabled to assist local assessors in performing their statutory duties; to advise intelligently with city officials and with any and all tax officers throughout the state, as well as, with citizens who may be interested in tax problems, local or general; and to place at the service of the State Board of Equalization necessary information relative to the duty imposed on it by statute.

The bureau is a creation of the present Commission and its work is closely related to the Commission's statutory duties: to investigate and examine the methods of assessment throughout the state; to confer with, advise, assist and direct assessors and other officials charged with duties relating to the assessment of property for taxation; to furnish local assessors with information and instruction necessary to enable them to make proper assessments; and to compile and publish statistics relating to state and local taxation.

In all tax districts where special franchise property is located, the ratio of assessed to actual valuation is a prime necessity in equalizing special franchise assessments, and on entering upon its duties the present Commission immediately examined all such information as was at that time in the possession of the department. Practically the only information at hand consisted of lists of sales of property which had been reported by the special agents of the department or by local assessors and corporations. These lists of sales being unverified, bore no evidence of being either authentic or complete. As matter of fact, they showed a wide difference in rates of assessment and the information given could not be relied upon. For example, one list of sales of property in a second class city, reported by corporations, showed that real property in that city was assessed at not more than 64 per cent. of its market value, while a list of sales reported by assessors covering the same period, indicated that such property was assessed at more than 90 per cent. Again, one list of sales reported by a former special

agent of the department showed that real property in one tax district was assessed at more than 150 per cent. of its market value, while another list covering the same period indicated an average assessment of 10 per cent. of the market value of such property. Information of such a character is not only useless; to pay for procuring it is a sheer waste of money. Apparently many of these lists of sales had been selected for the evident purpose of showing a lower or higher rate; whole pages of them show only a nominal consideration, usually one dollar. Such information is utterly without value. The true consideration in a deed is, for the purposes of assessing real estate, about the most significant evidence as to the value of the property which an assessor can get. It is the most difficult information for him to acertain. That the assessor is required to determine the full value of real estate, and yet is provided with no method for securing the very information which would prove most valuable to him in the performance of his duty, constitutes a striking incongruity in our law.

Taking all these things into consideration, it seems that the equalization of assessed values in former years must have been largely a matter of guess work.

It is a fundamental principle in taxation that no assessment is valid which is not based upon proper identification of the property assessed. The courts have uniformly insisted, where the validity of an assessment was questioned, upon strict compliance with the statute. That the assessment-roll should be clear, complete and accurate is therefore of great importance. An examination of the records of the department clearly revealed the fact that prior to the present year, many assessment-rolls had not been properly made. In one year, in the forest preserve counties, taxes aggregat ing $7,736.41 were admitted by the State Comptroller, while taxes aggregating $175,773.88 were rejected because of errors in the assessment-rolls. The amount of tax rejected because of errors in the assessment-rolls was approximately twenty-three times the amount admitted.

Admonished by such conditions, the present Commission has thoroughly reorganized the local assessment work of the department. Special agents are now directed to gather such information

sessment work. In addition to lists of actual sales of real estate, the bureau of local assessments now obtains from reliable sources appraisals of values of thousands of parcels of property throughout the state. These include appraisals by banking institutions, insurance companies, local real estate experts, as well as appraisers appointed by the courts to appraise properties of deceased and incompetent persons. Records of mortgage loans and the appraisals on which such loans were based have been obtained from state and local departments. The federal stamp tax act has materially aided in the gathering of information relative to local realty values. From every vailable source, effort has been made to get reliable data on local assessments. The amount of such data collected, filed and classified is already large, and of inestimable value to the Commission in its work of equalization and review. Calculations made from this information show interesting conditions. In one city of more than 25,000 people, property exclusive of that owned by corporations is apparently assessed at an average value of $2,700 an acre. At this value, it would be possible to purchase in that city a lot 50 x 100 feet with dwelling for $350. In one county property outside of cities and incorporated villages is apparently assessed at rates varying from $1.50 to $20 per acre, including buildings. The forest preserve of the State is assessed at rates ranging from fifty-nine cents to $8 per acre and in no two towns of any county do the assessed values appear to have been computed on the same basis. The average assessed value per acre of the forest preserve is $2.90. This comprises 1,561,227 acres.

Assessment-rolls are now being examined and all possible aid given in their preparation by local officials. Special attention has been given to the work of equalizing property values in the various tax districts of the state. Equalization should never be a haphazard performance. It should always be a conclusion reached by careful calculation based on proper and reliable information. As far as practicable, the bureau collected detailed facts regarding full and assessed values of real property in each municipality and this information was made the basis of calculations to determine the ratios of assessed values to full values. During the year all valuations of special franchise property of corporations have been equalized; hearings have been given for each county, city, town, village

and corporation affected; and the final equalized valuations of such property have been determined in forty-six cities, and in each county, town and village of the state outside the city of New York. For each of about 1,600 municipal divisions of the state, a tentative ratio and a final ratio have been fixed, a hearing given thereon, and the entire work brought to a satisfactory completion.

While it may be maintained that, because the determination of property values is a matter of personal opinion, such values cannot be equalized by mathematical calculations alone, it should be noted that but few objections from either the municipalities or corporations have been made against the ratios of assessed values to full values as determined by the Commission. Practically all the objections were of a formal nature and were made by corporations for the sole purpose apparently, of going on record as not concurring in the judgment of the Commission in particular cases in which they were interested. In those taxing districts in which the value of special franchise property of corporations is soon to be equalized for 1916 by the Commission, data regarding the assessment of property is now being gathered with due care by special agents. Such data consist of records and conveyances of real property, mortgages and appraisals of property values from dependable sources. All information gained from other than department sources and court records is verified and, whenever possible, supplemented by the investigations of our special agents.

Since October 1, 1915, the time of the bureau has been devoted largely to the equalization of assessed valuation of property by boards of supervisors and equalization commissions. Detailed outlines of the work required by law of such boards and commissions, and the manner in which that work must be performed to secure a proper and just equalization, have been set forth in communications sent to every board and commission in the state. Equalizations in each county during previous years have been carefully studied and special agents and representatives have been sent from the department to give personal aid to boards of supervisors and equalization commissions in their work. Complaints made to the Department against equalizations have been carefully investigated and every possible assistance has been given by correspondence and

of the general property taxes among the several tax districts throughout the state.

The work of local assessing boards in determining the amount at which shares of stock in national and state banks shall be assessed has also been investigated by the bureau and all possible aid has been given to secure proper assessment of the same. It was found that, in one county, not a single bank was properly assessed, and this condition has been corrected.

For the first time since the decision of the Court of Appeals in the case of the People of the State of New York ex rel. the City of Geneva v. The Board of Supervisors of Ontario County (188 N. Y. 1), which was decided in February, 1907, the assessed valuation of the shares of stock of state and national banks was included as a part of the personal property of all the counties, with the result that for the present year through the efforts of this Commission, there was added to the value of the property on which the general state tax is apportioned and computed, the sum of $485,896,899, and the state will receive $826,024.73 more than it would have received under the method of previous years.

The facts procured and the conclusions reached by the Commission in the matter of the ratios of assessed values to full values, were submitted to the State Board of Equalization at its meeting, September 7 and 10, 1915. This material included reports of investigations in the various cities and counties of the State, together with a large amount of data concerning rates of equalization. After full consideration and discussion, the rates finally recommended by the Commission were unanimously adopted as a basis for making the table used for the distribution of the state tax among the various counties of the state.

The effort devoted to the accumulation of data, the care with which local assessment rates are being studied, and methods of equalization investigated and reviewed, are bearing fruit in more intelligent tax administration. With the annual increase of material, with the continuous study of methods of assessment in all parts of the state, and with the careful system of filing now in use by which all material is made available for immediate use, the labor of this bureau will be of ever increasing value in the tax administration of the state.