Gloucester County Democrat. (Woodbury, N.J.) 1878-1932, 1897-01-21

va4..os =. nusnng, wIIlam H. vreden-
burgh, A. NJ Reynolds and Charles G.
Black, and these gentlemen have per-
formed the duties required Of them under
their appointment and their report will be
laid before you
1t appears that the feature of the present
tax laws most complained Of is that which
gives to the state the largest proportion OF
taxes levied upon the property of railroad
corporations. It also appears that shis
complaint is practically limited to one To-
cality-viz, Jersey City, in the county Of
Hudson.
The present system Of taxation of rail-
road property divides 1t into three classes:
First. Property not used for railroad
purposes Is assessed and taxed by the same
assessors in the same manner and at the
same rate as the taxable property of other
owners in the same municipal division or
taxing district.
Second. Real estate used for railroad
purposes, including the roadbed (other
than the main steml, waterways, reser-
voirs, tracks, buildings, water tanks, wa
terworks, riparian rights, docks, wharfs
and piers
Third. That property which the statute
designates by the term "main stem, :"
which includes the roadbed not exceeding
100 feet In width, with its rails, sleepers,
depot buildings used for passengers; tan
gible personal property" under which
term is included rolling stock. cars, loco
motives, ferry boats. machinery, tools and
the franchise of the corporation.
Upon the second and third Glasses Of
property above mentioned the companies
pay taxes to the state at the rate Of one
half Of per cent upon valuation fixed
by the state board of assessors.
Upon the second class above mentioned
the companies pay an additional tax of
per cent to the municipalities or local tax
ing divisions in addition to the tax Of one
half of per cent paid to the state This
tax for the benefit of the localities is COL
lected by the state and paid over by 1t to
the respective localities. The amount so
collected and paid over in the last fiscal
year to the various taxing districts was
$410, 083. 40.
When railroad companies were first char
tered IN this state, and for a long period
afterward, and until the year 1S73 no tax
whatever was paid to the localities upon
property used for railroad purposes The
charters of the different companies proYid-
GU AOE q SpOCAdA W b1l6 ebdbo3 E6l6ra1ly
at the rate of one-half of per cent upon
the cost of the railroad, its equipment and
Rppendages. In some instances transit
duties were exacted instead of a rate upon
the cost of the road.
The theory of the state was that rail-
road was of quasi public nature, exerois-
ing public functions which appertain to
the state at large and subject to control In
under the Interstate commerce clause Of
the federal constitution. The right of
local taxation was not recognized by law
until the passage of the act of 1873 enti-
tied AN act to establish just rules for the
taxation of railroad corporations and to
induce their acceptance and uniform adop-
tion.''
The preamble of said act discloses In a
historical sense its purpose and is worthy
of quotation in this place. The preamble
is as follows:
Whereas, For the enoouragement of railroad
enterprises, laws creating and regulating rail-
ways in this state usually provide for the pay
ment by them, in consideration of their char
tered privileges, of q fixed rate upon their
capital stock or the cost of their works in lieu
of all other public fmpoSitions whatever, and
whereas it is nevertheless contended that the
property of such corporations, being largely
HcQulT6u 1OI OF bQEOuRD bu0 REOWD0 ana G4~
tension Of their prosperity, should contribute
TO the charges and expenses essential for mu-
nioipal and county purposes and whereas II
cation and future dissatisfaction, shat such
municipal and county taxation shall be author
lied and that the same shall be permanently
fixed and regulated Pamphlet Laws, 1878,
page 112).
That act then provided that railroad
companies should pay upon their cost,
equipment and appendages a state tax aft
Or such rate of taxation as had heretofore
been fixed by law upon such corporation,
OF in default thereof after the rate of one
half of per centum upon such cost. Upon
the real property by them occupied, used
or owned for the purpose of their road or
otherwise, excepting their main stem or
roadbed and track, not exceeding 100 feet
in width, such companies should pay
county and municipal tax for the benefit
of the counties, townships and cities re-
spectively where said property is situate,
after the rate of per oentum upon valu-
alton thereof of all improvements thereon,
excepting that each company might hold a
tract of land not exceeding ten acres In one
parcel, with the buildings and improve
ments thereof at their termini, which
should be free from the payment of local
taxes
In 1876 the basis of the state taxation
was changed from cost to true value This
was done to comply with the provisions of
the amended constitution directing that
property should be assessed for purposes
of taxation at it's true value.
The law under which railroad property
is now assessed was passed in 1884. This
law made still further concession in ia
vor of local taxation by olnitting the ex-
ception of ten acres at the termini of the
roads, but continued the policy of exact
ing one-half of per cent as a state tax
upon the whole visible real and personal
property of the corporations used for rail-
road purposes, and added to that tax up
on the value of their franchise.
This policy of taxation has in one form
or another been the policy Of the state
since railroads were first constructed, and
is based upon sound principle and is not
liable to valid, objection. At the same time
it Is manifest that there has been tend
ency on the part of the legislature to con-
cede from time to time something more to
the localities than was originally granted,
and the practical question now raised by
the repQ-t of the commission Is whether or
not it I Apedient to make further con-
cession In the same direction. All the
commissioners agree that the principle Of
railroad taxation adopted by the act of
1884 should be maintained. That principle
has resulted very beneficially to all the
people of the state, enabling the state gov
ernment to be carried on without the i'm
position of direct taxes upon the people.
The report Of the commissioners recon-
mends that the state relinquish to the To-
calities the tax of one-half of / per cent
now collected by 1t upon railroad property
of the second class above described. This
would, on the basis of last years income,
add about $205, 600 to the amount directly
paid to the localities and would diminish
the state revenue by the same sum.
The reasons for this recommendation
are set out in the commissioners, report,
and need not quote them.
Whether or not this additional concession
is justified under the circumstances and
whether OF not the state can afford to re-
duce it's revenue are questions for the leg
islature to decide. Such a concession would
leave the policy of railroad taxation practi-
cally unimpsired, but 1t would be neces-
sary that the legislature should exercise a
corresponding retrenchment in state ex-
penditures in order to offset the reduction
in revenue To what particular objects of
state support such retrenchment can bs
applied Is for you to decide. 1t is circum-
stance of great Importance that this recon-
mendation is unanimously concurred In by
the commissioners, and 1t Is desirable that