The producers news., 1927-06-10
REPEAL CLASSIFICATION ACT

Montana must be assessed IN only one Wdy-dI
it's full and complete valuation the min
erals contained in mines, that no effort should be
made to estimate the value of the unknown guam
tity and value of the ore in the mines but that
net proceeds tax should be used instead or in /
other words that the profits of the mines should
be taxed after the mine had paid five dollars per
acre full value on the surface area, and on the
full valuation of the machinery and appliances
used in mining.
The wording of this clause of the Constitution
of the State is plain: it is clear that the trainers
of the section meant that moneys, credits, farm
lands, grazing lands telephone plants, public uti-
ty plants railroads, stocks and bonds, and all 9TH
er personal property should be taxed at its full
and true valuation-that is, the full and true
valuation of all property should be used as the
base which to make the levy to raise the re-
quired to support state, institutions, coun-
ties, school districts and cities. The maximum
levy allowed for state purposes was defined by
this Constitution. The Constitution was amended
in 1920, allowing a special specific levy to be
made for the support of the institutions of high
er learning and their activities
The law provides the limitation of the leves
that can be made for county purposes, for school
purposes, for city purposes, allowing considerable
latitude. The Constitution at the same time pro-
vides the limitations for the bonded Indebtedness
of State, countless school districts and cities, al
lowing usually an Indebtedness equal to 5 per
cent of the assessed valuation of the particular
t nicipality.
The Constitutional idea of "full valuation" was
used until 1918 when the property classification
! law was passed, and signed by Gov Sam Stewart
The law was the result of the recommendations
of special commission provided for by Act of the
1
o 1917 which commission was created to make q
special study of the tax situation in Montana anC
bring in recommendations to the legislature, which
,r recommendations were submitted to the specia
session of the 18th assembly and by that assembl!
enacted into law.
Prior to this passage of this property classifi
= cation" law, the revenues had always been ade
quate to meet all of the needs of the state leav
ing a small surplus But the results of tn
property classification" law was a state defici
" the very first year. This deficit has increased ev
' cry year since without exception until it nov
u amounts to over $3,OOO,OOO and would amount t
a million more but for the Clark inheritance ta
u which was paid last year.
: The law was taken to the Supreme Court an
~ was by that body held to be constitutional, tn
it is obvious to any lawyer that it is not.
Gov. Dixon made his campaign for governor o
ed the existence of the state deficit charging ez
r. travagance, and promising to pay off the debt.
ms During Gov. Dixon's administration the Stat
ne debt grew like the green bay tree, and the grow
ne ing deficit was made the campaign issue of 2
10 when Dixon went down to defeat by Gov. Ericl
1t son who charged Dixon with extravaganza an
'e- promised administration of economy and tt
payment of the state debt-but the debt under Go
10 Erickson's administration still grows.
I'LL L. Al
will continue to grow as long as the law stand
re accumulating interest charges on the outstandir
ere warrants which the deficit, thus ncreasir
elr constantly the overhead expenses of the state
laC interest charges on deficit.
u.s. These interest charges now amount to abo
The $15O,OOO per year which goes to the money len
ar; ers. Next year and the year after this will al
nat cunt to more and more as the debt piles up
us And in the end it will all have to be paid-f
the cost of maintaining the State must be mt
eau if not today then tomorrow.
ma The result of the property classification" la,
olc was the reduction of the base upon which t
NC state levy made. The levy of the State
!, ing fixed it could not be raised to make up t
'ne loss of revenue brought about by this reducti
VI of the base-therefore the result was a reducti
es' in the amount of the States revenue from dire
leI taxation occurred.
ie The counties and cities and school districts n
this by increasing the levy from say 10 or 12 mi
aue to 20 or "a mills or even more. The State COZ
gnu not do this.
mp There were no changes in results as far as
cry counties and other subdivisions were concern
Oe but the effect the State treasury was apps
tne ing.
acy Now, who was the principal gamer by this
'Aul rangement? Who was behind this idea in
anu first place? Who put it over?
anu True enough the farmers and merchants E
~ small property holders, saved little very
tie on their taxes to the state by this new
ned rangement, but the savings to the farmers W
TO only for the time and more apparent than rea
ma they will have to pay the deficit in the end,
ard the interest
But the Great Northern Railroad, the North
oom Pacific railroad, the Chicago and Milwaukee R
OF road, the Burlington Railroad, and the 500 [,
ow- and any other railroad that happened to be
the State, the telephone and the telegraph pror
Tor ty, the Montana Power Company property,
Rus Anaconda MINING comnanv bacorso os +.o;,
timber holdings, together with other mines
cause of the immense value of their machin
than were all benefited by this property classf