, 1935-09-23

Eioped al all we had to have COM
petent irrigation systems 70 water
the land on which s.. s would op-
crate. Then We had a. nave schools
10 which they could send their child
rem. And more schools and finer
schools. Then we had 70 have roads
for the farmers 70 ride 70 town on.
Then the towns themselves had TO
have paved streets. And so Il went.
But here's how We finally got
into trouble. and here's the expla-
nation OF our system Of land valua-
ton for tax assessment purposes. q
system that Is hard to understand
and harder still 70 pay off under
when times get bad.
The only way we could get the
money for these improvements we
have mentioned above was by bor-
rowing the money. giving as securi-
Nv bonds OF the water districts, school
districts. the county and cities. These
bonds IN turn are secured by the
promise Of q tax on the land against
which they are issued.
Hut-how did we determine how
much money to borrow?
II you, on salary. desire to buy a
new automobile, how do you 60
about determining the amount Of
money YOU can afford to spend7
You figure up what YOU have left az
the end Of each months paying OF
routine bills. and a certain part Of
that excess Is what you can afford
10 put into a new car. So you shop
among the price class that amount
az money entities you 70 consider.
Valuations Raised
But when We came 10 issue bonds
DOR our schools and our water dis
tricts. we went about II the other
way round. We decided first how
nuch money II would cost to build the
finest school. the best irrigation
system. and then went about
scratching our kras until we figur-
I'd the way we could justify q bond
iaNEne Of that amount.
Wand the way we did II was easy:
we just said TO ourselves something
like this, We have TO have a mil
hon dollars to do what we want 10
do. Well. our assessed valuations are
low. The real estate In the district
Is really worth a whole lot more than
we have II assessed at. Wen Just
raise the valuations and with the
same tax rate as before the money
will come IN all right"
The situation lent itself TO that
sort OF thing on the part OF several
OF our various districts on account OF
the constitutional Limitation in tax
rate imposed on school districts.
cities incorporated in certain man
ners. and some Of the water dis
trscts.
An independent school district,
for example. cannot impose a tax
rate higher than 81 on the 500 val
uation. But they had to have the
money, or thought they did. How
70 get it2 They couldn't raise the
rate any higher, but they could raise
the valuations. which Is merely beat
ing the devil around the stump 10
the same destination.
To 60 into details. A school dis
trict Is getting an income of ST.
600. with its 81 tax rate on a total
valuation Of $4,000. But the peo-
pie OF that district decide that the
district needs an income OF $4,000.
What difference does II make
whether the tax rate Is liked To s.
and the valuation kept the same. or
the valuation kept the same, or the
valuation liked to 100000 and the
tax rate kept the samea The answer
Is $1,000 either way you work II.
Our valuations for tax purposes
are fixed on the amount Of money
needed to be raised. rather than on
the reasonable market value Of the
land supposed 70 be the basis for
such valuations. Bear In mind that
We are talking now IN a general way
Of school districts. water districts and
cities. not OF the state and county.