Pkg«4 



The DEnoH i ahiml AModaliaa Rscord 



Mv 



Tax Statement By I A. A, Statistical Service 



L 



THE ASSESSMENT OF FARM PROPERTY 



A statement by the Statistical Department of the I. A. A. 



Both the Constitution of the State of Illinois and the revunuc 

 laws demand uniform valuationa of all kinds of properjy for 

 taxation. The general revenue act directs that all property uot 

 specifically exempted by general law shall be valued by assessors 

 at the amount it would bring in a fair, volnntarj- sale for cash. 

 The requirement of "fair cash value" Is usually disobeyed by all 

 assessors. Under the present maximum tax rate?, which were fixed 

 by the legislature with full knowledge of the practice of underassess- 

 ment, it is fortunate for owners of tangible property that it is under- 

 assessed. But this fact does not relieve- assessors and- equalizing 

 bodies from the legal obligation of making uniform assessraenta and 

 of fixing valuations of all property. Including intangible property, at 

 the same percentage of its fair cash value. A decision of the Supreme 

 Court of Illinois, handed do»n December 18, 1918, declares: "One 

 person cannot be com)>elled lo pay a greater portion of taxes, accord- 

 ing to the valni of his property, than another, a;nd where assessors 

 have disregarded the injunction of the law and made an assessment 

 of property far below its real cash value, their misconduct must also 

 follow the principle of uniformity and .their assessments of all per- 

 sons must be at the same proportional valuei." 



• All available evidence indicates that, in the last two or three years, 

 at least, farm property has been assessed at a much higher percentage 

 of Its fair cash value than most' other pr«perty.<. FoUowinc is an 

 analysis of the evidence. 



^ ' ' Personal Property 



The tables below give for each of the years, 1921 and 1922, (a) 

 the, average farm value, as estimated by the United States Depart- 

 me^ of Agriculture, of each kind of live stock on Illinois farms on 

 January 1; (b) the average full assessed valuation of each kind ot 

 live stock in the state as a whole on April I; (c) the percentage of 

 the average farm value on January 1 used in the average full assessed 

 valuation on April 1. 



VABM VALCBS A>D PVLL, ASSESSED VALUATIONS 

 OB* LIVK STOCK — ISSl 



Ktaid «t 

 live 

 •lack 



(■> 



r. R. Dnx- Acr. 



ftvarace tmrm valae 

 Janaary 1 



<b) (e> 



ArtntK* fun Fer«etttace of Jan. 1 

 aa«««aM valna- valve iu«d In Apr. 1 

 tlon — April 1 TolaaUon 



•-•AlUi TAIiVBS AMD FVLL ASSESSED VALVATIONS 

 or UTE STOCK — 1912 



Kind wt 



(a> 



v. 8. Dept. Asr. 



avcraca farm value 



Jamiarr 1 



(b) (e> 



ATrrace fall Tt ii iiilatii of Jan. 1 



aaaeaaM valoa- Talae oaed In Apr. 1 

 Uon — April 1 Talaatlsa 



For the third Item the estimated average farm value is for mules 

 •lone, while the average valuation Is fer mules and asses, but it is 

 not believed that this difference could affect averages very much. 



\ 



Under ordinary conditions, 

 horses, mules, and hogs Increase 

 in average value per bead from 

 January 1 to April 1. Cattle and 

 sheep increase ,■ or -decrease In 

 average value more or less in 

 accord with fluctuations of mar- 

 ket prices for fat animals. In the 

 three m«nths period tor both 

 years for which average values 

 and average assessed valuations 

 •re given above. It is probable 

 that horses and mules Increased 

 moderately In value, and that the 

 sante«.waartrue of hogs in 1921. 

 Ill 1922 bot^ hogs and sheep In- 

 creased largely in average value. 

 It is not 'prSttable that cattle 

 changed much in average value 

 in the three months of either 

 year, or that sheep changed much 

 in average value in 1921. 



But, even with reasonable al- 

 lowance for Increases in average 

 values between January 1 and 

 April 1, It la (airly cerUln that 

 farm animals were assessed at 

 about 60 per cent of their aver- 

 age value on April 1, 1921, ani 

 at more than 60 per cent of their 

 average value on April 1, 1922. 

 ReiJ Estate 

 In the last two or three months 

 a considerable number of couaty 

 farm bureaus have been investi- 

 gating the 1912 full assessed val- 



V 



nations and sales values of all 

 farm land and town and city lots 

 recently sold for which the con- 

 '^eyances g^ve exact information. 

 In every one of these counties 

 very wide fiuctuatious were found 

 in the individual assessments of 

 both land and lots. The chief 

 purpose, however, of the investi- 

 gation was to discover whether 

 all the land sold was assessed the 

 same percentage of its sale value 

 as were all the town and city lots 

 sold. Average figures have now 

 been secured for a suSIcie^t num- 

 ber of counties, (airly represent- 

 illg the different soil types and 

 economic conditions of the state, 

 to warrant a general statement 

 of what the investigation dis- 

 closes. 



Farm Land 



In 1922 farm land. Including 

 improvements, in the state as a 

 whole was assessed at the high- 

 est valuation ever used. The 

 same was true in a large number, 

 of counties. In only a few coun- 

 ties was the great decrease In 

 the value of farm land which be- 

 ga? In 1920 reflected in Substan- 

 tial decreases in assessments. In 

 ev'.ry county in which asseasmenta 

 were either practically stationary 

 or were increased, the decrease in 

 vales value of land has greatly 



Increase ■■ percentage of sales 



value \> in the assessments. 



Even In of the few counties 



in whicl essments have been 



substant: decreased, it Is 



doubtful >ther the decrease 



has kept ' with the decrease 



in sales s. 



In the ties engaged In the 

 investigat iescribed above, it 

 was foun t assessments ran 

 as high, one county as a 

 whole, as it 69 per cent of 

 sales vail In about half of 

 the count Including one or 

 two ot th best Central Illi- 

 nois count! reached or passed 

 50 per cen . fell to about 45 

 per cent it ..oeral counties, and 

 below this figure in two or three 

 counties. In all of those falling 

 bellow 45 per cent, and perhaps 

 some above this Qgure, it Is be- 

 lieved that a careful checking of 

 all land transfers so as to ex- 

 clude thos Ich mei^ly repre- 

 sent trade the completion of 

 old contra ould s'-.bstantially 

 Increase tl rcentages found. 

 r Lots 



In the nation year 1919, 

 town and lots had not in- 

 creased I ' in value. Their 

 values be :o Increase rapidly 

 In 1920, are now at their 

 highest p in nearly all parts 

 of the St Except in compar- 

 atively fe wna and cities, the 

 Increase les values has not 

 been refl in substantial In- 

 creases 1 3rage assessed val- 

 uations, proportion of Im- 

 proved 1 o unimproved lots 

 Is the g it recorded in the 

 last twe ears, both fn the 

 state as hole and In most 

 counties. the average per lot 

 assessed valuation for 1922, 

 In the St 3 a whole. Improve- 

 ments In d, was lower than 

 In any y< nee 1915. In Cook 

 County, 1 Ing the city ot Chi- 

 cago, It at its lowest point 

 since 191 a about 17 counties 

 It was lo ban It was twenty- 

 one yean 



The g increase In sales 

 values of . and city lots, with 

 assessed tions either almost 

 Btatlonar In many counties 

 actually aslng, has lowered 

 the perc e of recent sales 

 values ui i the 1922 full as- 

 sessed vs )ns. In all of the 

 counties 3 the farm bureau 

 determlni > percentage. It was 

 found to IS than 45 per cent. 

 In most < es as a whole. It is 

 less than it cent. In a num 

 ber of cit Is not much above 

 30 per ce id In one or two is 

 less than er cent. 



and Lots 



In obI e or two counties 

 diieB It I r that land Is as- 

 sessed no uicjer than town and 

 city lots. The difference la us- 

 ually so ' that th« raising ot 

 average ' tions ot all the town 

 and city In a county to the 

 sam$ bat land would require 

 an increi ' from 15 to 30 per 

 cent I e county it would 

 exceed 4 • cent. A lowering 

 of land le basis of lots In 

 most of ountles investigated 

 would r< I an average reduc- 

 tion of 12 to 25 per cent, 

 running 3 more than 30 per 

 cent in >r two counties. 

 ST Property 



la tt vestigation of sales 

 values I ssessed valuations of 

 town ai ;y lots, nearly all of 

 the lotf 1st of residence prop- 

 erty, r as business proi>er- 



ty can be separated, it Js .usually 

 found to carry very low assess- 

 ments. This is probably due In 

 part to the tendency noted in the 

 last paragraph for the lots of 

 highest value to have the lowest 

 relative assessments. In most 

 counties Investigated thee can be 

 no doubt that business property 

 is assessed at less than most resi- 

 dence property. 



The investigation has not gone 

 far enough to give any average 

 figures. Examples, however, can 

 be given showing the ridiculously 

 small assessments of some large 

 properties. In one county a com- 

 paratively small plant valued by 

 Its owners at 15,000 Is assessed 

 for 1686, or one-^eventb of Its 

 estimated value. 'Another plant 

 is valued at $40,000 antl assessed 

 for 11,500, or less than four per 

 cent of its real value. In another 

 county, a coal mining company 

 has property conservatively val- 

 ued at 12,000,000. Last year it 

 was assessed at $38,000 or less 

 than two per cent ot its real 

 value. In another county a well 

 known manufacturing company 

 In its annual report glveb the 

 value of its physical plant, equip- 

 ment, materials, and finished 

 goods at about $3,000,000. l.ast 

 year it was assessed at a trifle 

 more than $90,000, or three per 

 cent of the value claimed in its 

 annual report. 



CoDcloslons Drawn 



The information given above, 

 though drawn, so far as it re- 

 lates to real estate, from about 

 one-eighth of the counties of the 

 state, is believed to be more or 

 less typical of conditions in other 

 counties. In any case it is safe 

 to say that in most counti^ and 

 in the state as a whole, th<ere Is 

 little uniformity in assessing dif- 

 ferent classes of property. So 

 tar as available evidence is suffi- 

 cient to warrant conclusions, it 

 is fairly certain that farm ani- 

 mals were assessed In 1922 at 

 from 60 to 65 per cent of their 

 fair cash value, while It Is prolix 

 able that land was assessed at an 

 average ot about SO per cent, and 

 town and city lots at less than 

 40 per cent of their fair cash 

 value. It Is also probable that 

 mercantile, manufacturing, and 

 mining properties, on the aver- 

 age, were assessed the lowest of 

 any tangible properties in the 

 state, but it Is not possible to 

 estimate average percentages. 



The Inequalities of assessments 

 Indicated above have cost farmers 

 millions ot dollars in taxes paid 

 in the last two years. In one 

 county, the county and state 

 taxes alone collected this spring 

 on land are $liiS,000 in excess of 

 what they would be if land were 

 assessed on the level of lots. In 

 each of a number of other coun 

 ties they are from $40,000 to 

 $50,000. 



Remedy Suggested 



In most cqunties assessors were 

 Instructed to value all property 

 this spring at 60 per cent of (air 

 cash value. It carried out these 

 instructions would require an In- 

 crease In the assessment of land 

 In most counties of the state. It 

 would probably mean an Increase 

 Ifa the assessments of town and 

 city lota in most counties aver- 

 aging at least 60 per cent, run- 

 ning up to 70 or 76 per cent In 

 many counties, and mounting to 

 over 100 per cent In certain cities 

 which were assessed at less than 



30 per cent In 1922. It la «v 

 tren^ely improbable that any such 

 violent increase In assessments of 

 town and city lots will be made. 

 It Is very doubtful If the average 

 of the new assessments of lots 

 will prove to be much over 46 

 per cent ot actual cash values. 



It is highlylmportant to farm- 

 ers and farmers' organizations to 

 know what the level ot the new 

 assessments will prove to be for 

 farm animals, farm land, town 

 and city lot^and so far as possi- 

 ble for business, manufacturing, 

 and mining property. It Is not 

 enough to have succeeded in hav- 

 ing instructions given to asses- 

 sors to lower the assessed valu- 

 ation of land or farm personal 

 property. Such decreases are 

 likely to be made very irregular- 

 ly in different townships. If Val- 

 uations are equalized by the 

 County Boards of Review, as 

 they should be, the question of 

 relative valuations of different 

 kinds of property Is certain to be 

 raised. The same question is 

 certain to he raised by the Illi- 

 nois Tax Commission this fall In 

 its work of \equalizing the valu- 

 ations of different classes of prop- 

 erty between the counties and in 

 the state. The county farm bu- 

 reau that knows how different 

 classes of property are assess^ 

 this year is In a position to se^. 

 core just assessments. This is no '^ 

 place for guess work or rule of 

 thumb methods. 



The farm bureaus which have 

 Investigated the 1922 assessed 

 valuations and recent sales val- 

 ues ot property are enthusiastic 

 in supporting this project. They 

 will continue this work by Invest- 

 igating the new assessments and 

 finding out the facts. In order 

 to help any farm bureaus which 

 have not made the investigation, 

 the Statistical Department of the 

 I. A. A. offers to spend one day 

 starting the investigation In each 

 county requesting it, and to hel|> 

 In analyzing the data when se- 

 cured. In most counties, records 

 of 200 transfers should be sulB- 

 clent. The necessary data can 

 be secured at little cost, and will 

 require one person's time (or 

 only a few days. 



Co-operation It 

 Asked By /. A. A. 

 Traffic Division 



The Transportation department 

 is asking the co-operation o( 

 (arm bureau members in recur- 

 ing information where aervlee 

 may be given. 



Each Monday morning a rep- 

 resentative of the department 

 goes to the Chicago stock yards 

 and checks up en all losses on 

 live stock ot the week previous 

 Incurred by Illinois farm bureaa 

 members or shipping associations. 

 The- matter is then taken up with 

 the shipper to get the (acts ot 

 the' ease and to secure the an- 

 thority to pursue the claims. The 

 department is asking that more 

 prompt replies be made to these 

 inquiries so that It may know if 

 adjustment is desired. 



Farm bureau shippers o( th* 

 state are also asked to in(orm 

 the Transportation department tt 

 Inadequate watering (acuities or 

 other undesirable conditions at 

 live stock loading pens, so that 

 they may be remedied betore hot 

 weather. 



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