Pag* 4 



The HliBoi* 



ukaral AMOciatioii Record 



May 1, 1923 



Tax Statement By I A, A. Statistical Service 



THE ASSESSMENT OF FARM PROPERTY 



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



Both th^\ Constitution of the State of Illinois and the revejiuc 

 laws demaiM uniform valuations of all kinds of property for 

 taxation, t^he general, revenue act directs that all property not 

 specifically ^Kempted bj' general law shall be valued by assessors 

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

 The requirf^uent of "fair cash value" Is usually disobeyed by all 

 assessors, tinder the present nxa.\lnium tax »«rtes, which were lived 

 by the legislature with full knowledge of thfpractice of underasiesi- 

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

 asscBsed. But this fact does not rellev* assessors and equalizing 

 bodies' from the legal obligation of making uniform assessments -and 

 of ftxUig valuations of all property, including intangible property, at 

 the Banie jmrcentage of its fair cash value. A decision of the Supreme 

 Court of Illinois, handed down December 18, 1918, declares: "One 

 perejon cannot be compelled to pay a greater portion of ta.xes, accord- 

 ing to tBe value of his property, than another, and where assessors 

 have disregarded the injunction of the law and made an assessment 

 of property far below \t8 real cash value, their misconduct must also 

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

 sonsi must be at the same proportional value." 



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

 at laast, farm property has been assessed at i^ much higher percentage 

 of Its fair cash value thail most other property. Following is an 

 aiialysis of tlie evidence. i L t 



Persoiutl Pro|)erty f ! 



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

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

 ment of Agriculture, of each kind of live stock on Illinois farms on 

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

 live stock in the state as a whole on April 1; (c) the percentage of 

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

 valuation on April 1. 



VABM VALVES ASD FCLI. AS!IE.<ISEI> VALrATIONS 

 \ or LIVE STOCK — 1021 



Ktaid at 

 ■lock 



(>> (l>) <o 



V. s. D«pt. Ait. Aveiucr full Fer«entace of Jsn. 1 



avenijre rnrtn v«lti« aj«NMttt«<l vain*. Tftla« uk<4 In Apr. 1 



Jaaawr 1 tlon — .4prU 1 Tulaation 



Horaes. p»r head $85.00 



All cattle, per head 48.0* 



Mulos and asses, per head 97.00 



Sheerp. per head 6.90 



Host, per head 13.70 



Utii tt 

 Ihr* ^ 



•tock 



VAIASSa AND PVLt, AS.<IES»IBO VALUATIONS 

 OF LIVE STOCK — 1022 



(*) (b) (c) 



V. S. l>ept. Act. Aventjte fnU Percentage of Jan. 1 



aTC«mtf« farm valaa aaiie<iHe«l valua- valoe oiied In Apr. 1 



January 1 Uon — .\prU 1 valuation 



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

 alone, while the average valuation is for 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 head 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 months period for tioth 

 years for which average values 

 and average assessed valuations 

 are given above, it is probable 

 that horses and mules increased 

 moderately in value, and that the 

 same>>v.-aartriie of hogs in 1921 

 In 1922 both hogs and sheep in- 

 rreaaed largely in average value. 

 It ia not probable 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- 

 lowances for Increases in average 

 values beti^eea January 1 and 

 April 1, it is fairly certain that 

 Ikrm animals were assessed at 

 about 66 per cent of their aver- 

 age value on April 1, 1921, and 

 at more than 60 per cent of their* 

 average value on April 1, 1922. 

 Real Estate 



la the last two or three months 

 a considerable aumber of county 

 farm bureaus have been investi- 

 gatinc the 1922 f«ll assessed val- 



uations and sales values of all 

 farm land and town and city lots 

 recently sold for which the con- 

 veyances g(ve exact information. 

 In every one of these counties 

 very wide fluctuations 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 

 SB were all the town and city lots 

 sold. Average figures have now 

 been secured, for a sufflcieat num- 

 ber of counties, fairly represent- 

 ing 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- 

 gan in 1,920 reflected in substan- 

 tial decreases in assessments. In 

 every cbunty in which assessments 

 were either practically stationary 



or were Increased, the decrease in 



sales value of land has greatly] 



^■tf 



increase * percentage of sales 



value v in the assessments. 



Even in of the few counties 



in whici 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 lescrlbed above, it 

 was foun t assessments ran 

 as high, one county as a 

 whole, as it 59 per cent of 

 sales vail In about half of 

 the count including one or 

 two of th hest Central Illi- 

 nois counti reached or passed 

 50 per ceE . fell to about 45 

 per cent iii oceral counties, and 

 below this figure in two or three 

 counties. In all of those falling 

 below 45 per cent, and perhaps 

 some above this figure, it is be- 

 lieved that a careful checking of 

 all land transfers so as to ex- 

 clude thos Ich merely repre- 

 sent trade the completion of 

 old contra ould substantially 

 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 wns and cities, the 

 increase les values has not 

 been refl in substantial in- 

 creases i ;rage assessed val- 

 uations, proportion of im- 

 proved f o unimproved lots 

 is the g 5t recorded In the 

 ladt twe ears, both fn the 

 state as hole and in most 

 conntles. the average per lot 

 assessed valuation for 192.2, 

 in the St J a whole, improve- 

 ments in d, was lower than 

 in any y<' nee 1915. In Cook 

 County, i ing the city of Chi- 

 cago, it at its lowest point 

 since 191 a about 17 counties 

 it Was lo han it was twenty- 

 one yean 



The g increase In sales 

 values of . and city lots, with 

 assessed ' tions either almost 

 statlonar; in many counties 

 actually asing, has lowered 

 the perc e of recent sales 

 values U! i the 1922 fufl as- 

 sessed vs >ns. In all of the 

 counties 3 the farm bureau 

 determini ; percentage, it was 

 found to IS than 45 per cent. 

 In most I es as a whole, it is 

 less than ^r cent. In a num- 

 ber of cil is not much above 

 30 per ce id in one or two is 

 less than er cent. 



and Lots 



In onl e or two counties 

 does' It I r that land is as- 

 sessed no uicjer than town and 

 city lots. The difference is us- 

 ually so ' that the raising of 

 average ' tions of all the' town 

 and city in a county to the 

 same ba: land would require 

 an incre: ' from 15 to 30 per 

 cent. I e county it would 

 exceed 4 • cent. A lowering 

 af land le baais of lots In 

 most of ounties investigated 

 would ri t an average reduc- 

 tion of 12 to 25 per cent, 

 running } more than 30 per 

 cent In ir two ..counties. 

 5r Proiierty 



In tt vestigation of sales 



values ) ssessed valuations of 



town ai ;y lots, nearly all of 



the lotf ist of residence prop- { 



erty. r as business proper- 1 



ty can be separated, it is 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 the.-e can be 

 no doubt that business property 

 is assessed at less than moat resi- 

 4ence 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 )5.000 is assessed 

 for $685, or one-seventh of its 

 estimated value. Another plant 

 is valued at $40,000 and assessed 

 for $1,500, or less than four per 

 cent of its real value. In another 

 county, a coal mining company 

 has property conservatively val- 

 ued at $2,000,000. Last year it 

 was assessed at $38,000 or less 

 than two per cent of its real 

 Value. In another county a well 

 known manufacturing company 

 in its annual report gives 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. 



Conclusions I>ra\m 



The . information given above, 

 though drawn, so far as it re- 

 lates to real estate, from abput 

 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 counties and 

 In the state as a whole, there is 

 little uniformity in assessing dif- 

 ferent classes of property. So 

 far as available evidence is suCB- 

 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 prob- 

 able that land was assessed at an 

 average of about 50 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 of dollars in taxes paid 

 in the last two years. In one 

 county, the county and state 

 taxes alone collected this spring 

 on land are $125,000 In excess of 

 what they would be if Jand 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 miwt cquntiea assessors were 

 instructed to value all property 

 this spring at 60 per cent of fair 

 cash value. If 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 

 in the assessments of town and 

 city lots in most counties aver- 

 aging at least 56 per cent, run- 

 ning up to 70 or. 75 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 is ex- 

 tremely iniprobable 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 45 

 per cent of actual cash values. 



It is highly important to farm- 

 ers and farmers' organizations to 

 know what the level of the new 

 assessments will prove to be for 

 farm animals, farm land, town 

 and city lots, and so far as possi- 

 ble for business, manufacturing, 

 and niining 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 be raised by the Illi- 

 nois Tax Commission this fail in 

 its work of equalizing the valu- 

 ations of different classes of prop- 

 erty between the counties ant^ in 

 the state. The county farm bu- 

 reau that knows bow different 

 classes of property' are assessed 

 this year is in a position to se- 

 cure just assessments. This is no 

 place for guess wotk or rule of 

 thumb methods. 



The farm bureaus which have 

 investigated the 1922 assessed 

 valuations and recent sales val- 

 ues of 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 helik 

 In analyzing the data when se- 

 cured. In most counties, records 

 of 200 transfers should be suffi- 

 cient. The necessary data can 

 be secured at little coat, and will 

 require one person's time for 

 only a few days. 



Co-operation Is 

 Asked By I. A. A. 

 Traffic Division 



The Transportation department 

 is asking the co-operation of 

 farm bureau members in secur- 

 ing Information where service 

 may be given. 



Each Monday morning a rep- 

 resentative of the department 

 goes to the Chicago stock yards 

 and checks up on all losses on 

 live stock of the week previous 

 Incurred by Illinois farm bureau 

 members or shipping associations. 

 The matter is then taken up with 

 the shipper to get the facts of 

 the case and to secure the au- 

 thority to pursue the claims. The 

 department ia asking that more 

 prompt replies be made to these 

 inquiries so that it may know It 

 adjustment Is desired. 



Farm bureau shippers of the 

 state are also asked to inform 

 the Transportation department- of 

 Inadequate watering facilities or 

 other undesirable conditions at 

 live stock loading pens, so that 

 they may be remedied before hot 

 weather. 



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