18 



Land Plaiiiiivg Report 



The costs of local croverniiipni on poor land in those 

 States which maintain hio;h standards of services may 

 be iihistrated by two Midwestern States — Wisconsin 

 and Indiana — which contain very different kinds of 

 poor-land areas. In 1932, in practically all coimties 

 of Wisconsin within what is commonly called the cut- 

 over region, costs of local govcrnnient exceeded 5 per- 

 cent of the true valuation of all property in the county. 

 In one coimty the costs were equal to almost 9 percent 

 of the triie value of the property. In five other coun- 

 ties in the Ughter soils area of the central part of the 

 State, total costs of local government exceeded 5 

 percent. In marked contrast to these comities, total 

 local government costs in the predominantly rural 

 counties of southern and eastern Wisconsin were 

 slightly more than 3 percent of the true value. Suni- 

 larly in the poor-land counties of southern Indiana 

 total local government costs in 1931 varied from 4 

 percent to almost 7 percent. In the better agricul- 

 tural areas the total costs of local government were 

 usually below 3 percent. Thus in these two States, 

 total costs of local government were from 50 to 100 

 percent higher in the poor-soil areas in relation to the 

 underlying property, than in the counties with the 

 better land. 



Not all of the burden of local government costs, 

 however, is borne by local payers of the general prop- 

 erty tax. In recent years, particularly smce 1920, the 

 majority of States and the Federal Government have 

 developed a system of subventions, commonly known 

 as State and Federal aids. With the exception of 

 certain emergency-relief grants for maintenance of the 

 unejnployed or to prevent the closing of poor schools, 

 only a small amount of the Federal aids have gone to 

 the. direct assistance of the local imits of government. 

 The State aids, however, are now an established part 

 of the system for financing services performed by local 

 governments, and in practice these aids are usually 

 financed from sources other than the general property tax. 



The mam purposes of State aids are either to assist 

 or induce the local governments to attain higher 

 standards of services or to equalize the burden of 

 those services which are recognized as being of wide 

 public interest. The school equaUzation laws are 

 instances of a highly developed usage of the latter 

 principle. vSince these State aids have been grafted 

 onto an existing system of local finance based upon 

 general property-tax revenues, it is to be expected 

 that any equalization of burdens would be related to 

 the amount of taxable property or general property 

 tax revenue produced within the various units of 

 government. Thus, in any genuine^ progressive sys- 

 tem where equality of burden is attempted. State aids 

 wiU be higher in the poorer areas. This is illustrated 



by the experience of both Wisconsin and Indiana where 

 subventions amount to between 25 and 40 percent of 

 the total costs of local government in the poor land 

 areas, in contrast to an average of 10 jiercent or less 

 in the better rural coimties or in the industrial counties. 



Even with the assumption by State aids of the mark- 

 edly greater percentage of the cost of local government 

 in the poor land areas, taxes le\ned for the support of 

 local government have been much higher in the poor 

 areas than in wealtliier portions of the States. The 

 total of local levies in 17 northern Wisconsin coimties 

 for county, town, school district, and city or village 

 taxes in 1932 exceeded 3 percent of the true value. In 

 one county the average rate exceeded 6 percent. Total 

 levies in the better farming sections averaged about 2 

 percent. A similar difference of from 50 to 75 percent 

 of the rate of the better areas e.xisted in Indiana in 1931. 

 Preliminary investigation indicates that generally poor 

 counties still pay higher rates of taxes in spite of the 

 many Uberal and progressive systems of State aids. 



That this burden of taxation is greater than the 

 owTiers of property could or would bear is shown by 

 the high rate of tax delinquency and reversion in 

 northern Wisconsin and other cut-over areas. ^Yhile 

 tax delinquency has not reached such proportions in 

 Indiana as in northern Wisconsin, chronic tax delin- 

 quency has been most frequent in the poor-land areas 

 of the southern part of the former State. 



The high costs of local government in poor-land 

 areas, both to the people living in the territory and 

 to the remauidcr of the State, point to the conclusion 

 that cost of government is determined by what may 

 be termed the institutional pattern of the community, 

 and in an agricultural community the institutional 

 pattern is determined by the land use. In the Ameri- 

 can scheme of things, persons engaged in farming are 

 dispersed over the land, and government services are 

 supplied to them at or near their doors. This manner 

 of dispersal means, on the basis of the probaV)ilities of 

 past experience, a small population scattered over a 

 large area of new country. In the poorer sections ill 

 adapted to farming, this widely scattered settlement 

 seems to persist for a long time. 



This suggests, fiwthennore, that the only alternative 

 to expensive government in sparsely settled localities 

 is such a change in the use of the land as will modifj^ 

 the institutional pattern of the community. In some 

 areas this can be accomplished by increasing the popula- 

 tion to the point where roads, schools, and marketing 

 facihties may be used more intensively. In others, 

 there is probably no alternative to abandonment of the 

 area for agricultiu-al uses and turning the land to a more 

 extensive use, such as timber growing or livestock 

 grazing. 



