Studies in Local Government and Taxation 

 in Rural New Hampshire^ 



Harold C. Grinnell 



INTRODUCTION 



Mounting tax burdens have aAvakened the general public to the 

 problems of government and taxation. The activity of taxpayers' 

 associations and the adoption of such measures as the municipal 

 budget act of New Hampshire in 1935 are manifestations of this 

 awakening. Various groups are increasingly active in compiling sta- 

 tistical data for analysis in order to locate leaks and to efifect possible 

 economies in government. Rural leaders, themselves taxpayers and 

 in many instances active members of taxpayers' associations, recog- 

 nize the importance both of governmental services and of the weight 

 of the tax burden, and, accordingly, seek new approaches on which 

 to base a sound program for local budgets. A lower tax rate is not 

 the sole criterion of the success of their efforts. An evaluation of 

 government expenditures in terms of value received must be included. 



The significance of local government and taxation as a problem 

 in rural economy is apparent in that the property tax, a large fixed 

 cost of farm production, is the major source of revenue for meeting 

 expenditures of local governments. Local expenditures constitute 

 more than half of the total expenditures of state and local units of 

 government in New Hampshire. Furthermore, the services of local 

 government are vitally important to our rural economy. In the inter- 

 est of economy and from the standpoint of the importance of local gov- 

 ernmental services, farm people do well to look for efficiency in rural 

 government, to the support of which they contribute heavily. 



Tax Trends 



"Taxes assessed locally" is a term used in the annual reports of 

 the state tax commission to include property taxes, poll taxes, and 

 national bank stock taxes, all of which are sources of local revenue 

 and are included in the warrant of town and city tax collectors. The 

 local tax levy is not for town and city purposes alone but includes 

 taxes for school and village districts, for county purposes, and. until 

 1939, included the "state direct tax" on property. Inasmuch as the 

 property tax is such a large proportion of the "taxes assessed locally" 

 (95 to 97 percent), it is generally considered that taxes paid by towns 



1 Much of the content of this publication, but in a somewhat difiFerent form, was presented 

 to the Faculty of the Graduate School of Cornell University, June 1941, as a major thesis in par- 

 tial fulfillment of the requirements for the degree of doctor of philosophy. The author wishes to 

 express his appreciation to Dr. M. P. Catherwood and to Dr. T. N. Hurd of that institution for 

 their assistance in organizing and editing the material in its original form. 



