LOCAL GOVERNMENT AND TAXATION 



55 



leaving only one unit, the county, to spread a property tax over an 

 area larger than a town. 



The term "equalized valuation" as used in New Hampshire is 

 another matter. For those years when the state legislature is in ses- 

 sion the tax commission computes an "equalized valuation" for each 

 town and city. This is accomplished by adding to the locally assessed 

 valuation of each town and city the income from interest and divi- 

 dends upon which the interest and dividends tax is levied, the par 

 value of national bank stock and insurance stock owned by the resi- 

 dents, savings banks deposits, and the value of railroad property in- 

 cluding stock, right of way, and buildings. This total equalized val- 

 uation remains unchanged for two years at a time. It is the base 

 for apportioning the county tax (and the direct state tax until 1939) 

 among towns and cities, and for computing state aid for schools. 

 Nevertheless, property taxes collected within the town are levied 

 against the locally assessed property. 



The local inventory was 84.2 percent of the total equalized valua- 

 tion for the tax year 1940 (Table 10). About 10 ])crcent of the total 

 equalized valuation, or two-thirds of the amount other than local in- 

 ventory, is represented by deposits in savings banks. The equalized 

 valuation was 19 percent greater than the local inventory. This is 

 the smallest addition to local inventory since the procedure started in 

 1926, other years ranging between 22 and 27 percent. 



Table 10. The Items Which Make Up the New Hampshire "Equalized Val- 

 uation," WITH Dollar Values and Percentages, Tax Years 1940 

 and 1941* 



Items 



Dollar 

 values 



Percent 

 of total 



Local inventory 



Deposits in savings banks 



Railroad property 



Income from interest and dividends 



National bank stock 



Insurance stock 



Equalized valuation 



$655,868,472 



100.0 



* Annual report of the state tax commission, 1940. 



The equalized valuation is 21 percent greater than the local in- 

 ventory in the case of cities (Table 11). In the case of seven urban 

 towns, and for the remaining towns, it is 17 percent greater. The 

 difference as shown here is less than would be expected because in 

 many rural towns the people have very little in the nature of savings 

 bank deposits or of the items other than local inventory which make 

 up equalized valuation. However, equalized valuation does tend to 

 equalize the burden of county taxes among the towns and cities by 

 placing a heavier tax on units which have relatively large amounts 

 of the specified types of wealth not included in the local inventory. 



