LOCAL GOVERNMENT AND TAXATION 75 



Small towns are not here characterized as such because of their 

 area but rather because of their small, sparse, and declining popula- 

 tion, and a correspondingly small amount of taxable wealth. A com- 

 parative analysis of the distribution of expenditures among rural 

 towns shows that the percentage of town payments expended for 

 roads is inversely related to the size of towns, whereas the percentage 

 of total payments paid over to school districts increases with the size 

 of the town. The proportion of payments consumed by state and 

 county taxes had little relation to the size of the town. 



Appendix 10 reviews a study of the expenses of 100 rural towns. 

 This inquiry excludes any payments of towns to other units of gov- 

 ernment, and involves only those payments used to meet the expenses 

 of the town as an operating unit. Likewise, property taxes refer to 

 that portion of the total tax which is levied to meet the expenses of 

 the town. 



In general the relationships found in this study parallel those 

 of the previous investigation reviewed in Appendix -9. Towns with 

 little population are also sparsely inhabited, and have experienced a 

 decline in residents. Moreover, they possess a small amount of taxa- 

 ble wealth which, however, is large relative to population ; thus, there 

 is a greater amount of assessed valuation per capita for small towns 

 than for the larger towns. 



Towns with a population of less than 400 spend less than one- 

 fourth as much as towns with 1,000 or more persons, but the small 

 towns spend about 50 percent more per capita. Likewise, the property 

 tax levy to meet town expenses is high relative to both population 

 and valuation. Also, small towns pay a smaller proportion of the 

 total property taxes to other units and retain a relatively large pro- 

 portion of the total levy for town purposes. 



The population of 18 of the 100 rural towns has declined more 

 than one half since 1880. In this group of towns expenses per capita 

 are relatively high, and tax rates average much higher than in towns 

 which have more nearly maintained their population. This phenome- 

 nal decline in population is not confined to towns which were sparse- 

 ly populated in 1880, a fact which indicates that the decline is the re- 

 sult of natural and economic incidertts. However, it is true that towns 

 scantilv populated in 1880 generally endured a greater percentage loss 

 of population through subsequent decades. 



Again, because there is a high correlation between population and 

 assessed valuation, these rural towns vary within rather narrow limits 

 with respect to assessed valuation per capita. Sorting towns on the 

 basis of this factor, assessed valuation per capita, e'ives little evidence 

 of consistent relationships except that towns with a small amount 

 of taxable wealth per capita have a higher average town tax rate. 

 Inasmuch as this measure is merelv a ratio between population and 

 valuation, it can be altered by a variation in either of its constituents 

 or both. If a hieh taxable wealth per capita results from a stable val- 

 uation in face of a declining: resident ponulation. its relation to town 

 expenses and other factors would be nuite different from what it 

 would be if the hieh ratio resulted from a risinsf valuation in the nres- 

 sure of a relatively stable population. The cause of the lo^^^ or high 



