122 STATION BULLETIN 346 



Before 1910, except in 1903, money received by the state from a 

 direct tax on local property exceeded all other sources of state revenue, 

 but since 1909 the total of other sources of revenue has been of great- 

 er importance. The direct tax declined in relative prominence through 

 1938 when it was only 6.2 percent of the total state revenue, and then 

 in 1939 it was replaced by the tobacco tax. Furthermore, this proper- 

 ty tax collected locally and paid to the state has tended to constitute 

 a smaller proportion of the total property tax, particularly since the 

 early twenties. From 1924 to 1938 the direct tax was less than nine 

 l^ercent of the local property taxes, whereas in previous years it was 

 usually more than 10 percent. 



On the other hand, the amount of revenue received by towns and 

 cities from the state has exceeded the state direct tax except for two 

 brief periods, from 1920 to 1923 and from 1933 to 1937. This fact is 

 not mentioned here because either amount is contingent upon the 

 other ; on the contrary, the amounts of these revenues have passed 

 between the state and the towns entirely independent of each other. 

 However, there has existed some public interest in the balance of 

 these payments, and for this reason the relationship is mentioned here. 



APPENDIX 9 



THE RELATION OF SELECTED FACTORS TO VARIATIONS 

 IN PROPERTY TAXES AND EXPENDITURES OF - 



RURAL TOWNS 



Were it not for the fact that the state's subdivisions vary so ex- 

 tensively in area, poi)ulation, taxable wealth, miles of road, family 

 incomes, etc., these local units of government would assume a definite 

 pattern and cease to be an object of concern and investigation. The 

 existent departures from a normal situation are the major excuse for 

 state aid and supposedly are the foundation upon which state aid is 

 a])portioned. The attendant analysis attempts to depict some of the 

 relationships existing between selected factors, particularly popula- 

 tion and taxable wealth, and local finance. Inasmuch as this study 

 is concerned with rural situations, the sample represents only those 

 towns having a population of less than 2,500. With the exception of 

 a very few rural towns of peculiar status with which the writer is 

 familiar, the sample represents a normal variance. However, it must 

 be recognized that the present averages are not applicable to all 

 towns and cities. 



This study is concerned with the tax year 1938 (town fiscal year 

 ending January 31, 1939) and is therefore somewhat out of date, par- 

 ticularly for two reasons: first, the 1940 census of population has since 

 become available, and, second, the tax data are based on the last year 

 when the state received revenue from a direct tax on property. Some 

 of the material is therefore omitted but is incorporated in part because 

 the general relationships have not changed appreciably, and because 



