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Mr. MORGAN. The only issue between you two is the amount of money that Chicago can raise.
Mr. HULL. That is it exactly.
Mr. JARMAN. That is a statement, because I know it is a fact. You have raised that question time and time again.
Mr. MORGAN. That is a legal question, isn't it?
Mr. JARMAN. Yes. He insists upon that matter. I know, and everybody knows that while the limitation is 5 per cent on the assessed value of property in Chicago and the sanitary district, the assessed value is not one-tenth of the real value.
Mr. HULL. I do not know about that.
Mr. MORGAN. It will be difficult for this committee to decide that without a legal proceeding.
Mr. PEAVEY. However, it is a very important point, and the thing I want to draw out by this witness and to get into the record is, if I am reliably informed, this: That the people of the so-called Sanitary District of Chicago are paying a flat rate of approximately 6 per cent of the average tax rate of all the cities in the Great Lakes district that are affected by this diversion. In other words, they are asking us to give them our water to save them the expense of taking care of their sewage, when their tax rate is only approximately 6 per cent of our tax rate.
Mr. Hull. It is not “our” water; it is everybody's water.
The CHAIRMAN. We have in the State of New York a State tax commission, and that State tax commission determines annually what percentage the assessed valuation bears to the real value of property throughout the State. For instance, they will give a country town in our county--we have been down as low as 60 per cent, 60 to 62 or 63—and gradually under our practice they have been required to raise it until we are now up to probably 80 or 90 per cent. That goes up in this way, and it has come up to me practically in this way: I represent half a dozen country towns which have been in a fight with the railroads. The railroad claims that it has been assessed 100 per cent, while the country towns themselves have only been assessed about 50 or 60. Now, what is your situation there? Do you have a State tax commission that tells what rate Chicago is assessed?
Mr. JARMAN. Yes; we have a county review board, and then we have a State commission board.
The CHAIRMAN. Do they make a report annually!
The CHAIRMAN. I mean showing what the rate of assessment is as compared with the real value?
Mr. JARMAN. I do not know about that.
The CHAIRMAN. You might get the whole thing in that way. You could in our State.
Mr. FREEMAN. They must have a board of equalization.
Mr. MANSFIELD. I served on such boards for 35 years, and I never in my life saw property assessed on the average of more than 50 cents on the dollar anywhere. The CHAIRMAN. I have obtained a witness who knows the facts.
STATEMENT OF MR. L. A. DUMONT, CHICAGO, ILL. The CHAIRMAN. State your name.
Mr. DUMONT. L. A. Dumont. I think I can perhaps throw just a little light on this State tax situation. The present statutes of Illinois provide that the assessed valuation for taxation purposes throughout Illinois shall be 50 per cent of the full value. We have in Illinois a State tax commission, and the duties and purposes of that State tax commission are to review the work done by the various counties in the State, to see that the provisions of the law are carried out equitably. That is the constitution, isn't it, Mr. Hull? Mr. HULL. I think so.
Mr. Wilson. We have done away with the old board, and that is the new one.
Mr. MORGAN. What per cent of valuation is that?
Mr. DUMONT. The rate is not determined by the State tax commission, but by the various counties, when they take into consideration the requirements of their various municipal governing bodies.
Mr. MORGAN. If that rate in Chicago is 2 per cent, as was testified yesterday, that is only 1 per cent, because it is on a 50 per cent valuation basis.
Mr. DUMONT. The rate varies.
per cent or thereabouts ?
Mr. MANSFIELD. And I think if they will look into it they will find they underestimated it.
The CHAIRMAN. We will have filed with us a statement by the mayor of Milwaukee showing just what it is.
Mr. MORGAN. That includes the maximum valuation that can be assessed—50 per cent for all purposes?
Mr. DUMONT. Under the law the assesor is supposed to determine what the full value is in the first place, then of that full value, as the assessors determine it, they can assess 50 per cent for taxation purposes.
Mr. JARMAN. Are you connected with the tax department of the city of Chicago?
Mr. DUMONT. I am connected with the Chicago Association of Commerce, but I just happened to know about this tax matter.
Mr. JARMAN. Isn't it true that the full valuation as returned by the tax assessor is about one-half of the real valuation of the property itself?
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Mr. DUMONT. I can not answer your question absolutely correctly, because nobody knows what percentage of the full value is returned for taxation purposes.
Mr. MANSFIELD. It is a question of judgment, too?
Mr. DUMONT. The provision of our constitution is so antique that the people would be fools to put in the real value of the property for taxation purposes.
Mr. JARMAN. That is the condition, isn't it?
Mr. PEAVEY. Do we understand that the proponents of this bill here from Chicago, in the numbers that they are here represented, the leading organizations, commercial and otherwise, of the city of Chicago, want this committee to undertsand that there is not one of them that knows what the tax rate is in the city of Chicago?
Mr. BEHAN. May I answer?
Mr. BEHAN. When the time comes to put in the evidence on behalf of the sanitary district in support of Congressman Madden's bill, we will furnish to the committee very comprehensive tables covering a large period of years, showing the valuations, tax rates, bonded indebtedness, and the maximum of tax and bonded permissions under our constitution. I would like at this time, though, to take three words and say this: The matter of tax assessments in our State is perhaps different from any other State in the Union, in this particular. We do not levy one flat tax, which is collected by the State or some one agency, but the assessments are made in each county by a board of assessors and reviewed later by a board of review, then equalized later by a State tax commission, formerly the State board of equalization, but in fixing the amount of the taxes each of our various municipalities or taxing bodies fixes its own requirements and fixes its own tax, provided they keep within the requirements or permissions of our constitution.
Mr. JARMAN. Does the Constitution govern the rate of taxation of anything except the counties? Does the Constitution govern the rate of taxation or the amount of taxes of any municipal corporation or city?
Mr. BEHAN. Oh, no; not the city, within the provisions and requirements and limitations as expressed in the Constitution of 1870.
Mr. JARMAN. What are those limitations?
Mr. BEHAN. It is too long a story now. We will provide the committee with all the information with regard to taxes at the next meeting.
Mr. PEAVEY. Are you a taxpayer in the city of Chicago?
Mr. PEAVEY. How many times a year are you allowed to pay your taxes ?
Mr. BEHAN. Just once.
Mr. PEAVEY. You get a tax receipt. Don't you know what the rate is?
Mr. Behan. I know the rate in my town. My property is in the town of Hyde Park.
Mr. PEAVEY. You are in the city of Chicago?
Mr. BEAHN. Yes; but we have about seven taxing districts in the city of Chicago.
Mr. PEAVEY. But you pay all of your taxes in one place, do you not?
Mr. BEHAN. Yes, sir. Mr. PEAVEY. And what is the rate in your taxing district ? Mr. BEHAN. My rate for 1923 was $7.72 on the hundred. Mr. PEAVEY. And that is on a 50 per cent basis? Mr. BEHAN. That is on the 50 per cent basis. Mr. JARMAN. My plan as proposed becomes more equitable in that matter, don't you see? I provide that they shall build these purification plants and take care of the sewage as the War Department might direct, and if they can not raise enough money equitably and under the law, the War Department would take cognizance of that fact and would not make Chicago do anything that they can not do. I do not fix the amount in here in my proposition. I leave that all to the disinterested position and action of the War Department. Now, another thing about Mr. Hull's bill. I would like to say this to the committee, that this disconnected way that I have presented the matter is in a connected way in the statement that I have filed, and under the arrangement with the committee, it is to be filed in the proceedings as I have written it. I simply ask you to read what we say in that statement.
Mr. O'CONNOR. Would you let me know one thing that may not be entirely relevant to what is in issue here? Are you a taxpayer of the city of Chicago? Mr. JARMAN. No, sir. Mr. O'CONNOR. A real estate owner? Mr. JARMAN. No, sir. Mr. O'CONNOR. Do you know what the total rate on real estate is in Chicago? What is the burden placed upon that real estate in the way of a rate?
Mr. JARMAN. I only know from my investigation of the matter, principally in the constitutional convention of the State of Illinois, and also only know from my general information with reference to tax matters, individually and otherwise. Mr. O'CONNOR. Your tax receipt ought to show, as suggested by Mr. JARMAN. Yes. My tax receipt in my city shows a tax rate of about 7 per cent on the assessed value.
Mr. O'CONNOR. I always thought that we were more heavily taxed in New Orleans than any other place.
Mr. JARMAN. But that is less than 1 per cent of the value of my property, the actual value of my property.
Mr. HULL. Yes; but Mr. Beahn has given his tax receipt that runs over 31 per cent. Mr. JARMAN. He did not use the assessed value. Mr. HULL. He said 74 per cent on a 50 per cent valuation. Mr, BEAHN. $7.72 on the hundred.
Mr. JARMAN. He did not say that his property was assessed at real value. That is, I mean assessed for its valuation.
Mr. MORGAN. In order that we may get this tax matter settled without taking up a whole lot of time, as I understand it, later
they are going to file an exact statement of the rates and assessments, etc., and it does not seem to me that we are getting anywhere with this discussion.
Mr. O'Connor. I was only expressing what Mr. Peavey had expressed before, my surprise that these prominent gentlemen from Chicago could not tell the tax rate in their own State.
Mr. MORGAN. I understand the situation is that they assess on a 50 per cent valuation, but nobody is able to tell how much taxes they paid on its real valuation.
Mr. Jarman. I can tell you how much we are paying on the real valuation.
Mr. MORGAN. I would like that, Mr. Jarman.
Mr. JARMAN. I have got a farm that I paid $30,000 for. The taxes on that last year were $245.
Mr. MORGAN. A farm for which you paid how much?
Mr. BEHAN. May I make just a short statement, so that the record will not show that none of the gentlemen from the State of Illinois are not familiar with tax conditions? So that the committee can intelligently see the tax situation in Illinois, it is absolutely imperative that there be in this record the schedules and tables. It is the only way you can intelligently understand it, for this reason. As some one has said, we are operating under a constitution adopted in 1870, which a large part of the press in Illinois and a great many civic and reform societies have clamored for years to have revised, on the theory that it had become antiquated. Mr. Jarman happened to be a member of a constitutional convention which sat for approximately two years and drafted what some few of us thought was a very good constitution for the State of Illinois. We thought that that clarified the tax situation and made it a twentieth century proposition, but unfortunately, when that constitution, which Mr. Jarman had a hand in making, was presented to the voters for ratification or disapproval, it was beaten to the tune of about eight to one, largely because of the improvements which we had sought to make in our tax situation.
Mr. JARMAN. Only about three to one.
Mr. BEHAN. Oh, eight to one. In the town in which my property is located, Hyde Park, which is a part of Chicago, the rate, as I have said, is $7.72 on the hundred dollar valuation. In Evanston, a suburb or just outside of Chicago, to the north, and which is in the Sanitary District taxing area, the rate there is this year about $15.50 a hundred, and the rate varies in every taxing town in the city of Chicago. So that for this committee to intelligently understand the situation and be able to determine whether or not the Sanitary District is spending its money fast enough, that table ought to be, and with your permission will be, in this record.
Mr. MORGAN. May I inquire how much you pay a hundred?
Mr. MORGAN. And what is the assessed value, as compared with the real value of your property?