Extent and Distribution of Urban Tax Delinquency
Law & Contemporary Problems
The general property tax has developed a degree of unreliability since i93o which has been particularly disconcerting to municipal governments throughout the United States. But whatever may be said of its imperfections, it continues to be the chief dependence of the local revenue system and, as such, has special need for an appraisal based on recent performance. The peculiar importance of this major source of municipal revenue may best be determined by consideration of its relation to the
... lation to the budget. It is, in the first place, a deficiency tax. The budget makers, in arriving at the revenue estimate for the year, customarily total the miscellaneous items, usually minor in amount, and then set the general property tax levy at a figure which will fill the broad gap to bring revenues into balance with appropriations. While this procedure is not tenable in those municipalities which operate under a rigid tax rate limitation, it is so generally the practice as to emphasize the necessity for stability and regularity in the inflow of ad valorem tax receipts. Not only is the general property tax depended upon to provide sixty per cent or more of the annual operating revenue in most municipalities, but in the past it has been rather universally treated, in the making of budgets, as a thoroughly stable source of income. Revenue estimates ordinarily included the full tax levy for the year, without thought of reserves for possible deficiencies in collection, and depended either on the receipt of delinquent taxes or on temporary borrowing to make up any shortage in the income from the current levy. Uniform budget laws in a few states, in fact, went so far as to make this procedure practically mandatory. Thus the typical budget system, as well as the local revenue system, was geared to the dependability of the general property tax. What might be called the hand-to-mouth existence of the average city also imposes the requirement of reliability on ad valorem taxes. Very few cities build up large cash reserves for operating purposes. Most of them depend on the current receipts of each year to care for the year's current eipenses, and the great majority find it 0 A.B., 1913, Lafayette College; M.A., i9u2, Ph.D., 1931, Columbia University.