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CHAPTER IV. WTOI1K o1~' TilE FihisT CoMMIssIo~. Mi'. icennan was as good as his word, for he raised by private suhscriptiomi the money required to pay the expenses of the commission. It can not be said that the commissioners were paid for (heir work, but their clerk hire, postage, and traveling expenses were probably all pm'ovided for, and, with the exception of Mr. Kennan. lii nmsel f, sonic contribution toward remuneration for the expended ~~'as also immade. As secretary of the commission, Mr. Kennan p~~— pared the statistical appendixes which fill something like 100 pages of the report transimmitted to the legislature in 1899 and which represents a vast amount of research work as well as compilation of tables, aimalyses of ligures. and preparation of explanations and conclusions timat must have taken much the. rllhese tables are today of incalculable benefit to the student of the history of taxation in \Visconsiim, as iii nmany cases tile figures contained therein can be found in n~ other place. the main portion of the report to the legislature was prepared liv the llmren couumuiuissioncrs, Messrs. .Tones, Tcermnan, and Curtis. It is a I monk of 271; pages amid is Iii led froimi cover to cover wi lii I um— j)ortant and valuable inforimmation. All three members of the commission were lawyers of ability and they brought to the task of compiling and explaining laws timat. made up the taxing system of timis stale trained legal minds. The system was analyzed, its weak points uncovered and pointed out, and suggestions for improvement iii the umetimod of assessing property were mmmdc. As the report itself is available to the student. it is unnecessary to go into details lucre with respect to its contents. Meanwhile there ~~-ere others wlmo were studying the subject with equal interest and it became apparent that a united effort would be made to correct one of the most serious defects in the existing ssteni—undcrvaluation. The general belief that the corporatiomis —railroads, express, sleeping car, telephone, and telegraph companies were not taxed at. their true value was spreading and having its effect. It becammic apparent to thoughtful men that the assessed. valuation of all classes of property in the state would be raised with a consequent increase iii the amount of money collected in the form of taxes. But a mere increase in the revenues of the state was not the end soumglmt. rilax equalization, the collection from all classes of propc'rtv of an equal amount of taxes to be used in paying pubiic cxeumses, was lime aim of 1h1 the men who originally labored to bring about a dmilmige iii •thme taxing system. Should the taxes upon One class of propem'ty be increased, it was necessary that there he a (orrespondimig reduction elsewhere in order that real tax reform heattained. \Vhmilc not publicly stated in definite terms, this idea had run through the minds of every man, pri~'ate citizen and piml~1ic official alike, who had contributed to the work of preparing for a change. It is safe to say that, had it not been understood that tile uncoverin.g and assessment of large blocks of personal property and tile proposed increase in corporation taxes would result in a decrease in the taxes on real property, there would have been no pub-heinterest in tile movement. It was equalization of taxes timat interested taxpayers, not increased revenues. Wiuile the 'tax commissioners were working upon flue task set. for them, Gov. Edward Scoficid began to look into the oilier phase of the problem, the receipts and disburscnmcnts of the state. On Pebi'mia m'y 21, 1 S~)S, '~'I ic Mi Iwaumkce SCfl Li mmcl itmtm'~mm (cml au at't n'I e prepared by the governor on the state fir~aumccs wiuicim contained a clear explanation of the sources of revenue and the manner in which tue mmioney was expended. the governor cx pla med I ima 1; ii was a difficult mumatter to make a statement of tim is cimaracter because of the peculiar system of bookkeeping then in force in the state departunents. As a mat icr o. fact, there was no imum iformii systeuui of accounting, the books in each dcpart.nment being kept independently of those in every other departmmmcnL (by. Scofield's article wa~ the first clear explanation of the state's financial standing ever pubI isiied, and it. mummy 1 me added dimit it was also LI me last., 0 f course, the reports of state officers are regularly printed in book form and may be examined and understood by citizens who are familiar w'itim the business of the state, but the average ]ayman, even a 1)00k-keeper, will find some difficulty in comparing the figures from the several departments and arriving at a satisfactory understanding of the financial affairs of the state. As a result of Imis iiivestigations iii the business departmen~s, Gov. Scofield proposed two changes in the business methods of the state. hewas hinmself a business man and could not see any reason why a balance could not. be struck at any the that wom.ld show clearly and accurately the financial condition of the state, as well as the condition of each department that handled funds belonging to the state. Also Ime believed the legislature should be informed as to the prol)able needs of the state institutions at the beginning of each session in order that the appropriation miglmt he made intelligently. With these ideas in 111111(1 hei)roposed two reforms : A central system of accounting and the p1'eparatioml of a liudget to be presented to tue legislature at the opening of each session. Having worked out imis plans, he took ste1)S to carry them into effect. He prepared a budget on his own motion. I-Ic ascertained from the several boards the probable needs of the iimstitut ions over which they prcside(1; estimates were umade of the prol)abie expenses of the state departments for the coumming i)iennial 'term; the resources of flue state for the same period were given an.d the legislature was shown how, if the CX~CflSCS were to 1)0 kept within the limits of the state's income, it would be necessary to cut ~ommme of the appropria tions, or levy a tax to make up the 'deficiency. This budget, was incorporated into the governor's message. . Another feature of tile message was the proposition to establish a simplified central system of accounting. Gov. Scofield did not criticise past administrations for wimat he considered to be tile unbusiness-like methods of keeping tile state's accounts. On the contrary, he explained timat “with the ~practice of changing bookkeepers with each change of administration it has been deemed iumpractical for any secretary of state or state treasurer to undei'take, in the few years in which Ime holds office, to improve the systeuum.” But, hesaid : “I 'believe the tiumue Imas come wimen the stale bookkeeping should be revised and simplified. It is possible lime change can not be accomplished without extra help, as the bookkeepers in the departments naimied are kept fully occupied. I i'econmmend, therefore, that tile legislature consider the question of authorizing the temporary employment of one or more experts to take up the subject with the secretary of state and state treasurer amid formulate a new system.” He then explained at some length I lmc inadequacie5 of the existing method. While lme believed the state to be sommmetiming more timan a business enterprise, hestill nmamn— tamed flmat. the business o. the state in the transaction of whichm over $3,500,000 was Imandled annually, should be conducted on business Principles. When the legislature of 1899 convened, tile report. of tile tax commission was presented for the consideration of the members of that body. As has been said, this report is ,availahle to any one wimo wishes to investigate in detail the work of the commission, but, for the purposes of this review the recommendation of the coin-mission alone are of enough importance to bear reproduction here in an abbreviated form. As a preface to their summary of principal recommendations tile cOfllmissiofl said: “Imi presenting the following recommendations the members of the (omminmission desire to express their regret that the the and means at limeir disposal were immsumfficlent to enable them to elaborate any general or ('olmipreimemisive plan for revisiimg and improving the whole taxing systemn of the state. The vast extent and importance of the subject amid lime practical difficulties w'Imich stand in the way of any far reaching reform can hardly be appreciated by those who have not immade a special study of the subject. While the work of the present tax commission fails far short of what its members had hoped to accomplish, anti will probably he disappointing to nialmy, it is at least a step in the right direction amid may form a basis for more effective work along the. same hues Imereafter. For reasons which are stated in the introduction to this report no attempt has been made to draft law's embodying the recoinmendations noted below. If any of tlmenm meet with legislative approval. it will be a comparatively easy task to put them into the formu of laws. 1. The commission recommended that town taxes, exclusive of state, county amid school, h~ limited to 2 per ('emit of the assessed valuation. 2. Recommended that subdivision 13 of section 776. revised statmmtes, w'hicim conferred powers of villages on towmms 1mm certain cases, be repea led. 3. That the law authorizing the collection of a 1)011 tax be repealed. 4. That, with a view to preventing and remedying undervaluation by assessors, the general rc:isscssimmcmmt law be :mmmmcnded so that a reassessment can be commmimelhcd when uimder-vmmhumitiomi is simowmm, without proof' that injustice omi iimedfltlhity hmm'ms resulted ammd ~vitimout hiai)ihity to costs. 5. That the the for preparing the tax roll and turning it over to the treasurer be exteumded in towmms and villages to lime thui i'd Moimday in Decenmber : tlmnt the timmme for collecting the taxes he extemmdcd to March 1—the town aimd village treasurer being authorized to charge ri iwr cemmt froumi ammd after February 1 to Mardi i—amid that no extension tufter Mn relm 1 he gun mm ted. 6. Timat the entire administration of the tax laws he placed in the hu~nds, or mu t. h':ist, muuudcr rigid smm~ )('rvisioTm of' ':u ~ miii' mu ml disi lit West ,'4 I :mgeiuts of the state, to he u'Iuosemi amid to have 511(11 teuuuiu'e of othice timid comnpensatiomi vms to imm:ike t hmeimm virtual lv free ft'ommm the influences of 1)01 i ticn I or popnl:m r favor or (1 isl)le:m sure mmmiii emmmm file themmi to give thuci r entire the to ofllcm:ml duty : such :ugemmts to consist of a state ))ommrd or olilcer tumid such simi iom'd I mmmi I (' or dist m'ict of ifi'ers mis mummy heumecessmu ry. 7. That an inheritance tax be levied with respect to personal property on both len iai amm(T eohl:m tern I iumheri lances, at the rate of I per cemmt on the formmmer a mmd ~ pci' ccii t omm I he1mm Item', w I tim the exce' it Ion of $1 d( )O0 iii the case of lenin I and $200 iii the case of collateral immheritances ; the revenue to hepaid iii to t hestate I rca su i'y. “8. Corpora t ions. “Our work has led us to the u'ommi”lnsmoum that mill lime eom'poratinims which are taxed oh fIR' basis of' i'am'umlmigs om' aim mm uuuhiemige lmnsis ~ay relativel,y less taxes than other persomms mummd less than they \vonld pay omi the basis of value. “For the reasons stated in the report we are not lwelmai'ed eithem' to recommnemmd timat the systemmi of taxation he changed to the ametimoil of assessmneumt by a state board or to decide as to the specific rates of taxation wlmiclm should he fixed if the j mm'esemit mmmcl imod simoum Id be comm t I mmmmed. “(a) We recoiummmmcnd that the whole subject of lax:mtioim of qu:msipublic corporal iomms in' uumhly I mmvest igmul ('(1 cit Imer by a mommmmmui flee or by mu hoard of stmi Ic olhicem's lm:m vi mmg full lower to exa mum lime ~vi I miesses a mmd comum— pci the production of i)OOks mind papers. (h) We recommimend that if the present system of taxing railroads be continued a new and closer classification of rates hefixed for the purpose of preventing the inequalities wlmicim arise under the systemmi now in force. ''(c) That the l'uresent plamm of taxing railroads omi the basis of immile— age be discoimtimmued. “((1) Timat express commmpanies hetaxed either Oii lime basis of value of their property iii the state. immeluding the frnmmchuise. to be assessed by :1 state board or on the basis of their gross earnings. “(e) That legislation headopted preventing the eva~iomms of the l:uw' a~ to taxation, by sleeping car enimipanies.” There were t.imerefore, before tile legislature wimen it convened, the report of the ten'iporary tax commission, and the two propositions contained in any. Scofield's message—to establish the limetice of presenting a budget at the opening of every legislative session and to reformmi the bookkeeping lmietlmodS of the state. While thmi~ two latter propositions were imot, strictly speaking, taxation matters. they related to state. fimmrmnces and WCI'e by Ilmeir i'ma(.ui I'C SO chisei~' associated with the subject of taxatiomm timat they should iie considered at the sante timmme. There were also presented in the assen'mbl alone duirimmg lime session of 1899, fifty—timree bills relating
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