• . 5 *

• 'SEGTION V V ' : : . \ . ; •

TAXATION AND FINANCE

11; Revenue and Expenditure

12. Finance Administration •^

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lUvenue and Expenditure

RECENT TRENDS IN STATE TAXATION*

THE DECADE from 1935 to 1.945 marks a consqlidation of the results of the revo­

lution in state tax systems which had taken place during the preceding fifteen years. The nature of this revolution, was the abandonment of the general property tax, which prior to 1920 had constituted almost the sole source of state revenue, and the Substitution for it of a diversified and bal­anced state taxing structure of licenses, specific excises, net income, and death taxes, and the general sales, tax.

The development of these new sources of revenue during the 1920's and the early 1930's has been so fiilly analyzed by Pro­fessor James W. Martin, in an article in The Book of the States, 7943-44, that re-icapitulation here seems unnecessary. It is sufficient to point out, that, by the end of 1937, al! for^-eight states and the District of Columbia levied motor vehicle licenses, gasoline taxes, and taxes or monopoly revenues on the sale of alcoholic beverages, all states but Nevada imposed death taxes, thirty-three states had enacted net income taxes, t\venty-three collected general sales

o taxes, and ninet 2en states taxed the sale of tobacco prodiictls. By that year," also, near­ly every state had made some consolida­tion of taxing functions in a central agency;"

: although many important taxes were still collected, by. seiDarate?^ agencies in some

, states. The relative stability of state tax,struc-

turies from 1937 \/tp the present day is •Prepared by George H.-Watson, Executive

Director, Federation of Tax Administrators.

demonstrated by the small number of changes in the major state taxes enumer­ated above..At the end of 1944, thirty-two states—one less than in 1937—still im­posed net income taxes; the number of states taxing tobacco products had in­creased to thirtyrone; and unemployment compensation payroll taxes had spread to all of the forty-eight states. Otherwise, the number of states imposing the major taxes listed above had shown no change.!Cer­tain important shifts in emphasis, how­ever, occurred during recent years, and these will be discussed.

. L E G I S L A T I O N ' .

State tax legislation during the bienni-um 1943-44 reflects the conflicts between' group pressures favoring the reduction of taxes and those advocating maintenance of tax rates and accumulation of surpluses toprovide for the uncertain postwar years.

The movement for tax reduction was most successful in the income tax field, because of the pressure of exceptionally high \vartime federal income tax rates. Outright repeal of the income tax occurred in' only two states (South Dakota and West Virginia),' but eight' other states (Galifbfnia7Towa, Maryla^ New York, Oregon, Pennsylvania, and Wisconsin) enacted or extended reductions in income taxes, either by actual readjust­ment of the rate schedule, or by the provi­sion of a flat percentage deduction, or by granting credits. New or enlarged deduc­tions for medical expenses were allowed

175

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176 THE BOOK OF THE STATES

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' by eight states, and in several states j5er-sonal exemptions were increased and other special deductions provided. Two other important enactments in the income tax fie£4 should be mentioned. The first is the adoption By Delaware in 1943 of a 1 per cent personal gross income tax, patterned after tfte federal victory tak. This was the

. only tax of this sort levied by a state, since the Indiana gross income tax is not com­parable; it was, however, allowed to ex-JDire atj:he beginning of 1945. The other important state income tax enactmerit is the comprehensive revision of the New York corporation tax law, which occurred in 1944. This law, which is legally a fran­chise tax and economically a net income , tax, is now levied on all corporations at the same rate for the privilege of doing busi- , ness in the year for which the tax is paid. It embodies the so-called "double alloca­tion formula," using a; special fornriula for the allocation of investment income. ' S e v e r a l states reduced or revised their gift and inheritance taxes in 1943 (i.e. Oregon reduced its gift tax, South Dakota reduced its inheritance tax, and Washing­ton, revised its gift and inheritance tax schedule). < ;

Th^g^enera^trend in excises was,, and still is, toward rate increases and the adoption of new taxes to offset income tax reductions ..and other revenue declines caused by wartime shortages. The highly productive general sales tax is an excep­tion to this pattern, however, although several 1945 legislatures are seriously con­sidering the adoptioft of a general'sales tax • in states where there is none. The only. significant sales tax legislation during the past biehnium was, a reduction of the rate in California from 3 per cent to 2.5 per cent In 1943. Several states enlarged or restricted exemptions from "the tax^ .the most important change, beiijg the adop­tion qf a substantiail food exemption in ' West Virginia. Gasoline and; motor fuel taxes ^similarly showed little/change. No rate changes of importance pecame effec­tive during the biennium, and there was no significant broadening or limiting of exemptions or refunds. Mo.st\ legislation

• was intended prinriarily for the purpose of strengthening administration of the tax, although several legislatui"essdealt with the

problem of taxation of sales to the federal government arid its instrumentalities.

The trend toward new taxes and in­creased rates was most noticeable in the luxury excises on liqupr and tobacco and the. taxes on admissions and amusement and garribling devices. Following the pat- " . tern of other recent years, new tobacco, taxes were levied in three states (Delaware, Florida, and New Mexico), and taxes on V • alcoholic beverages were enacted or in­creased in Alabama, Washington, Utah, Florida, Michigan, Tennessee, and Vir­ginia. A particularly interesting develop­ment was the adoption in 1944 by Mis- . sissippi, a dry state, of a so-called "bootr. leg" tax,.of 10 per cent on the gross pro-, ceeds of the sale''at retail or wholesale of all tangible property "the sale or distribution of Which is prohibited by law." The clear intent of.the law is to collect the tax on the sale of liquor by bootleggers, who had al­ready been paying the 2 per cent general sales tax administered by the State Tax Commission. ._ _ : .

Property tax legislation in recent years has been directed primarily toward im­provement of administration and special treatment of special classes of property. There has been a broadening of home­stead and other exemptions, which is of, concern to rriany *s a danger to the ade­quacy of local revenue sources. On the other hand, a tendency was noticeable to narrow the field of governmental im­munity by taxing federal property wher­ever the federal Congress permits' it. Classification of property taxes with any degree of completeness has not taken place in enough States so that a trend in this ~7" direction can be cleai-ly defined, and none of these instahces has occurred in the last biennium. Gross receipts taxes on public . ; utilities continued to increase in numberj , With four states adopting new taxes in . , 1943.; Taxes on' pari-mutuer"-t)ettmg~at~~"7 horse races have become increasingly popu­lar up to the time racing vyas banned be-; cause of transportation shortages, and a j constantly increasing number of states tax slot machines, pin-ball machines,'and other / amusement and garnfbling devices. New oil production taxes were levied in Ten- . nessee and Louisiana, while a similar tax in Illinois was declai^d uijconstitutional.

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V REVENUE AND EXPENDITURE.. 177

• No sunimary of recent tax legislation will be complete without reference to the numerous, tax reductions and concessions g r a t e d to the members of the armed forces ^nd veterans! Virtually ,all states have enacted into their laws the" provisions of the Soldiers and Sailors Relief Act adopted by-Congress, and most of the states have gone much further in granting substantiah exemption or postponement with regard to property and license taxes: In the in­come tax field, most states have exempted virtually all service pay from income taxes and have not considered mifitary assign-

. "ment within the state to be Residence for income tax purposes..

REVENUE

The revenue jtrends predicted in The Book of the States in 1943-44 have developed very much as anticipated. Income and general sales tax fSvenues continued to increase steadily throughout the biennium, although much of the increase in sales tax revenues may be considered merely a measure of inflation.. \ •'•

Substantial declines in gross gasoline tax revenues from the level of previous years have continued throughout the "bi­ennium, although revenues in the calen-

. dar year 1944 appear to have been largely stabilized at the 1943 level. Gasoline tax refunds, on the other hand, have increased even a§ gross revenues were declining, showing both an increase in the use of gasoline for farm, and industrial purposes, and loss in efficiency of administration of refunds because of serious \yartime per­sonnel shortages and travel difficulties.

Tobacco tax collections continued to rise until the second half 3f the calendar

vyear 1944, when the cigarette shortage be­gan to affect state revenue from this source. Alcoholic beverage revenue, oh the other hand, after falling off 19 per cent in 1943,' increased substantially in 1944 with 'the" granting of a holiday for beverage alcohol manufacture. Whereas distilled spirits and wiffe. tax collections were falling off in 1943, beer tax collections continued to rise; this rise did not slacken in 1944.

•V ADMINISTRATION

The trend in state'tax administration in recent years has been largely toward fur­

ther consolidation and integration. In the past biennium, three states (Illinois, South Dakota,, and New Jersey) have consoli­dated fiscal activities. In Illinois, the Tax Commission was abolished and its revenue . \ functibns, together with those of the De­partment of Finance, were assigned to a newly created Department of Revenue. In South Dakota, the collection of major ex­cises, which had formerly been scattered \ over thriee departpi'ents, was consblidaicu into a.Division of Licensing in the De­partment of Finance. Further integration was achieved by appointing as director of' licensing the dire^or of taxation, who ad­ministers all other important taxes through the Division of Taxation. The creation of a new ^Department of Finance and Taxa-^Jjn in New Jersey did not directly affect the tax administrative organization, but consolidated it with other fiscal ifuncticfns in one over-all department. Refererree^. may also be made to the new constitu­tion for Missouri, adopted on February 27, 1945, vyhich provides for thetstablish-men^qf a unified Department of Revenue to execute the previously widely scattered reven .le functions of that state. Important taxes, hitherto separately administered,, were assigned to the major taxing agencies in Arkansas, Louisiana, Michigan, Penn­sylvania, and Wisconsin during the bien­nium. Functional integration within a uni­fied department occurred in many states. \. Interstate cooperation in tax adminis­tration continued to progress. The co­operative auditing program for sales taxes entered its third year in the fall of 1944 with a program of cooperative . auditing in New York City. State tobacco tax ad­ministrators, through the National Tobac-^ CO Tax Conference, secured the coopera­tion of the War Depiartnient in prohibiting' sales of state tax-free cigarettes to civilians Jby post exchanges and similar institutions. -In 1944, a comprehensive study of state taxation of interstate airlines was under­taken by several association? representing state tax officials, in copperation with the tax research staff of the Civil Aeronautics Boai;d. Work on model uniform' statutes, . uniform report forms, iriterstate exchahge of information, and other similar coopera­tive activities continued with increasing momentum during the two-year period.

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178 THE BOOK OF THE STATES

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STATE AGENCIES ADMINISTERING MAJOR TAXES * •' ' . / As of January IV1945 ,

Stait Central Properly Income Sales Gasoline

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Alabama Dept. of Revenue * Arizona Tax Commission Arkansas . . . . . . . Corporation Com.

• Tax Supervision Dept,» , California Bd. of Equalization

'Colorado. . .! . . . . Tax Commission Depf. of "Revenue

Connect icut . . . . Tax Commissioner Delaware . ' Florida Comptroller

Georijla Gom'r of Revenue Idaho. . . i . Tax Commissioner

Dept. of Finance Illinois Dept. of Revenue

r-lndiana:.;."... i Bd. of Tax Com'ra.

Iowa ; . . . Tax Commission K a n s a s . . . . . . . . . Cogi. of Rev. 6* Tax. Kentucky. . . . . . . Dept. of Revenue Louisiana. Tax Commission

Maine'. Bureau of Taxation ^~" Bd. of Equalization

Maryland. . . . . . < Tax Commission. Massachusetts;. , Com'r Corp. 6* Tax. Michigan . . . . . . . Bd. of Equalization

Tax Commission

Minnesota Com'r of Taxation . Mississippi.. Ad Valorem Cbm'rt>

Tax Commission Missouri Tax Commission

Bd. of Equalization Montana . . . . . . . . _ Bd. of Equalization

Nebraska Tax Commissioner Bd. of Equalization

Nevada; Tax Commission New Hampshire. Tax Commission New Jersey Dir. of Taxation

New Mexico Tax Commission New York , Tax Commission North Carolina.. Coni'r of Revenue •

Bd. of Assessment North Dakota... Tax Commissioner ^

Bd."of Equalization-^

Ohio.' . . . . . . . . ." . . Tax Commission^" Bd. of Tax Appeals

Oklahonia Tax Commission Oregon..; -Tax Commission Pennsylvania.... Sec'y of Revenue

Rhode Island. . . Tax Administrator South Carolina.. Tax Commission South Dakota... Director of Taxation

Bd. of Equalization Tennessee . . . . . . Sup't of Taxation''

Bd. of Equalization

Texas ComptroUcr U t a h ; . , ; . . . . . . . Tax Commission Verniont Com'r f Taxes VInl ln ia . . . . . . . . Tax Commissioner-

.'Washington....; Tax Commission -West Virginia... Tax Commissioner Wisconsin. Com'r of Taxation ". Wyoming . . . . . . . . Bd. of Equalization

Dept. of Iffivenue Dept. of Revenue Dept. of Revenue Tax Commission Tax Commission Sup't Mot. .Veh. Divi Com'r of Revenue Com'r of Revenue Com'r of Revenue

Franchise Tax Com'r Bd. of Equalization Bd. of Equalization

Dept. of Revenue Dept. of Revenue Dept. of Revenue

Tax Commissioner . . . . ' . ••. Com'r Motor Vehicles Tax Commislsioner • •; " Highway Dept.

Comptroller Com.'r of Revenue Com'r of Revenue Tax Commissioner •'.. Dept. Law Enforce.

Dept. of Revenue Dept. of Revenue .......^ Treasury Dept. Auditor Tax Commission Tax Commission Treasurer Director of Revenue Director of Revenue Director of Revenue Dept. of Revenue . .................. Dept. of. Revenue Collector of Revenue Collector of Revenue Collector of Revenue

. Bureau of Taxation

Comptroller . C o m p t r o l l e r Com'r Corp. &• Tax. . . . , . . . ; . . Com'r Corp. &• Tax. ..". "... Bd. of Tax Adminis. Secretary of State

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Com'r of Taxation . Com'r of Taxation

Ch., Tax Commission Ch. Tax Commission Com'r Motor Vehicles

Auditor Auditor Dept. Oil Inspection

Bd. of Equalization •."....• Bd.''of Equalization; >

; ' . . . . . . . Dept. Agril 6* Insp.

. . . . . . . . . . ; • . . . . . * . . . . . . . . . . . . . . . . .• . Tax Commission ..• • ' . . , . '.'...... Com'r Motor Vehicles

\. i . . Die. .of Taxation Com'r of Revenue Com'r of Revenue Com'r of Revenue Tax Commission Tax Commission Com'r of Revenue Com'r of Revenue Com'r of Revenue Tax Commissioner Tax Commissioner .'\uditor .

. . ^ , .Tax Commissioner Tax Commissioner

Tax Commission Tax Commission Tax Commission Tax Commission 4. Secretary of State Sec'y of Revenue ..-..•. . . . . . . . . . Sec'y of Revenue

. . . : Tax Administrator >• Tax Commission Tax Commission

• Director of Taxation Div. of Licensing* .

Com'r Finance 6* Tax. Com'r Finance fie Tax.

Tax Commission Com'r of Taxes Tax Commissioner

Com'r of Taxation

•ki; Tax'Commission

Ta:' Commission Ta*. Commissioner-

Bd of Equalization

Comptroller Tax.Commission Com'r Motor Vehicles Div. Motor Vehicles

Director of Licenses Tax Commissioner Com'r of Taxation: Highway Dept.

• • The Tax Supervision Department is a'divi^bn of the Corpo­ration Commission with distinct 'duties in proi>erty tax ad­ministration.

• Prepared by the Federation of Tax Administrators.

l" The Ad Vatorera Congimlssioher is a member of the State Tax : Commission. . ' - , •. •

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REVENUE AND EXPENDITURE ' t79

STATE AGENCIES ^ADMINISTERING MAJOR TAXES—Continued

Motor Vehidt Tobacco. Qealh

Dept.-of Revenue -Sup't Mot. Veh. Divr. Com'r of Revenue

Dept. of Revenue Tax Commission Com'r of Revenue

. Dept. of Revenue Treasurer Com'r of Revenue

Motor Vehicle Dept. , • ••• • Controller

Dept. of Revenue ' '. Inherit. Tax Com'r Dept. of Revenue

. Cojn'r Motor Vehicles Tax Commissioner Tax Commissioner . Com'r Motor Vehicles Tax Commissioner # Tax Commissioner

Com'r Motor Vehicles Beverage Dept. Comptroller . Com'r of Revenue Com'r of Revenue Com'r of Revenue

Dept. Law Enforce. . . • • •-•••• ^ ^ Commissioner Secretary of State Dept. of R^enue Attorney General' Treasury Dept. Bd. of Tax Com'rs Dept. Public Safety Tax Commission Tax Commisaibn Highway Commission Director of Revenue Director of Revenue Dept. of Revenue Dept. of Revenue Dept. of Revenue

\ Collector of Revenue Collector of Revenue • County Sheriffs

Secretary of State Bureau of Taxation Attorney General .

. Coni'i: Motor Vehicles J.... Comptroller '• Dept. Public Works Com'r Corp. 6*.Tax. . Com'r Corp, 6* Tax. Secretary of State . , Dept. of Revenue

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• • • . . " — • • ' • ' • • _ / , . • •

Secretary of State ; . . Com'r of Taxatipn

Com'r Motor Vehicles Ch. Tax Commission. • Ch. Tax Commission

Com'r Motor Vehicles . , . , . . . . . . , . Treasurer

:Registrar Mot. Veh. . Bd. of Equalization

,. Dept. Roads 6* Irrigi Tax Commissioner

, Secretary of State . . . . . . . . .....r.. Com'r Motor Vehicles Tax Commission Attorney General .

I Com'r Motor Vehicles . . . . . . . * . . . /". . . Dir. of Taxation Com'r of Revenue ' Com'r of Revenue Com'r of Revenjjie. Tax Commission Tax Commission " Tax Commission Com'r of Revenue . . . . . . . . . . . . . . . . . . . . Com'r of Revenue Highway Com'r- , Laboratories Dept. Tax Commissioner

Registrar Mot. Veh. Tax Comtnissioner Tax Commissioner

"Tax Commission Tax Commission Tax Commission Secretary of State . . . . ; . . . . . . Treasurer Sec'y of Revenue Sec'y of Revenue Sec'y of Revenue

•• •• tt" . ' • Tax Admi&istrator Tax Administrator Tax Administrator Highway Com'r" Tax Commission Tax Commission Secretary of State Div. of Licensing Director of Taxation .

' Com'r Finance 6* Tax. Com'r Finance 6* Tax. Com'r Finance 6* Tax.

. • No. of ' . Liquor- Aiencits . Slait

Bd. of Liquor Coht. 2 . . . . . ; . .Alabama • Tax Commission 3 ....'. Arizona

Com'r of Revenue . 2* . . . . . . .Arkanga*

Bd. of Equalixation 4 . ' . . . . .Califbmla

Dept. of Revenue -3 . . . . . . . .Colorado

Tax Commissioner 2 ... .Connecticut Liquor Commission 4 ' Delaware' Beverage Dept. , 3 .Florida Com'r of Revenue 1 . . . ! . . . . .peorf l la Dept, of Law Enforce. 4". . ' . . . . Idaho Dept. of Revenue ' 3 . . . .\.... llUnols Alcoholic Bev. Com. 4 Ijndlana

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Tax Commission -3 ; . . . . . . I o w a Director of Revenue 2 Kansas Dept. of Revenue 1 .Kentucky Collector of Revenue . 3 . . . . . . . Louisiana

Liquor Commission 5 Maine

Comptroller 3 . . . . . . .Maryland Com'r Corp. 6* Tas. 2 . .Massachusetts Liqijbr ControL^om. 5 . . .Michigan

Liquor Cwitrol Com. 3 ...... Minnesota

Ch. Tax Commission 2^ ......Mississippi

Dept. Liquor Cont. 7 Missouri

Liquot ControlBd.. 3 . j . ; . .^Montana

Liquor Control Com. . 5 . . . . . . . . Nebraska

Tax Commission 2 . . . . . . . . . N e v a d a Liquor Commission ' 4 .New Hampshire Dir. of Taxation ^ 2 . . . ; . .New Jersey Com'r of Revenue 2 . . . . .New.Mexico Tax Commission 1 . . . . . . . N e w York Com'r of Revenue 2 . ;North Carolina Tax Commissioner 5 ...North Dakota

Tax Commissioner 2« .Ohio \

Tax Commission 1 ... . . . .Oklahoma Liquor Control Com. 4 . . < . . . . . .Oregon Sec'y of Revenue 1 ....Pennsylvania

Tax Adnrinistrator . I . . .Rhode Island Tax Commission 2 ..South Carolina Div. of Licensing 4 •...South Dakota

Com'r Finance 6* Tax.' 2<J . .Tennessee

\

Highway Commission Comptroller Comptroller Liquor Control Bd. . 3 .. .-...Texas Tax Commission Tax Commission Tax Commission Tax Commission ' 1 . . . .Utah Com'r Motor Vehicles Cord'r of Taxes '' Com'r of Taxes . Liquor Control Bd. 3 . . . . . . . .Vermont Div. Motor Vehicles .............. i...''i., Tax Commissioner . Tax Commissioner 2 . . . . . . . .V irg in ia

- • • • ' : . ' • . ' • . • ' , « - • " • • • • • •

Director of Licenses Tax Commission Tax Commission . Liquor Control Bd. 3 Washington Road Commission .Tax Oimmissioner • Tax Commissioner" 2 ...West Virginia Motor Vehicle Dept. . Treasury Dept. Com'r of Taxation Treasury Dept. 3 . . . . . .Wisconsin Secretary of State . . . . . . . . . . . . . . . . . . . . . Inherit. Tax Com'r Liquor Commission / 5 . . . . . . .Wyoming ' — • . , . ' . ' . " ' ' . , , ' ' ' . ' t

' The Tax Commissioner anU the Board of Tax Appeals to- forined by Deputy Commissioner of Finance & Taxation. gether constitute the Department of Taxation. • Director of Taxation has been appointed Director of Division

•"OfSce of Superintendent of Taxation unfiJied; duties per- . of Licensing. •

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STATE REVENUE IN 1944*

THE SLiGHt rise in total state revenue to S6.5 billion during the 1944 fiscal year^

was bjought about entirely by increases in , tax collections. Aid from the federal

government decreased somewhat, and other non-tax incorrle of the states re­mained about the same.

Total state tax collections for 1944 rose ,' to a new high figure of about'S5.4 billion,

5.8 per cent above the 1943 total. Exclud­ing revenue from the unemployment com­pensation tax, collections were.$4.1 billion, or only 3.7 per cent above 1943,

Motor vehicle fuel tax revenue again de-clined, but at a lo^yer rate than from 1942 ta 1943, and motor licenses were about 1 per cent above the 1943 figure. Thus, in coptrast with 1943, these war-vulnerable tax'sources for 1944 offered much less, drag against the continued gains in collections frqm the greater number of other taxes.

-^These dollar amouhts and the per cent changes are shown in Figure 1 ' ancD in Table 1, and figures for the pasf eight years are given in Figure 2 and Table 2. The 1944 data-are preliminary.

• .» S f ATE,TAXES AND W A R

Production for this country's offensive on allvvar froiits lay behind-the new record of state tax collections. It seems likely,

. however, that tax revenue will increase at a much slower ratCj or even decline, by June 30, 1945; one indication is that the Federal Reserve indexes of industrial pro­duction have fallen off from a peak reached in the late faH of 1943, aftd another indica­tion is that the Departrnent of Commerce index of income payments proba.bly reached its high in February, 1944.

'Data contained in the Bureau of the Census scries on State Finances are for the most recent fiscal years ending between July 1 and the follow­ing June 30. Thus, for each of five states, the fiscal year,considered here is the one that ended

• in the second half of the calendar year 1943. * Prepared in the Governments Division (E.

R. Gray, Chief), Bureau of the Census, by V. J. Wyckoff. ,

•Motor Vehicle Fuel Taxes. As has been mentioned, the return, from the universally used gasoUne tax continued to decline . during the 1944 fiscal year, though at a slower rate than from 1JP42 to. 1943. In­deed, in eight states, collections were larger during this, past fiscal year than in 1943'. Heavy movements of, freight by trucks, crowded buses, constant use of private automobiles in war centers lacking suffici.ent public transportation, busy air lines—all of these uses of motor fuel helped somewhat to counterbalance the rationing of gasoline and the "scrapping of motor vehicles. Ho>»?'ever, it seems probabl(vthat the demands of mechanized warfare on a grand scale will force a continuation of the decline in civilian consumption of motor fuel and even accentuate it during the 1945 fiscal period. The dollar amounts on a state-by-state basis for this and other'sales taxes are givepi in Tables 3. and 4 on pages . 186-189.

Motor Vehicle and Operator Licenses. Al­though gasoline tax revenue was less,state collections from motor licenses for 1944 were, as shown in Table 4, even slightly above the 1943 figure, declines in twenty states being more than offset by an increase in the majority of states.. Tiiis stability was Sdmewhafsurprising because cars are going to the scrap heap and on to the steel furnaces, with no factory replacements for civilian purposes except rationed trucks. . However, predictions of motor vehicle scrappage have turned out to be overly pessimistic, and people today are .driving cars as long, as they hold together;. also, with money in the pocket and with the out­right . need for transportation, many a license is being renewed when due, even though there is the chance that the car might become unusable within the twelve months following. , Alcoholic-beverage Sales Taxes. Taxes on the

sale of alcoholic beverages constituted the only category with collections above $100 million, which reversed an upward trend

180

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REVENUE AND EXPENDITUFIE r

181

of several years, as shown in Figure 2. This change resulted from the growing in­fluence of the full conversion of distilleries to industpial alcohol in October, .1942, particularly noticeable in Kentucky and Missouri. With dis^illin^ terminated," it was but a matter of time until warehouse supplies began to be depleted, which in turn led to rationing and hoarding in re­tail trade. It is possible that during the 1945 fiscal year alcoholic beverage sales taxes will again bring larger statue revenues, because supplies will be renewed from dis­tilleries permitted to operate for civilian consumption during August, 1944, and undoubtedly buyers of liquor are urged more by the money in their pockets than restrained by the high prices resulting from federal and state excises.

Corporation Income Taxes. In contrast with imposts orK. motor fuel, motor licenses, and alcoholic beverage sales, most -taxes gave higher yields in 1944 than in 1943. Of taxes with collectjions over $100 million, the most conspicuoiis gain—26 per cent-^was made by taxes on corpora­tion incomes. Among the states which , gave, corporate income tax figures separate from individual income, eight slates had increases of over 25 per cent; in contrast, collections from this base were less than the prior year for Kentucky, Montana,

Oregon, Rhode Island^ and Virgirii^. An estimated_separation of a corporals figure for Maryland also showed decreased col­lections. It can be seen from Table 3 that collections in New York state alone made up about 32 per cent of all separately re­ported corporate income tax revenue.

It is significant to note that the rate of increase for total corporate income-tax revenue was about the same as 1943 over 1942; it was considerably less than the 42 per cent increase of ,194^ a bo v^ the 1941 sum. Several' conditions accounfe-for this chapge in rate despite the coritihued war-jf. time business activity. In particular, there were declines in construction of Army camps and new war plants; there were higher production costs during the 1944 fiscal period; war contracts were renego­tiated when profits were large; deduction of the federal income tax was permitted by a majority of states using this base; and the repeal of the corporation income fax in South Dakota, as well as'rate reductions in a half dozen other states,, restrained the

. tax yield from corporate net incomes. Individual Income Taxes. The gain in in­

dividual income tax collections wias 15 per cent over the 1943; figure, "slightly le?s than the rate of change of 1943 over 1942. It will be noticed from Figure 2 that, since 1939, revenue from this source has been

182 THE BOOK OF THE STATES

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larger each year, though growing at la slower pace than that of the corporate in­come tax.- On a state-by-state basis, the largest increase (157 per cent) in 1944 over 1943 was experienced by Arkansas, close­ly followed by New Mexico; in c'ontrast, Delaware, Iowa, New Hampshire, Ore­gon, Wisconsin, and Maryland (estimated segregation) had smaller collections in 1944. than in 1943.

Only a few modifications of inlcome tax laws were made by legislatures meeting in 1944. Mississippi reduced rates, and sev­eral states exempted varying amounts of income of members of the armed forces and auxiliary services. But previous legis­lation was effective, such as the repeal of the income tax laws in South Dakota and West Virginia and reduced rates in Cali­fornia, Iowa, Maryland, New York, Ore­gon, and Pennsylvania. These changes, together-^'vudth^deduclipns^gOedem taxes ^ in a nilmber of states and'rather liberal state exeinptions, have kept the revenue of thi&source from advancing as rapidly as, has the national income in the last three years; ; . • ; • ' . • .

General Sales and Related Taxes. Collec­tions from the general sales, us'e, or gross receipts taxes continued to climb, with an increase of 7.5 p)€:r cent over 1943, which continued the gain of 6-pe;r cent of 1943 over 1942. Though only twenty-five states levied this tax, it proved very profitable, even when compared with the universal motor fuel taxes, and offered about $300 million more than the widely used corpora­tion income tax. Unprecedented purchas­ing power," combined with prising prices, continued to make the general sale^.tax a generous source of state income. vSome recent ""changes in laws have been made, such as Delaware's enactment of the 1 per cent gross income tax (effective January 1, 1943) and California's rate reduction from 3 per cent to 2.T per cent.

Tobacco Products, Insurance Premiums, and Utility Gross Receipts Taxes. Tax collections from^these three bases were higher at the close of the 1944 fiscal year than in 1943, as is shown in Table 1; toba.cco gained considerably more than from 1942 to 1943,•, but insurance premium taxes and public utility receipts taxes had smaller gains. The sale of tobacco products-^predomir

nantly cigarettes—to civilians was ra­tioned by the largest companies; however, so far as the evidence of tax collections is concerned, the rationing was not severe; nor did people stop smoking rather than turn to other brands during short periods of scarcity. New tobacco taxes in Delaware, Florida, and New Mexiccf added substan­tially to the revenue of these three states, and to the nation^]: total.'

Favorable conditionsibr insurance com­panies continued to be reflected in larger collections 'from the taxation of gross premiums. Wartime demands for ihe various services of" railroads and 'other public utilities brought a gain of jabout 9 per cent in 1944 taxes, noticeably less than thie 16 per cent of 1943 compared with 1942—a possible forecast of the leveling-off of industrial production.

Property Taxes. Revenue from the tradi- ! ,tional property tax continued the slow

downward movement which had been" started in 1943. Although there are no indications that there will be many revi­sions in state property tax laws diiring'the war period, the postwar years will prob­ably record an increasing relegation of this tax source to local units of government.

Unemployment Compensation Taxes. In ab­solute amount the payroll tax, which is imposed by the"federal government and by the laws of every state, easily led the list, with collections of $1.3 billion. Be­cause the money is deposited in a federal trust account, "states frequently do not emphasize this levy as a part of their* tax systems.' Correlated as are the collections from this tax with business activity, the increase of 12.5 per cent over 1943 may Well mark a peak coincident with that reached by industrial production within the twelve months from July, 1943, to Jiine, 1944. Wisconsin led the list with a gain of 79 per cent over 1943; six other states had collections from 31 .to 43 per cent above the 1943 figur^^.—In spite of the continued gain of unernplpyment compen­sation revenue, nineteen states received less Jhoney during the 1944 fiscal year than.

^Occupations cdvered by unemployment com­pensation contributions received about two-thirds of all wages and salaries paid in the United States. See Social Security Bulletin, May, 1944,. p. 44. , ; .

^V.

REVENUE AND EXPENDITURE 183

in 1043, iand of these nineteen: states, Delaware, Massachusetts, /New Hamp­shire, and South Carolina experienced the second' consecutive year of declining, con­tributions. ' '

During palendar. 1943, vear-risk contri­bution provisions were incorporated in the unemployment compensation laws of ten states, adding to the amounts collected by those states ifrom employers Whose pay­rolls expanded greatly during the war period.

Other Taxes. The general franchise or privilege tax on corporations continued to give dependable returns, with collections in 1944 about 7 per cent above the previ­ous high of $107 million in 1943. Alcoholic beverage licenses again declined slightly,, reflecting further contraction of civilian business. Hunting and fishing license col­lections gave way as men entered the armed services and restrictions, continued on the purchase of ammunition and the use of gasoline for.pleasure driving.

The.variable collections from death and gift taxes showed a slight gain in the total during 1944) the resulfin "part of gains of several million dollars in California, New Jersey, and Pennsylvania; about half of the states, however, received smaller revenue from these sources ^ Severance tax col­lections were decreased by a decline in Minnesota and'. the invalidating of the Illinois crude oil production tax. *

A FEW STATE TAX COMPARISONS

Of all the states, Florida had the great­est per cent increasi^ in state tax collections as compared with the previous year—32.1 per cent. The main increase occurred in the group of taxes on the sale of selected •commodities aiid services. Specifically, al­though the gasoline tax was partially re-, .sponsible,for the increase, the more im­portant explanation is that a cigarette tax became effective at the beginning of. the fiscal year and the taxes on pari-.mutuel betting (chiefly at the Hialeah race track) were six times as great in 1944 as in-war-restricted 1943.

Other states showing considerable in­creases, together with the per cent increase and the main taxes responsible (the un­employment compensation tax was a, fac­tor in each case), are as follows:

Washington, 19.5: general sales, alco­holic-beverage

. . . •' . ; .sales" W i s c o n s i n , 18.3:,corporation, in*

coiiie ; New Jersey, 17.0: licenses • • N^w .York, 14.4^: corporation iit- ' ^

com^, pari-mu-X • . • L a e l s • • /

California, 11.1: individual income, corporation in­come /

Louisiana, 10.9 f various sales items . About a third of the states suffered tax

* decreases, the two outstanding, percent­age-wise, being Nevada, 10.4 per cent,'and .Wyoming, 7.8 per cent. V

. EIGHT YEARS OF STATE TAX COLLECTIONS

Changes in domestic and foreign affairs" during the past ei^ht years-have been so pronounced that it is ?worth while to note the effects upon state tax collections. In Figure 2, based on Table 2,. the totals of tax revenue for the fiscal years 1937 through 1944 are given, with the collections from eight specific sources selected on the basis, of volume and general fisca:! importance.

It can be seen that, the fiscal year ended in 1940 marked a turning point for five of the eight taxes; the tempo of action in the/ European war increased over a wide area during the first half of this period. The entry of the United States into war in the

-middle of the 1942 fiscal period did not ap­preciably influence t\it rate of change of these taxes.except for revenue from motor vehicle and operator licenses, which de­clined a few thousand from the .1941 amount. By June 30, 1943, however-, gaso­line rationing.had made itself felt, particu-lairly in the eastern coastal states, and col­lections from this nationwide tax . were about 18 per-cent below the 1942 level.

Of the eight taxes in Figure 2, the tax on corporation net income showed the great­est change, over 220 per- cent, from a low. of 31 -4 million iri 192g^tq about $429 million in 1944."* A comp'&fi^n of those

'Fiscal year ended March 31, 15W4; compared with fiscal year ended June 30, 1942.

^Unemployment, compensation taxes are: not fully comparable during this entire period because not all of the states were •collecting this tax from emplpyers prior to 1938. :•

J/

ev

184 THE BOOK OF THE STATES r~-r /

e?-

4 ChANGF,.S IN STATE TAX COLLECTIONS. s I BY TOTAL AND SELECTED SOURCES: 1937-1944 \

'uHEMwJoYMBrrV COMPENSATION •

CCNCRAL SALES, ' USE, OR

CROSS RCCCIPT* . "-'•'-•'-'-•^••^"-rv" MOTOR VEHIClEi:

rilEU SALES ^•

CORPORATION it: ^IMCOJME^ , - j ' ;

MOTOR VEH'ICLI''

AND OPERATOR ; LICENSES ^..,.'.

TNOIVIDUAL'I-?i;?i • INCOME; . '.vfc > ; r ^ #)' ^---•><-•. v.*,'-;;.

ALCOHOLIC BEVERAGE S A L S PROPERTY I w i j i *

" -• '*.''^?5'*"-/'

DEATH AND CIFT

; i S f ; „' laar is3s ins is4o i94i is42 I M 3 . ^ ^ ^ • W ^

.a . Bicau9( of u r k * d d i f f a r t n c a s in doUar aaounts for tti* 'i;'.'Xl;if '- various ta iaa in t h i s chart , and In ordar to a ip lua lza .<if-''^>i ,. tha ra la t lva chanies , -a aao l - loRar i tha ic s ca la i s usad; ; ''* ..'»' „:.'-v^ \ a<)ual varticaX dlstanca-.reprasents.equal parcant chansa ?i1 -&: ?>!r.?r;V''-

U. S. Deparlmcne of Commerce ifi\-r."fi:',.'\^:;ii'f"V.'i^':'i' Bureau of the Ceniuj

Other changes is als6 made clear by the use of the'^semi-'logarithmic scale; the almost parallel lines for general sales, individual income, and unemployment compensation indicate their concomitant increase along

wi th war-induced activity. In contrast wi th the line of marked advance for cor-poratloji income taxes is the relatively steady yield, the states received from the property tax source. .

For the 1944 fiscal year there is a noticeable commori attribute of the col­lections from - the e%ht tax sources of. Figure 2: The lines on the chart straighten out; and declines and gains are less pro­nounced.

During these eight years, the rise in state tax collections from all source's was about 60 per cent. This eight-year change should be compared with a doubling of the Department^f Commerce index of in-

conic • payments and the Federal Reserve index ;of industrial production during the same period. A less pronounced, rise oc-

•^ curred in the Bureau of Labor Statistics, index of cost of living, which went from about 103 in 1937 to ;:124 for the .first quarter of 1944. All of these gkins offer a contrast: with the growth of total popula­tion of the forty-eight states, which in-creased^by only about 2 per cent from 1937. to 1940, and with the war-induced de­crease' in civilian population, which fell 3.2 per cent between April 1, 1940, and November 1, 1943".

Generally speaking, the state ta;c. sys­tems and rates have been: changed but little: during the past few years, except for .the imposition of the unemployment com­pensation tax in the twelve remaining states in 1937. With such stability of laws, it almost necessarily follows that a niarked increase in. industrial production and-.income payments,: as well as a rising price level, would lead to larger state tax collections. It seems logical to conclude that when and if basic economic indexes show a downward trend, state tax collec­tions will lose much of the, impetus which

' has driven the sums upward at rates sub­stantially above, that of pqpulation growth. The. other basic influence on the trend can be fundamental changes in state tax laws arising from intergovernmental relations, particularly from federalrSt^te relations. ^

A I D RECEIVED iFROM O T H E R

. 'GOVERNMENTS '*

• Other than tax. collections, the largest part of 1944 state revenue came, as usual, from grants made by other governrrients, chiefly the federal. In spite, of increases in

,1944 in amounts granted %; the federal government for old-age assistance; and for roads necessary to the" war effortj sharp decreases in other types of'aid produced a noticeable decline in total federal aid from the $815 million total of 1943. Decreased amounts were received, for war-worker training, for nondefense highways, and for aid to dependent children.

.v'The following tabular summaries of state rev-.<^qnue and taxation (pages 185-191) were prepared

by U. J. Wyckoff in the Governments Division, Bureau of the Census.

•.g^.

I':3^ii.v;

• /

REVENUE AND EXPENDITURE 185

•••'- T A B L E 1 • :•.

STATE REVENUE, BY SOURCE: 1944, 1943, AND: 1942

Amount Collected \ , Per Cent Distribution: (in millions) . Per Cent Change Taxes 1944

, : r - ^' , >—. s,-. ••• ' O — '- — s 1944*^ • .From . From Total •\-UTtem- —Unem-

.(^preUmi- . 1943 • 1942 .i Revenues, ployment ployment :^- nary) 1943> 1942^ tQ 1944 to 1943 1943 Camp. Tax Comp. Tax

Total Revenue $6,280 $6,114 ' . . . . . 2.7 100.0 . . . . Taxes ' -; • , . ' . • . • • - . • • . • . . • . . . . ; . .

Including unemployment- ' . ' ' * ; V,:..., compensation $5,387 5,094 4,975 5.8 2.4 Sl.t 100,0 ' . . . .

Excluding unemployment compensation. ., 4,068 3.923 3.899 . . 3.7 , 0 . 6 62.5 75.5 100.0'

• Sales andrgross receipts . . ! . . -2,160 2.152 ' 2,219 0.4 ^ 3 . 0 / 34.3 ' 40.1 53;i General sales, use, or gross ,

r e c e i p t s . . . . . . . . . 721 / 671 633 7.5 6.0 10.7 13.4 17.7 Motor vehicle fuels. . 6 9 1 " 777 . 942 — t l . l . —17.5 12.4 12.8 17.0 Alcoholic b e v e r a g e s . . . . . . 267» 280 . ; 256 —4.7 9.4 , 4 . 5 5.0 6.6 Tobacco p r o d u c t s . . . . . . . . 158'- 141 131 124 7.6 2.2 , , -2 .9 3.9 Insurance companies. 125' 120 113 4.2 6,2 1.9 2.3 3.1 Public utilities. 125 115 99. 8.7 16.2 1.8 2.3 .3.1

. O t h e r . . . . ' . . . . . . . . . . . . . / . 72<i 48 45 .50.0 6.7 ,8 M 1.8 Licen-ses and pr iv i leges . . . . . .685 670 ' 686 2.2 —2.3 . 10.7 12:7 16.8

Motor vehicle and opera- » - t o r . . . . . , . . . . . > . . 398 395 431 .8 —8.4 6.3--. " 7.4 9.8

Corporations in general. . . 114 107. • 88 6.5 21.6 l . t 2.1 2.8 Alcoholic beverages 54 55 56 —1.8 —1.8 0.9 1.0 / 1 . 3

• Hunting and fishing 23 23 24 . . . —4.2 0.4 0.4 0.6 " O t h e r 95 91 87 4.4 4.6 1.4 1.8 . 2 . 3 Individual income 337* 293 ' 249 15.0 ,17.7 4.7 6.3 8.3 Corporation income " 429 340 274 26.2 24.1 5.4 8.0 10.5 ,

.Property 2 4 3 ' 258 271 —5.8 —4.8 4.1 4.5 6.0 Deathandgi f t 112 109 112 2.8 —2.7 1.7; 2.1 2.8 Severance. . . . 71 75 ' 62 5.3 21.0 1.2 1.3 1.7 Other, except unemployment

compensa t ion . . . . . . . . . . . •'. 30 26 25 15,.4 4.0 0.4 , p .6 ' . 0.7 Unemployment compensa-. tion« 1,319 • 1,172 1.076 12.5 8.9 18.7 24.5 . . . . . . Aid received from other ,,N

governments . . ; . , • .836 810 . . . . ; 3.22 13.3 " . . Earnings and miscellaneous. . . . . . 350 329 . 6.4 5.6 . ; . . ; . . ! . . . . — • — • _ : — L — . ;—,_ . .—. .—A. ; ™ . ^ — . — . .

.» These amounts consist of actual coUections and estimates • states. for,the fiscal years of the respective states ended within the ° IncludefrMaryland racing and amusement licenses. twelve months prior to July 1, 1944. The extent of estimates ' Includes taxes on corporation income for seven states wh,ere • included is shown at the top of Table 3. segregation was not available. See Table 3. ••

•> These amounts were collected during the fiscal years of the ' Includes the Florida tax on chain stores and the Indiana tax ,; respective states ended within the twelve months prior to? on polls.

July 1, 1943, and 1942, respectively.. 1; * Data for unemployment comipensation taxes represent net • • Includes licenses from alcoholic beverage businesses in three collections deposited in state clearing accounts. '

r

• a » :

r T A B L E 2 - ' . . . . • . • • . . . , . . • . . : / . . ; • ' • • • . . . •

STATE TAX COLLECTIONS, BY MAJOR SOURCE: 1^37-44* (Dollar amounts in millions)

Tax Source 1944'- 1943 1942 1941 1940

J . 1939

l i ••

193S 1937

Total Tax CoUections • i ; Including unemployment compensation $5,387 $5,094 $4,975 $4,507 $4,157 Excluding unemployment compensation 4,068 . 3 , 9 2 3 3,899 3,606 3,313

General sales, use, or gross receipts. . 721 671 633 575 499 Motor vehicle fuel sa les . . ; 691 . 7 7 7 942 913 839 Alcoholic beverage sales. 267 280 256 216 193 Tobacco product sales. . . . . . . • . . : . . . . . . . . 1 5 8 141 131 106 97 Motor velilcle and operator l i c e n s e s . . . . . . . . 3 9 8 395 431 434 387 Alcoholic beverage l i c e n s e s . . . . . . . . : . . . - . 54 ; 55 56 56 ' ; 62 Individual i n c o m e . . . . . . . . . . . . . . . . . 337 293 249 225 206 Corporation income. 429 340 274 ' 197 155 Property. . / : .^.. . . : ' 243 258 271 268 260 D e a t h a n d g i f t . . . . . 112 109 . U2 118 113 S e v e r a n c e . . . . . . . . . 71 75 62 -S3 . 5 3 Other, except unemployment compensa^

t i on« . . . . . 5 8 5 " 530 482 ; 445 449 Unemployment compensation tax. . . 1,319 1,172 1,076 901 - 844

$3,884 3,085

440

8or "174

60 . 364

54 197 •> 134 b 259 133 AT

422 799

$3,834, 3.132

447 777

.175; 55

. 3 5 9 52

218b 165'-244 142 58

440 702

$3,360 3,013 434 722 177 54

349 44 199b 157'' 292 116 49

420 347

Preliminary, See Table 1, footnotes c-f, for.minor incom-parabilities in 1944 of four specific taxes.. The division of local shares between individual and. corpora­tion income is an estimate.' Includes taxes from the following sources: insurance gross

premiums, public utility gross receipts, paxi-mutuels, adinis-sion and amusement sales, soft-drink sales; licenses for cor­porations in general, alcoholic beverages, hunting'and fishing, occupations, chain stores, amusements, and race tracks; poll, documentary and stock transfers, and nyscellaneous taxes.

• f l s * ^ .

• 1 • • • • '•

flW

drM •-m

TABLE 3 ?

STATE TAX COLLECTIONS, BY MAJOR SOURCE AND/BY STATE: 1944*

(Dolia^ amounts in thousands, except per capitas)

- ," ' _. Sidle r ,

' N u m b e r of s t a t e s us ing t a x • . . . T o t a l . . . . . . . . . . . . .

A m o u n t r e p o r t e d . . . , : . . . . . . . ' A m o u n t e s t i m a t e d

/ A l a b a m a . . . . ; . ; . . . , . A r i z o n a . . . . • . ." . . . . • . • . - . • , . • . ' . . . ; . . .

'^ A r k a n s a s . ; . . . . . : S C a l i f o r n i a

C o l o r a d o . . . . . . . ! . . . . . . . . . . . . C o n n e c t i c u t

D e l a w a r e . F l o r i d a . . . . . . . . . . , . .

Georft ia . . . . . . . . . . . . . . . . . . . . . . . I d a h o . I l l i n o i s . . . r . . . . . I n d i a n a

• ' . . I o w a . . . . . • . . . . . . • . . . ' . . . . ^ . . . . ; K a n s a s . . . . . . . . . . . . K e n t u c k y . . . . . . . ; L o u i s i a n a

• M a i n e . . . - . . • . . ; . M a r y l a n d . , . . . . . : . . . : . . . . . . .

' ^ M a s s a c h u s e t t s ; . . . . . . . . . . . . . . , . M l c h i ^ n . . . . . . . .

•;. M i n n e s o t a M i s s i s s i p p i . . . ; ' . . . , . . . . . . ; . . . . M i s s o u r i . . , . . . . ; M o n t a n a . . . . : ;

• ^ , ; ; [ . , ^ ' , • ; , • . : _ _ - ; ; • ' • ' " ' • • ' - " • ' . , • .

. Tolal

Amount

48 . $5,386,543

5,379,433 ' 7.110

; 72.470 29,733

. 47.991 ^ 554.411 "

46,647 86,575

13.819 . 80,345

74.712 16,823

289,064 131,918 ;,

76 ,094 . 58.012 59.861

.112 ,382 30.515 7 2 . 7 4 0 ' '

167.003 244.871 114,126

54.469 k ' 105,415

. . 18,658

Per Capital

;J42'.58

42.53 ! .05 j

26.66 52,22 27.65 70.34 43.71 49.52

50isi 39 .93 , 25.10 35.55 38.22 38.99

33.42 34.56 23.48 •48.51 39.01 36.68

40 .80 45 .54 . 45.19 27.28 29.91 39 .70

Sales and - Gross

Receipts (Table 4)

• 48 $2,159,998

J: 2,157.739 1 2,259

38.467 . 14.864

28,349 214,426 •

23.070 26,091

5.952 45.292 32,697

5.961 "' 181.450 .

70,298

39,932 28,691 25,028 49.197 10,373

. ' •22 ,579 k

39.664 128,140 37.580 31.563 52.152

\ .7.194

Licenses (Table 4)

• 4 8 $685,079

681.815 . 3.264 ;

8,193 ;, 1,968

-5,297 26.935

5.135 10.211

5.183 . 15.414

5,709 .1,240

. 2 9 . 4 0 1 14.694

14,987 7.147 6.302

10,067 5.595 7,529''

50.470 39,576 10.382 5 . 2 3 9 "

14.961 1.640

^ _*'

Individual Income'

33 "< $336,870

336,870

3,787 3,496 3,793

48.323 , 6 , 4 4 3

1,103

V5",98i 2,664

6,401 4,971 : 4 .410 5.050

" 9 . 5 8 6

25.872 .

"iV.io? 4.799

11.302 1.347

^ - : • •

Corporation Income^ •

33 $428,978

428,978

3,110 ( ' ) •

(0 . 67,671

(') 12,760

1.846

1.322 2.125 3.352

. 4 ,950

1 ,074 '

14",676 — 5.866

• ( ' )

1.237

Property

43 $243,200

241,633 1,567

5.862 5.153 . 3 .688

15.046 5,031 1.684

2,959 5.027 1.893

123 « . 7 . 1 1 3 '

- -1 76 3.306 6.840 8.592 5.275 3,748

11.077 13,357 10,040

886 4.559 1.720

Death and Gift"

• 47 $112,207

112,207

156 39

193 10.310

. 1,426 4,001

• 253 1,577

159 85

5.481 1,345

. 1.757 543

1.502 " 789

760 1.643

7,205 2.891 1.645 • 72

1.693 1,029

Severance

23 $70,644 -

701.624 20

• 533

i",357 553

33

,1 "iii 6 7 ' '

•'' '.60 15.126

' 606 8,690

355

" 9 6 6

• ; - > ! . > . ^ ^ •

Other Taxes^.

23 $30,116

30,116

451

' .967 404

203i

' ' 3 6 8

""'i 295

237

' " ' 6 2 121

- ' : - : • ^

Unemploy­ment

Coinpeur ' satipn

48 . $1,319,451

1.319,^51

11,911 4.213 5.314

171.147 5.509

31.828

1.323 14.136

: /{4,73S 3,013

72.542 38.468

11,416 11.229 11,999 18.611 8,509

} ,27.360

^ 31,404 60,301

* 19.544 5,568

20,748 . . 3,525

• , ' : • • • •

•^t

DH^PV ^m.

N e b r a s k a . . . ; •'fr Neviada ; V . Niew Hampshire .

Ne\jr 'Jersey.. , . Neir^ M e x i c o . . . . .

. . New Yorlc. .

North Carol ina . . North Dalcota. . Obloo O l d a h o m a . . . . : . . O r ^ o n . . .

. PehnsylTania . . .

Rhode I s l a n d . . . . South Carol ina. . South D a k o t a . . . T e n n e s s e e . . . T e x a s . . . U t a h . . . . ; . . . . . . ,

00 Vernaont •>> Virginia

W a s h i n g t o n . . . . . West Virginia .. W i s c o h a l n . . . , . . . . W y o m i n g . . . . . . . ;

.28.375 k 6.884"'

15.141 -> 184.906

21.396 739.157

128.4291' 20.293.k

283.165 83.131 54.893

401.960 ..

34.253 48.942"^ 15.986 k 74.'967 . 182.250. 28.581 k

12.444 73,916''

144.310 65,188

163,974 8.238

24.13 52.70 33 .40 45.31 43.65 S9 .40

38.37 37.82 41.47 41.82 46.81 43.35

49.31 27.35 29.34 26.60

. 29.12 48.98

39.37 26.69 75.74 37.63 55.67 34.95

,13.218' ' 1.867

5,764 28,8&9 12,246

168.934

51,770 10,125-

164,309 44 ,973 13.297

105.396

10.715 25,515'' 12,«a9 33.667 74,498 12.937

• 4.190 29.046 94,989 44,219 30/567

5.009

2,070' ' . 1.1751'

3.347 33.023

2.454 77.588

17.691 k 2.496 k

43.909 k 9.019 8,017

8 ; , 9 2 6 ;

6.705 2.646 -2,050 k

12,536 18,766 .

2.257

3 . 0 ^ 1 2 . 6 ^ k 8,900 7.981,

16 ,670 , 1.568

678

i' .234 102.182

11,425 1.511

' *5'.S23. " 8,028

4,820 8 5 1 ,

1,729

"2.427

930 6.159

' " ' i66 ' 18.593

137.400

24,614 i 848 i

• . . . . . ! •

6,278 i 6.906 j

66,470 I

Jl38J 9,44f

2231 3,671

.1.3 i s

785 7,662

43,830

6.178 1.387

937 27,622

2,618 1,253

'^~l;825k 4,496 ;

•9,268 37 «

5,035 o

177 1.378

28.091 2,3221'

579 5,989 5.015

158 14,143 . 70*

80

" s i i 12.070

81 19.059

1.049 38

^ 3 . 0 5 2 829

1.405 16,629

1,652 226

82 979

1.753 227

194 7 4 4 '

1,683 434

2.525 50

923

V.965 95

; (P). 99

31.889 »924

26 177

1.017

20 19.640F

33

5

"•846

"309

"136 1.598

367 1.600

249 575

10

5.212 2.400 3 .603

83,302 1.820

213.101

20.022 779

62,627 8.502

17,145 125,658

15.043 5,977

681 20.871 25.^55

6.172

2.308 10.035 33.297 11.715 37,632 . i .S41

7.

• 3ased on population estimates as of November 1. 1943. .,• ^ Taxes on unincorporated business, when measured by net income,- are classified with

"corporation income." " Includes $1,276 thousand Rift tax reported by twelve states; California reported $548 .'

thousand and .Wisconsin $286 thousand. <*• Includes poll tax collections.: Although nine states reported collection from state poll taxes,.

in only, the following eight states is a poll tax imposed as a franchise prerequisite: Alabama.; Arkansas. Georgia. Mississippi. South Carolina. Tennessee. Texas, and 'Virginia. Several of these eight states do not have their poll tax collections, presented in this table because the tax is locally coUevted and •retained. ' '

• Including states for which data are not reported. ' Included with taxes on individual income.. . - ' , « Delinquent. • ^ The crude oil production tax was declared tmconstitutional on March 21. 1944; of the

S2.419 thousand collected under the act. $67 thousand reprejent unprot«Ssted collections; ' Includes taxes on polls.' -i . . ' i Delinque'at taxes on polls. •- ^ -* Prepared, in the Governments Division (E. R.'Gray. Chief). Bureau of the Census, by V. J. Wyckoff.

k Not entirely complete but.'except for the case of Sojith Carolina, apparently only small amounts are missing. . . ' •

. ' On-banka aiid finance companies only; see footnote e. Table 4. for collections from'licenses on corporations in general. ' , ;.

•° Documentary and stocktransfer. ' . • . . • • 0 All amounts designated as preliminary by state officials; data for certain, other-states-are

preliminary also. - • -~ •• : ' " The tax on intangibles (other < ian corporate loans and public loans), and on corporation ^

capital stock'or franchise was not re-enact^, p Not available for this report, 1 Income tax, not including the tax on financial Institutions, repealed effective DeAmber 31,

1942. . . . o , . ' I n c o m e tax law repealed effective for the calendar year 1942; represents ts x from Income

earned prior'to January I. 1942. <= - ' P Levied bn car companies and motor vehicles; no other property tax levied for state for 1944

fiscal year. ,

• 1 ^ .

\ -

WW J T ll^.

. r '\\

'•J:

r~ ' ^ ' ••

1 GO 0 0

• _ / .• T A B L E • 4 . . • ' • ' . ' . • •

SALES AND GROSS RECEIPTS AND LICENSE AND PRIVILEGE TAX ^COLLECTIONS, BY STATE: 1944*

• (Dollar amounts in thousands)

, . ' ' ' • • H ' " * ' -

. . . . • • • . *

• ". '"State .,

N u m b e r of stages using t a x * . . Total

A m o u n t reported A m o u n t estlriiated • • • • •

A l a b a m a . . . — A r i z o n a . . A r k a n s a s . . . . . . ^. C a l i f o r n i a . . . . . . . . . . . . . . . . . . C k > l o r a d o . . . . C o n n e c t i c u t . .

D e l a w a r e . ; . . F l o r i d a . . . . . . . . ; .*. . .- . . Georftta I d a h o . I l H n o l B . . . . . , . . . . . , I n d i a n a . . .

I o w a . . . . . K a n s a s . . K e n t u c k y . \ L o u i s i a n a . ^ ! . . . . . . ' . . . ; . . M a i n e . . . V . r ^ ^ - r . , M a r y l a n d . ,

M a s s a c h u s e t t s . . ; M i c h l i ^ a n . . . . . ' . ..-. . Minnesota.. .. M i s s i s s i p p i . . . . . . . ; M i s s o u r i M o n t a n a . .

- Total.Sales , and Gross

, Receipts

48 •• $2,159,998

2,157.739 2.259

.^8.467 14.864 28 .349

214.426 23.070 26.091

; 5.952 45.292 . 32.697 .

; 5.961 181.450

70.298

39 .932 28.6'*l5 25,028 49.197 10.373 -22.579 J

39.664 . 128.140

37,580 .31.56.? 52,152

7;194»

General Sales, Use,

Gross Receipts

C 25 V |>*i:;065

, 7 2 1 , 0 6 5 :

14,807 7,372

10.029 135.033 /

12.514

• 2.548

. - , • . . . ' .

89.9.^2 4J^i704

22.532 16,290

"9,572

92.82.1

V.V.279 33.696

• y " "^ : —

Total •

48 $1,438,933

1 , « 6 , 6 7 4 2 ,259

• 23,660 7.492

• 18,320 79.393 10.556 26 .09! -

3.404 45.292

. 32.697 5.961

91.518 29.594

. 1 7 . 4 0 0 12,401

35 ,028 39,625 10.373 22i579

39.664 . « .317

. ~37,580 18.284 18,456

7,194

Selected Commodities and Services

Motor Fuels

• 48 $691,1=00

690,905 195

15,400 4,235

10.535 ' 43.946

6.476 6.961

1.617 22.132 19.783

4.627 30.663

• 20.418

11.320 7.984

12,494 17.758 . 4.022 9.266

12.799 • 23,582

17,399 10,909 , 10,862

* 5.378

j r \ .

Alcoholic Beverages

48 $267,117

267.117

470 1.063 3,211

15,406 3,088 4,714

743 • 8.025

5.995'-282 •

19.505 6.058

1.370 752

4.729. 5.293 1,928 5.834

8.894 6,050 5,348

^ 1,663 4,393 1,106'

Tobacco Products

30 ^ $158,385

158.385 • " • • • - • • •

4.816 1.117 2,983

. . . . . 3,618

585 1 5.719

4.960 . ; . . . . 13,712

2.746 1.954 3.164 7.957 1.625

*. 8.598

, 3.716

• - , . , , . ' ; . '

•• . . . . ^ : r ~

Other

48 ^ . $322,331 '

.320.267 2.064

2.974 1,077 1,591

20,041 992

10,798

459

V'6 17959 ; 1,052 27,638

3,118

1.964 1 .7U 4.641 8.617 2.798 7,479

9.373 .5.685 14.8.U

" 1.996 3.181

710

Total License and

Privilege Taxes

48 ^ Y $685,079 '

681,815 3.264

8.193 1.968 5.297

26.935 5.135

10.211

5.183 15.414 . 5i709 1.240

2'),401 14,694

14,987 '..147

• 6.302 10.067

5.595 7,529 »l

50,470 - 39.570

10.382 5.-239 A

14.961 . 1.640

Motor Vehicles

48 $398,176

398,0.76 100

4 i 3 9 r 1.402

. .3.?>55 16.W3-3.503 7.07b

1 .085 . 11.004

^ 3 .44^ 359

23.091 10.151

f3,*S47 6.163 4,356 3.333 3,938 5,192

6,947 25.029

8.425 2,531

11.242 233

Corpora- . lions in General

, • 4 7 ' •'••

$114,255

. 113.855. 400

1.804 . 109 332 122 103 190

3.162 344 401

68 J.02H

99

159 ' 325 379

: 3.011 0- 219 -

262 '

3 2 . 2 9 2 -6 . 8 3 r

35 510

. 1.786 21

Other

48" -$172,648

169.884 2,764

1.998 457

1.010 10.080

1,529 2.948

, " 936 4.066 1.860

813 3.282. 4r444

1.281 659

1.567 3.723 1,438 2,075

11,231 7.7M) 1,922 2 i l 98

• l i933 11386

"s'l-7 ••''

0

Nebraska.. Nevada New Hampshire.. New Jersey . . . . . . . New Mexico. New York; . i . . . .

North Carolina.. . North Dakota.. .

Ohl6«..V, Oklahoma

• Orefion.....; i . . . . ^ Pennsylvania...

Rhode Island... . ; ^ South Carolina... oo South Dakota.. 'O Tennessee

Texas .-;.. U t a h ; . . . . . . . ; • . Vermont . . . . . . . Virginia Washlnjaton Westyirglnla.. Wisconsin Wyoming..

'"V

13,218 J 1.867 5.764

28.889 I2.246d

168.934

51.770 10.125

164.309 44.973 13.297

105.396

10.715 25.515 J 12.589 33.667 74.498 12.937

4.190 29.046 94.989 44.219 30.567

5,009 "

. , ; , . . , .6.716

19.652 4.884

63.231 19.080

., 2.585

4.139 • ,

. . . . . . 7,155

56.604 33,516

2.372

13.218 1.867 5.764

. 28.889 5.530

168,934

32.118 5.241

101.078 25,893 13,297 ••

102.811

10.715 25.515 8.450

33.667 74.498 5,782

4.190 29.046-38,385 10.703 30.567 -2.637"

^ 1 0 . 3 6 8 ^ " ^ ^ 0 2

2j81 12,192 4.340

45,319

2i.268 2.579

43.634 15.757 10.034, 47.9:S8

2.520 11.048

5.192 21,241 40.669 3.831

1.623 • 15.873

15.503 7.683

16.044 2.060

2,059 351 836

10,149 891

38.275

4.363 1.405

21.901 1,270 1.068

20.722

1.564 5.815 1.788 3.437

10.116 . 575

i.311 4.523

10.530 • 1.444 b

6.411 1 3 9 3 _

1.079 • • ( • ' ) • •

25.009

>854 11,463 6;043

"14.665

r>,440 3.615

865 5.300

11.804

619

593

' '3.562

" '4.264

791 114

1.668 6.548.

299 60.331

6.487^^

2.823 2.195 -

19.466

5il91 5.037:

60S "3.689 11.909

757

663 8;650 . 8,790 1.576 3.908

184

2.070 d 1.175 <» 3.347

33.023 2.454

77.588

17.691 d 2.496 d

43.909 d 9.019 8,017

81,926

6.705 2.646<l 2.050 <»

12.536 18.766 2.257

3.091 12.655 <» 8,900 ,7.981 16.670

1.568

1,268 892

2.458 17.920

1.915 47.421

11.002 2.070

30.259 , 7,277 5.317

30.581

2,992 2.172

936 6.217

11.312 1.396

2,287 7,841 5.139 6,295

14.906 1.072

144 34 35

- 1.921 188 . 464

2.709 8

- 5.697 958 309

36.087

2,095 (')

~ '- '2!2i5 3.548

166

92 485 289 707

85 21

658 249 854

13.182 351

29.703

3.980 418

.7.953 784

2.391 15.258

.li618 - . 474

1,114 4.104 .3.906

^-^6?S^

.712 4.329 3.472

979 1.679

475

Including states for which data are not reported. * Includes licenses for same business, \Vhere sesresation from taxes on sales was not available ' for this report. . ' • * Tax on beejonlyj the tax on liquor repealed, effective MarcH 2, 1942. • Not entirely complete,' but except fbr the case of South Carolina, apparently only small *> amounts are missmK. j Prepared in the Governments Division (E. R. Gray, Chief), Bureau of the Census, by V. J. WyclcofT.

Include; corporation excess.measured by net Income aswell.as by corporate excess. Not available fbr this report."- ' v All amounts designated, as preliminary by state officials. Data for certain other states aito preliminary also. Mercantile tax abolished In its entitety.effective January 1, 1944. • '

• > !

. / • .

If?? • • • • • • . • I : - ' .

/.:'

^xMiWk

...r

.£S-

STATE REVENUE OTHER THAN TAXES, BY STATE: 194:3* ^y ' \ (Dollar amounts'in thousands) i / j

Slaie Total Aid Received '

$835,985

12.049 , 7.487

8,793 77.715

14 .772-10.796

; 1.774. 12.796

15.801 5.415

47,278 22.134

15.573 11.262 13,198 15,436

6,899 8.309

30.693 37.260.. '

19.162 9.245

21.631 5.819

V

r ' "

' Total

$81:4.900 :

11,7837 7.420 8,793

76.699

. 1 4 , 7 7 2 8.036 1.774

12.444

^ - 15.315 * 5.250

47,278 22,134

15,17^ 11,262 13.107 15,398

6.317 8.179

30.683 36,499

19,116 9.124

21,631 4,843.

•

Highways

$163,590

4.012-1.955 2.338

15,361

2,535 1.264

192 , 2 , 4 6 4

4,429 1,327 -4v723 3,471

3 ,339 1,834 3,113

. • 4.983

1.^76 .2.201 1.947

10.982

7 3.019 ' 1.628

4.218 * 1,129

.

Public Welfare

$388,766

1.872 2.746; 2.930

39.538

• 9,752 3,708

302 4,932 •

5.096 2,258 ,

31.315 11,968 '

7.804 6,188 .4,387 6.564

2.753 . 3 . 3 2 6 -

21.958 16,492

10.854 1.918

11,813 2,360

• F, 'deraj Aid

•c . Sihools'

National Defense

$123,531

2,317 957

" 928 13,857

1,286 • 1,188

622 2,783

2,t21 . . 665

4.950 3,06 7>

1.343 • 1.31S

2.420 1.086

710 985

3 .460 4.293

2.207 - 2.491

1.963 225

Other .

$33,479

840 167 506 :

2.162

311 372 216 475 :

- 867 232 .

1,329 1.281

836 349 729

. 606

209-178 675 863

651 635 789 415

Health

$29,593

1.134 220 615

1,166

-304 324 110 8 3 8 '

1.009 232,

1,244 551

484, 422 973 846

204 482

. 343 920

611 1.223

: 879 154

,.

. Employ-• nient

Security Ad^ninis-

trdtion _

$37,581

273 143 313

3,246

196 ••'.: 757

. . 136 •:. 435

563 147

2.948 1.065

299 380 521, 456

244 428

1,856 1.79?

785 226

1.056 175

Agriculture

$28,179

: 8 6 8 . 2 6 0 1.043

624

323 ; 295 . 1 9 1

4 6 5 ^

1,112 255

". - 724 622

994 676 877

. 6 6 9

312 5 4 3 . • 247 819

689 . - 815

770 • 279

• 1 Other

$10,181

467 972 119

•.74'5 •':•

65 ." 128

• • • s ' •

•52 .

118 134

45 109.

75 ." 98

^ 87 188

109 . r .36 ,

J 9 f 331

300 188

• 143 . 106

Local Aid

$21,085

'•'?^ 266 : 67 ,

Coie

vs '2,760

•" '352

ISS

399

•91 38

J 582 130

10 761

•'•46 121

976

Earnings and\.^

Miscel-i-taneous

$349'.764

. 8.321 1.053 3.310

22.174

3 .029 3.790

783 2.726

. 4.645 1.987

10.394 8.075

11.550 5.549 4.262 7.123

5.834 5,218 9.936

27';i00

9.7S2 3 i 5 U 4,904 2.777

o

T o t a l . . . . . . . . . ..

Alabama Arizona.. . Arkansas: n, California Colorado. Connecticut Delaware.... F l o r i d a . . . . . . . . . . . . . - .

Georgia I d a h o . . . . / l U l n o I s . . . . . . . . . . . . . . Indiana.

Iowa. ." . . . . . . K a n s a s . . . . . . Kentucky. . . . . . . . . . . . Louisiana.

M a i n e . . . . . . . . ; . . . . . . Maryland Massachusetts . . . . . . . Michiftan

Minnesota.,.. Mississippi. Missouri.. . Montana: . . . . .

^

" • • • • . M '

¥t '•-:/:-V--.l7-

•i

I Sr - N - • • ' • . ' . ; *

:•• • - : ; J

Nebraska. . . . . j Nevada...

New Hampshire. . New Jersey

New Mexico . . . . , New York».. North Carolina.. North Dakota...:

Ohio. . . . . . . . . . Oklahoma. . . . . .

• Oregon... Pennsylvania...

^ " Rhode Island.. . South Carolina., South Dakota. . . Tennessee. •.'.:...

Texas. . .:.:: Utah.. Vermont.. Vlrft lnla . . . . . . . .

Washington. West Vlr i ln ia . . . Wisconsin Wyomlnti....

o

8,536 4.357 4,476 17,071

5,134 56,369 15;0S6 4.746

46,W8 • 20,798 14.590 45.003

3,617 9,026 . 4,620 15,662 .

43,273 9.716 2,785 15,168

21.299 13.078 19,770 4,334

8.529 4,053 3,689 15,095

4.895 ' 56,286 ,14,774

4,294

45,969 ,20,798 12,476

. 43,725

.1,616 8,942 4,613 13,822

. 42,267 8,581 2,404 14,710

' 21,284 13,078 19.776 4,193

Data for the.fiacal year.1942. Sec footnote ^, Table 3 . Prepared in the Governinent» Division (E. K. Gray^Chicf) ,

1,437 2,172 " 777

3,294

1.097 . 8,697 2,808 1,276

9,667 3,058 3.147 5,245 -

890 2.899 1,113 2,456

7,977 2,368 . 611.

7i706 -

1.873 3.607 3.232:' 1.943

4.829 V 430 1;291 5,70.S_

1.251 25.606 4,135 1,656

23,388 • 13,814 3,760

21,786 .

1.456 2.010 2,223 5,088

22,490: 3.056 764

-2.055

- 13,<)07 . 5.075-9,695

". 762

063 , 34 . 778 -

2 559

:V043 . - ,591

3,456 303

i ...

7.519 1,545 . 3,304 12,195.

314 1,048 ^ 270 - i.477 .

. 5,284 2.106 205

1,702

2.947 • 2.431

• 3,979 448

337-147 264 644 .

733 2j54r 966 286

1.238 588 314

1,677.

194 746 194

1,121 .

1,727 345 192 938

854 464 736 540'

354 93 • 142 622

.' . 338 1,513 1,211

V "182

'i,i26 : 745 292

1,400

- 192 866

~ 225 759

1,692 229 . 152 770

404 .368 505

• 125

232 •"• 619 108 167 178 :j, 224

1,847. 292

114. 7,150 •583 100

2,219 354

• 558 56

376 356 90

=5517.

1,492 202 138 569 .

707 504 -566 118 .

293 . .673 1,246 457

636 659 301

1,174

166 661 447 835

1,430 -247 212 845,

545 546 826 206

58-902 35 132

26 515 369 34

176 ^ 5 800 192 •

28 356 51 569

. 175 28 40

6 .»2S •

347 , 83 237 51

• 7 : 304 787

1.976

239 , 83 • 282 ^ 452

229

'2',ii4 1,278

1 « ., 84 7

1,840

1,006 1,135 381 458

15

" i - t i

3,610 247

2,097 8,644

1,701 17,87.6 6,311 1,750

21.000 3,249 6,566

38,657 9

792 2,566

• 2,025 .3.803

8,641 3,388 523

-20.504

9,865 . 8,426

9,027 688

Uiireaii Ofitlu- CensuH. by V. J . W'yr.kotT. Data fur I''44, by atute, not yet available.

: " • ' • : ' ' • • • ' ' ' y / : - ' ^ \ • : ' • • • • ' • . • , > • - • ; : ; . • • •• ^ I • / -

. " . ^ • • ' • ' • • . • • • • • - . ' • • • • - . '

<e»

') i

- • . • - : %

192

•i>.

f • ••1.9,.

THE BOOK OF THE STA TES ^

STATE-CODLECTED MUNICIPALLY-SHARED TAXES, 1944*

. !^ (Omits school funds and minor tax sources)

- -

• -

State and •

" Region

Arkansas California

Ckilorado . . . > . . . C o n n e c t i c u t . . . Delaware. Florida

Georgia. . . . . . . Idaho Illinois . . . . . . Indiana.

* Iowa Kansas Kentucky. .

M a i n e . . . . Mainland 'Massachusetts, Michigan

M i n n e s o t a . . . . . Mississippi Missouri M o n t a n a . . . . . .

Nebraska. . . . Nevada. New Hampshire New Jersey . . .

New Mexico New York. . . North Carolina. North Dakota, .

Ohio Oklahoma Oregon Pennsylvania . .

Rhode I s l a n d . . South Carolina. South Dakota. . Tennessee . . .*..

Texas Utah Vermont... V i r g i n i a . . . . . . .

Washington . . . . West Virginia. . W i s c o n s i n . . . . . W y o m i n g . . . . . .

Property Ad Valorem Income, Net f • / • • ^ ' ^

. . . . ^ . • • : V . , ^

. NJ ; - ~ Si a 0

0 ^ c .•;; ^ . u

' . ' . ' . ' • ; ; * : ; ; ; ' . ' . \ \ '/.'.'. ' . . . ' .

'.'.'.'. ':'.":'. '.'.'.'. ' S " ; : ! ; • ' s ' .... • s :... ..:•: ' s . . . - . . :

«-;v_ _ . . . .

i . . . . . . . . . ; . .

. . : . : . . . • s . • • • • • • • • 1

• . . . . S S , . . . S S .,'

.... ...; s ...;. s . . . . ; • . . . . . . . . .

.... s ..." s s .... s

.... s s .... .... ;;;; "s' .w. ww s' 's". . . . . : . . . s . . . . • . . . . • . . . .

• : . ' • • • . • s

. . . . . . . ' . . S. S

. . . . ' . . . . s"- . . . . . . . . . . . . . ' •

Transaction 1 . \

^ -. 5, V h

0 • = .

CO • I t .

s s

. , . . . . . .

'.'...", "s" '.'.V. "i'

. . • . . • s

'.':'.'. ' s" . . . . . S

s

. . . . . s

.... s s s

.... s. -s

.... ,s

.;./ s

'.'.'.': s'

\ i " » • a

-V}

C u H

• ' " ^

\ i

"s"

• • • • • .

s .

. • • - • •

- s

s " s.

s s •s

s

Liquor

• « . •

*-<

s

. • ' s " •

•

. ' . , . -

"s" s,

s

s s .s

• s . s

' s' s

s.

- . :

>

• 0

to

0 =0

'\ S

r

s'

—

. . . .

's" s s

Motor Vehicle F "•' • • • ^

ft . '^ c M <1 , V .

H ^ 0 a

• t~. . . 0 •

i i • • • 0

•3 .s • a . • \ i

Ci' a; .

.... s s

s s St . . . .

.• ':'.'.'. ' F '

. F F .

, . , . - . . . - • • . .

^ —

. : . . F

s .

• s ' • . . . . , '

'. 1'.; F *

. . / . S.

• " F " '.'.'.:-

s s s s

.... 's

. . . . F ••

s ..'..•.

» Key: S—Shared by percentage of collections; F—rFixed amount appropriated; T;r-Share only to city having county functions. , .

• Abridged from Leo Day Wocxlworth, SAarri Taxes. Chiirago; The American Municipal Association, November, 1944.

i f i^

r- :

/p -%. * .

STATE DEBT IN 1944*

.#

CONTINUING the decline of the past few bama, Florida, South CaroHiia, West Vir-

years, the state governments reduced' ginia, and Wyoming, the percentage of their.gross debt outstanding to S2,796 mil- reduction was negligible, lion in 194*4, bringing it to the lowest The situation in California, the only point since 1931.

1944 STATUS AND PRIOR-YEAR COMPARISON-

state to show an increase, is .explained by "\ the fact that the large refunding transac­

tions mentioned below were not completed within the year, the refunding issues having

This S2,796 million gross debt: out- bpen floated but the old debt having not standing at the end of the 1944 fiscal year been retired by the close of the fiscal year, represents a decrease of 5 per cent from Had th^se refunding operations been com-the 1943 figure and a decrease of 23 per pie ted, there would have been a reduction cent from.the 19|40 figure, the peak year of of 8 per cent. Although the debt of Mas-the period. sachusetts^shows.a 21.5 p^r cent decrease,

Net long-term debt dropped 7.2 per this change occurred over the nineteen-cent from 1943.to 1944 as the states con- month period frpm November 30j 1942 tinned to retire" callable bonds where pos- (the end-date of Massachusetts' former sible and to set aside a portion of general- fiscal year), to June 30, 1944. fund surpluses for future retirement of non-callable pbligations. _ . , - . . - : . .

Since 1940^ gross'deBTn5ms't"andi'ng~has~~~^ n-:«=:4-decreased "every year at an increasing rate Three-fifths, of the total.long-term debt Tintil 1944, when the rate drppped to 5 outstanding in 1944 was payable frorn per cent from 10 per cent in-the preceding general revenue, and the remainder was year.

COMPOSITION OF 1944 DEBT OUTSTANDING

debt serviced from, pledged specific rev­enue, of which about one-half bears, the full faith and credit of the state.

Of the total outstanding nonguaranteed debt, almost three-fifths was issued by state dependent agencies (both general-

Every state except Califorriia reduced government and enterprise), over one-its gross debt between 1943 and 1944, fifth was debt of enterprises operated by thirteen of thern being able tp "reduce their the central organization, and the remain-

Interest costs were reduced 8 per cent from 1943 to, 1944—to the lowest poirit in many years. '

DEBT GHAI^GES IN INDIVIDUAL STATES

debts more than 10 per cent; of these thirteen, Idaho, Michigan, Texas, and Vermont brought about more than a 20 per cent reduction. In the states of Ala-

iData contained in,the Bureau of the Census series on State Finances are for the most recent fiscal years ending between July 1 and the follow­ing June 30; thus, for each of five states the fiscal year considered here is the one that ended be­tween August 31 and December 31, 1943. The debt data are as of the close of the fiscal year. ..TThe 1944 figures in this report are subject to slight changes in Volumes 1 and 3 of State Fi­nances: 7944. . - *. Prepared by W. Paul Nowell under the super­vision of E. R. Gray, Chief, Governments Divi­sion, Bureau of the Census.

ing^ fifth was general-government highway debt issued by the central organizations of Colorado, Idaho, Mississippi, Montana, and New Mexico. Colorado's debt of this type is jpayable from revenue of the state highway fund, and that of the four other states is backed by the specific pledge of all or a piortion of gasoline tax collections.

The proportion of nonguaranteed debt to gross long-term debt has tended to in­crease slightly over the past few years. This type of debt is important in a few states—as California, Pennsylvania, and Mississippi—but still constitutes less than 17 per cent of the 48-state gross debt.

"KB

\

193

'«a.

. : . - , 1 ' ' • , '

• / • • •

194 THE BOOK OF THE STATES

DEBT COMPOSITION OF INDIVIDUAL STATES .

A third of the states require a constitur tional amendment for state borrowing, aside, from casual or emergency loans. Consequently, a number of states have little or no ^ne ra l obligations, most of their debts being backed only by entier-prise earnings or-specific taxes, and only one state has no state debt of any kind.

Nevada was the only completely debt-free state in 1944. The entire debt out­standing in four statesr-^Florida,^ Indiana, Nebraska, and . Wisconsih-=-consisted of nonguaranteed debt issued by dependent agencies. Full faith and credit debt of Iowa, South Dakota, Utah, and Virginia is completely offset, but all of these states have outstanding net long-term non-guaranteed debt, of dependent agencies.

Connecticut continued to build up its reserv'e for debt retirement, so that all of the state's general obligation bonds were offset in 1944. The remaining SIO million of j.full faith and • credit debt, for which there are no offsets, is- all serviced from pledged earnings rather than from general revenue. A nearly comparable situation exists, in Mississippi. In January, 1944, the state legislature.appropriated $21 mil­lion to retire all outstanding general obli­gation bonds. Since these bonds, are not callable, this amount has been set aside' in a fund for their payment as they ma­ture. In addition, howeyer, Mississippi has^outstanding $2 million of debt to trust funds, which bears the full faith and credit of the state and is serviced from general revenue,

INTEREST PAID ON ST.\TE DEBT. —--

; Interest costs were reduced from ^|l 10 million In 1943 to $101 miUion in 19^4--the result of'successive drops in gross debt over the past few years and the continued decline in.the interest rate. . The fact that, although the 1944 figure

is 10 per cent above that of 1931, the interest payments were 8 per cent less than in the prior year, is .at least partially at­tributable to the extensive refunding oper-

^Florida's debt consists of university and college debt authorized by the legislature. The same is true of almost all of Nebraska's debt.

ations by means of which the states have taken advantage of (.more favorable inter­est rates.. California, for example, issued $56 million of refunding bonds in 1944— S20 million.at 1.75 per cent and $36 mil­lion at 2 and 2:75 per cent^—to retire 4 per cent bridge revenue bonds.

PROCEDURE'

Current data presented in this article \vere obtained by the Census Bureau most­ly by mail canvass. Data'for seven states, however, were procured by field represeh-

Jatives of the Bureau of the Census. • Only one state, Arkansas, did not report

at all. The amount estimated for this state —based on 1943 d a t a , ' t h e maturity sojiedule for the central Organization,, and other collateral—comprised nearly all of the .5.5 per cent of total state debt estimat­ed in this report; the small remainder con­sisted of debt of dependent agencies in a number of .states and of the central organ­ization of Delaware's general government.

The classification of.state debt has been revised in 1944 in,order to make'a more complete separation between full faith and credit debt and nonguaranteed debt. Each of these categories has been further clas­sified according to the character of its servicing. A significant result of this change has been to show full faith and credit debt serviced from pledged taxes or funds and that serviced from pledged earn^ ings separately from full faith arid credit debt serviced from general revenue. All of these classes of debt were formerly reported as general obligation bonds. In order, to clarify the relation between the two prin­cipal, types of long-rteri^ debt, data for de­pendent agencies—^both of general govern-rrieht and of enterprises=hay-eJieen_segre-, gated from those of the central organiza­tions, thereby setting apart debt.of,those instruments of the state which, although not operated as integral parts of the state government, nevertheless lack sufficient independence from state control in their organization and powers to be classified as separate governmental units.

Data for 1944 and also the data for prior years which are presented in this article are for the latest fiscal years ended on or be^re June'~30 of the year shown. The data appearing in this article differs

V

REVENUE AND EXPENDITURE 195

^

i V

also from the revised data appearing in the Census Bureau's previous annual compre­hensive reports of state government finances as.follows: (1) The 1943 and 1942 figures have been adapted to the revised debt classification adopted for 1944. (2) Debt figures for 1941 and prior years have been adjusted to cover fiscal years comparable with those for which the more recent data are presented, as indicated in the preced­ing, paragraph. (3) The debt figures of a number of states have been revised oh the basis of supplementary information, as follows: gross and net long-term debt of Iowa and New York were revised for 1943 and for 1942,. and debt, of Florida's'de-

p>endent agencies was added.to the forty-eight-state total for these years and for cllch prior year through .1^38. Net long- ^ term debt of North Dakota and Washing­ton was revised.for 1943, and interest.paid on enterprise debt for all states was added to the 1943 total interest figure. Revision of the 1942 and 1941 net long-term debt figures for Minnesota, North Dakota, and South Dakota took into account the sink­ing-fund offsets to rural credit debt omitted previously. Net long-term debt of Califor­nia and Michigan was also revised for 1942. For 1940 and prior years, the interest on debt serviced from payments of local units was added to the total.

. . • . ; ' • . . _ • . - . • : • • • • : • ; . , • • ; • . " • • • • L ; . : . - • • .

. "^ , . . • ' , -TABLE 1. -SUMMARY OF STATE GROSS DEBT, N E T LONO-TERM DEBT, AND I N T E R E ^ PAID: SELECTED YEARS, 1931-44

(Dollar amounts in millions)

Gross Debt • Net Long-term Debt Interest Paid'' . , ' ^ - N '^T-. — - ^ - . ^ • - s

Percentage - ' Percentage Percentage Year» Amount of 1940 . Amount of 1940 Amount of 1940

1944.......;... .'. S2,796 • 76.8 $2,139 83.2 $101 78.9 1943.......;.......^.... 2,946 80.9 2,306 89.7 110« 85.9 • 1942...... ;.-.....,.. 3,268 89.7 2,548 99.1 -. 123 96.1 1941 3,497 96.6 2,651"- 103.1 126 98.4 1940 :.,.... 3,643 100.0 2,571 . 100.0 "128 100.0 1939.................;.. 3,545 97.3 2,583 100.5 125 971.7 1938.........;.......... 3,383 92.9 2,566 99.8 .- 131 102l3 1937..;.....'.... 3,367 92.4 (d) '"130 101J6 1932.;........... 2,896; .79.5 . i^) ..... 116 90:6 1931................,;.... .2,537; 69.7 (<«) 110 .... . »Scc statement of procedure, page 194.

•"Adjusted for 1940 and prior years to include interest on debt serviced from payments of local units. , • "Adjusted, to include interest on enterprise debt. . "i ' dData not available. " . ,

; • / . T A B L E 2 .

ST.ATE LONG-TERM DEBT, BY CHARACTER OF LIABUJTY AND OF SERVICING: 1944, 1943, AND 1942

(Dollar amounts in thousands)

~ V^-—n-1944* :—^., ^1943"—::^:r^-<7—r" 1942*^ —N • Percentage ^Percentage Percentage

of . of _ of Character of. Liability and of Servicing Amount Total Amount Total ' Amount Total

' T o t a l . . . . . . . . . . . . .' $2,787,298 . 100:0. $2^923,334 100.0 $3,103,794 100.0 F.uU faith and credit debt 2,320,745 83.3^ 2,476,051 84.7 2,643,%1 85.2 '. Serviced from general re/enue 1,685,396 60.5 1,810,654 62.0 . 1,947,750 62.8 . ' Greneralobligationbor.ds, notes, and

certificates 1,635,228 58.7 1,762,682 60.3 1,904,263 61.4 Debt to trust f u n d s . . . . 50,168^ 1.8 - 47,972'> 1.7 43,487b. 1:4

Serviced from pledged specific revenue 635,349 22.8 665,397 22.7 696,211 22.4 Serviced from pledged taxes or funds 455,092 16.3. 473,332 16.2 495,944 16:0 Serviced from pledged earnings. . . . 52,537 1.9 53 ,617 , 1.8 55,079 1.8 Serviced from payments of local ' '

u n i t s . . . . 127,720 4.6 138,448 4.7 145,188 4 . 6 ' Nonguaranteed debt. . . . . . . . . 466,553 16.7 447,283' ' 15.3 459,833 14.8

Serviced from pledged taxes or ftinds.. 215,972 •7.7 241,874 8.3 . 2 4 6 , 8 2 5 8.0 Serviced from pledged earn ings . . . . . . 250,581 9.0 -205,409; 7.0 213,008 6.8

•See statement of procedure, page 194. bDebt to trust funof included with nongujtfanteed debt serviced from pledged taxes or funds was $4,175,000 in 1944,53,567,000

in 1943, and 84,797,000 in 1942. . '

«28,

,«£».

:#1 m

TABLE 3

A STATE DEBT OUTSTANDING AND INTEREST PAID, BY STATE: 1944 = (Dollar amounts in thotisands)

Stale Debt'

as of—

-.- : -•/ Cross Debf^ •

$2,796,315- •

2,497.901 2.337,387 . 160,514 . 2 9 8 . 4 1 4

181,305 117,109

71,781 63,706. 53.623 10.083 8.075 3.442 3.442 1.521 1.921

;.. 144,082 144.082 139,056

5.026 242.768

f 108.986 108,947

39 133.782

19.007 114.775

20 ,039 . 20.039 18.422

1.617 25.173 14.833 10.340 4.733 4.733 4.712

21 1.021 1,021

/•

• - ' , _

Total i

$2,787,298:

2.490.065 - 2.329.982

160.083 297,233 1?0,13S 117.095

. 71.781 63.706 53.623 10.083

8.075 3.442 3,442 1.521 1.921

144.082 144.082 139.056

5.026 242.768 108,986 108,947

• 39 133.782

19.007 114.775

20.039 20.039 18.422

1.617 „ 25.173

14.833 ° 10,340

4,733 4.733 4.712

21 1.021 1.021,

Full Faith and

Credit Debt

$2,320,745

2.239^365 2,237.416 >

1,949 81,380 80,028

1,352 61.698 53.623

. 53.623

3.075 1,521 1,521 1.521

139.056 139,056 139.056

127,954 - 108.947

108,947 < • • « « < • • ,

19.007 19,007

•." , . . 1.502

1.502 1.502

• > . ; . . . ' . 25,173 14,833 10.340 4.712 4,712 4.712

- . . .

1 Non

Total •

$466,553 ^

250.700 . 92.566

158,134 215.853 100,110 115.743

10,083 10,083 • . . . . . . 10,083

1,921 1,921

, ,-1,921

.5.026 5.026

5.026 . 114.814

39 ' . . . . . .

39 114.775 • •••'.*

114.775 '18.537

18,537 . 16.920

1.617 . • . . . . . .

• . • ' • . •

. '. f . t .

21 21

> . . . * . 21

1.021 - •1;021

suaranteed D Serviced

Solely from

. Pledged Specific

Taxes or •

Funds

$215,972

214.924 92.566

122.358 1,048 1.048

9.441 9.441

9,441

1,360 . 1.360

. . . . . . 1.360 5,026 5,026

5.026 39 39

• . . . . . , 39

. . . . . . . ;

.-, 16.920 16.920 16.920

• • . . . .

• ,

21 21

. . . . . . . 21

, , , , , , . . . . . .

. Serviced Solely from

Pledged Earnings

$250,581

35.776 ' ,

35.776 214.805 -99,062

, MS.743 • 642 .

642 . . . .-. .

642 .'

561 561

561 : . . . . . . . . ... . .

114,775 • . . • • . . '

. . . . . .

. * . . . . 114,775

• " . * . * . ^ .

114,775 • 1,617

1,617 ,

1,617

• ,

. . . ^ . .

. . . . . . . ' • • . . * - , , . . .

. . . . . ( 1.021 1.021

, - -

Sinking-Fund

Offsets to

Long'term . Debt^

$648 .599 '

575,024 559.693

15,331 . 73.575

1.2.163 61.412 13,666

' 13.666 ' 9.031

4.635 . . . . 248 248

46 ,202

4 ' l41 4,141

. 3,872 269

92,304 25,116 25,116 • • . . . .

67.188 5.776

61,412 375 375 264. I l l

14,4S0 14,450 . . . ^ . .

75 75 75

, , , , : . 150 150

. . . . •

Net • Long-term

Debt <

$2,138,699

1,915,041 • 1,770,289

144.752 223.658 167.975 55.683 58.115 50.040 44.592 .

5.448 8.075 3,194 3.194 1,475

. 1.719 . 139,941 139.941 -

. 135;184 4,757

150,464 83.870 83,831

39 66,594 13,231 53,363 19,664 19.664 18.158 . 1.506 10.723

383 10.340 4,658 4.658. 4.637

21 871 871

Total Interest

Paid from •

General and

Sinking ' Funds

$101,390

92.016 86,011

6.005 9,374 6.819 2.555 2.997 2,645 2,413

232 352 129 129 50 79

4.874 4,874 4.665

209 7,739 4,495

. 4 ,494 1

3,244 760

2,484 673 673 618

55 395

. , 226 ^ 169

99 . 9 9 98

1 40

. 40

C7V

Grand T o t a l . . . ; . . . . . . . . . .

General government.. ..' • Central organization

' Dependent agencies...., . . . . ' . . Enterprises . . . ; . . . . . . . . . . . . . . . . . . .

Central o r g a n i z a t i o n . . . . . . . .•••'•• Dependent a g e n c i e s . . . . . . . . . . - • . . ' . . . .

A l a b a m a . . . ! . . . . : . . . . , , . . . . \ . . ' General g o v e r n m e n t . . . . . , . . . . ' . . . ; , . , . . .

Central o r g a n i z a t i o n . . . . . . . . Sept. 30, 1943 Dependent a g e n c i e s . . . . . . Sept. 30, 1943

Enterprises •=. . Sept. 30, |943 Arizona

General government. . . . . . . . . . . . . . . . ' Central organization . . . . . . . June 30, 1944

Dependent a g e n c i e s . . . . . . . . June 30. 1944 Arkansas'' :

General government.. . . . . . . . . . . . . . . Central organization June 30, 1944 Dependent agencies. • June 30, 1944

California. . " . . . . General government.

Central organization. June 30, 1944 Dependent a g e n c i e s . . . . . . . . June 30, 1944

Enterprises.. June 30, 1944 Central organization June 30, 1944 Dependent agencies Juiie 30, 1944

Colorado '..•• . . . . . '•..... General government "...

Central organization June 30. 1944 Dependent agencies June 30, 1944 ••

Connect icut . . :.'....... General government

• Enterprises« ". - June 30, 1944 Delaware. . . . . . . . . . . • General g o v e r n m e n t . . . . . . . . ; . . . . . . . . . . . . . . .

Central organization"^ June 30, 1944 Dependent agencies . . . . . . . . . June 30, 1944

Florida General g o v e r n m e n t . " . : . . . . . . .

Central organizat ion. . ; . . . . ' : . . . . . . . . . . . . . . . . . Dependent agencies •.'.. June 30, 1944 .

— ^ : - ^ — — -1.021 1.021 1,021 1,021 150 871 40.

7 ••

s-W •:-:M

Georgia General Kovernment... ' .

Central organization.. - Dependent agencies. . E n t e r p r i s e s \ ' . . . . .

Idaho General government . . . . • Central organization..

Dependent agencies. . Ill inois. .

General government . . . . CentraJ organization.. Dependent agencies. .

I n d i a n a . . . . General government . Central organization..

Dependent agenciies.. I o w a . . : .'. i

General government Central organization. Dependent agencies. .

K a n s a s ' . . . ; Kentuclty

General government . . . . Central organization.. Dependent agiencies..

Enterprises ° Louisiana

General government Central organization.. Dependent agencies. .

Enterprises •= M a i n e . . ' . . .

.General government.^. . Central organization.. Dependent agencies. .

Enterprises =. Maryland . ,

General government Central organization.. Dependent agencies. .

Enterprises " • . . . . . Massachusetts

General goverjfment*. . Enterprises •=. . ' . . " . . . . . . .

Michigan . : General government . . . .

Central organization.. Dependent agencies..

Enterprises '• Minnesota

General government.. . , Central organization. Dependent agencies.,

M i s s i s s i p p i . . . . : . . . General governineht.. . .

Central organization.. Dependent agencies.,

Missouri . . . General government . . . ,

Central organization. Dependent agencies..

June 30, 1944 June 30. 1944 June 30. 1944

June 30. 1944 June 30, 1944

June 30. 1944 June 30. 1944

June 30, 1944

June 30, 1944 June 30. 1944 June 30. 1944

June 3Q. 1944 June 30, 1944 Mar. 31. 1944

June 30. 1944 June 30, 1944 June 30, 1944

june'36. ' i944" June 30. 1944 June 30.1944

June id." 1944' June 30, 1944 June 30, 1944

june '36 , ' i944 ' June 30, 1944

June 30, 1944 June 30, 1944 May 31, 1944

June 30, 1944 June 30, 19^

j line "36. 1944' June 30, 1944

Dec. 31, 1943 Dec. 31, 1943

I

18,601 • 16,074 13,831

2,243 2.527 • 1.462. • 1,462

• 998 ' 4 6 4

125,080 125,080 120,908

4.172 ' 7.016 7.016

•"7 .616 1,631 1.631

. 4 3 1.588

12.850 7.461 4,940 2.481 2.459

• 2.521 . 168.508* 137,473 • 119.641

17.832 31,035 21,178

^20,478 20.352

126 700

43,327 37,469 :?9,468 »8,00l 5,858

79.814 • 74 .972 ' •

4,842 25,774 . 23,539 15.814

7.725 2.235

82.400 82,400 82,230

170 ^ 74,349

74,349 7.3,760

589 80.908 80,908 80.654

254

18.599 , 16.072

13.829 2.243

. 2.527. 1.462 1.462

998 .464

125.080 125.080 120,908

4.172 7.016 7.016

7,016 1;631 1,631

43 1,588

12,850 7,461 4,940 2,481 2.459 2,521

168,206 137,171' 119,345

17,826 31,035 21,178 20,478 20,352

126 700

43,327 37.469 29,468

8,001' 5 .858 ,

73.814 68,972

4,842 25,774 • 23,539 15,814

7.725 2,235

82,400 . 82.400 82.230

170 74,349 74.349 73.760

5 8 9 80,908 80.908 80,654

.254 •

16.356 . 13.829

13,829 ., . .

2 ,527 771 771

• • 7 7 1

" 1 ^ , 9 0 8 120,908 120,908 -

. . . . . . . ' .

'.'.'.'.'.'.'.' 43 43 43

12,850 2,481 2,481 2,481

, ,

150,380 119,345 119,345

, , , • 31,035

21,052 20,352 20,352

. ' • • • . . . ,

700 . 29,468

29,468 29,468

, , 73,814 68,972 •

4,842 15,814 15,814 15,814

. . • . , . . . .

. - , . . . - . • . ' .

82,230 8 2 , 2 3 0 82,230

. . • < • . . . 23,804 23,804 23,804

80,654 80 ,654 80,654

. . . . . . . . .

2,243 2,243

. . . . . . : ^2,243

691 691 227 464

4,172 4,172

'4,172 7,016 7,016

7,016 1,588 1,588

• « • • • • 1,588

4 ,980 2,459 .

. . . . . . 2,459 2,521

17,826 17,826

17,826 ;

. 126 126

126 . . * . . . 13,859

8,001

8,001 5,858

• . " . . - . . .

9,960 7,725

. . . . . . 7,725

- 2,235 170 . 1.70

. : . . . . 170

50,545 50,545 49,956

589 254 254

254 •

2,243 2,243:

2,243 ' « • • > . •

496 496 227 268

3,578 3,578

• . . . ." ' . . 3 ,578 4,749 4,749

4,749

. . I . . . .

. . . . . .

. . . . . .

1,151 1,151

t . l 5 1 .

17,826 17,826 . . . . . . 17,826

126 , : 126 . . . . - . . ,

126 . • . . * . '

9,049 8,001

8.001 1,048

, - . , . . . . . . . . .

2,718 2,718

:-. . . . . . . . y 3 ,718

. . ^ . . . • ' ,..fc70 . 'n' 170

170 49,956 49,956 49,956 . ... . ...

•

. . , . . . . . . .

195 195

. . . ' . 195 594 594 .

594 2,267 2,267

2,267 1,588 1,588

1,588 .

3 ,829 1,308

1,308 2,521 . . . . . . . . . .

. . . - . . •

. - i • t •

. . . . .

4 ,810 . . . . . . . . . . . " . . . . 4,810

7,242 5,007 ; . . . . 5,007 2,235 . . t - .

, . . ^.

, 589 589 .

. . . . ' . 589 254 254

. 254

9,412 6,885 6,627

258 2,527.

359 359 335 • 24''-

3 ,584 3,584 3,473

111 1,469 1,469

1,469 43 4 3 -43

. . . . . . . 1,815

710 134

134 576

10,619 10,619

8,697 1,922

. . . . ; . . 30 30 30

,. . . . . . . . .

4 ,300 3,706 3,066 , . 640

594 11,416 11,416

7,610 7,580 7,222

358 : 30

16,487 16.487 16.487 . . . ' . • • 25.329 25,329 25,306

23 9,464 9,464 , 9,463

1 .

9,187 9.187 7,202 1,985

* ' • • • • . . . . -

1,103 1,103

663 440

121,496 121,496 117,435

4,061 5,517 5,547

' " S",S47 1,588 1,588

1,588 •11,035

6,751 4,806 2.481 2,325 1.945

157,587 126,552 110,648

15,904 31,035 21,148 20,448 20,322

126 700

39.027 33,763 26,402

7.361 5,264

62,398 57.556

4,842 18,164 15,959 8.592 7,367 2,205

65,913 65,913 65,743

170 49,020 49,020 48,454

566 . 71,444

.71,444 71,191

253

369 259 175 84 110. 42 42

. 24 18

5,239 5,239 5,066 173 242 242

"242 48 48

• 48 589 273 228 139 89 45

7,436 5,902 5,122 780

1,534 744

. 715 711 4 29

1,253 1,138 962 176 115

2^600 2,^07

93 1,351 1,256 1.001 255 95

3,062 3,062 3,061'

1 2,727 2,727 . 2,707

27 • 2,913 2,913 2,901

12

•IP

TABLE 3—Goritintied ,; "

STATE DEBT OUTSTANDING AND INTEREST PAID, BY STATE: 1944 ^ (DoUar.amounts in thousands)

-Long-term Debt^

7

oo

/ Debt . Gross - ' State as of— . , Debt''

Montana , . . . . . . . . . . General government . . . : . . "

Cientral organization.. ' June 30, 1944 Dependent agencies June 30, 1944

Enterprisea •". . . . . . . . . . . . ' • ' June 30, 1944 N e b r a s k a . . .

General government . Central o r g a n i z a t i o n . . . . . . . . . .

Dependent a g e n c i e s . . ; . . . . . June 30, 1944i N e v a d a . . . . . • New H a m p s h i r e . . . .

General g o v e r n m e n t * . . . . . . . . . June 30, 1944 Enterprises . 5 . . . . . . . . June 30, 1944

Central organization '• June 30, 1944 Dependent agencies •June.30, 1944

New J e r s e y " . . . . . . . . June 30, 1944 New Mexico •; . . . . . . . . . .

General g o v e r n m e n t . . . . . . . . . . . . . . . . . . . . . . . . . Central organization June 30, 1944 Dependent a g e n c i e s . . . . . . . . June 30; 1944

New Yorlc ; • . . . . . . . . : . . . . General g o v e r n m e n t . . . . . . . . . . March 31, 1944 Enterprises '" . . March 31. 1944

North Carolina. General g o v e r n m e n t . . . . . . . . . . . /

Central organization June .30, 1944 D e p e n d e n t . a g e n c i e s . . . . . . ; . ' June 30, 1944 .

North Dakota General government« June 30, 1944

. Enterprises.: June 30, 1944 Central organization. . . . . . . June 30, 1944 Dependent a g e n c i e s . . . . . . . . June 30, 1944

Ohio General government. . . '

Centfal o r g a n i z a t i o n , . . . : . . . . Dec. 31 , 1943 Dependent a g e n c i e s . . . . . . . . June 30, 1944 •=

Enterprises ^ Apr. 30, 1944 Oldahoma . ;

General government ' , Central organization.. . June 30,, 1944 • • Dependent agencies . June 30, 1944.

Oregon General g o v e r n m e n t . . . . . . . . . . .

Central organization June 30, 1944 Dependent agencies June 30, 1944

Total

Full Faith and

Credit Debt •'•

-Nonguaranteed Debt-Serviced

Solely from

Pledged Specific

taxes

Total or

Funds

Serviced Solely from

Pledged Earnings

Sinking •-Fund

Offsets to

Long'lerm Debt

Net Long-term

Debt :

$12,284 8,140 7,185

•955 4,144 ,1,135 1.135

• "1.135

"(6.672 12,790 3.282 1.030 2.252

96,154 24.812 24,812 22,324

2,488 616,488' 612,605

3,88.i 119.861 119,861 118,238

1.623 22.425 • 19.876 2,549 2.467

82 12.058

8.912 7.257 1.655 3.146

29.925 29,925 26.836

3.089 ,23,674 23.674 22.270

1.404

$12,284 8.140 7.185

955.5 4,144/ 1,135 1.135

' " 1.135

" "16.072 12.790 3,282 1,030 2,252

96,154 24,812 24.812 22.324

2,488 615.680 511,797

3.883 119.861 119,861 118,238

1,6-23 21.244 19.876

1,368 1,300

68 12,058 8.912 7,257 1,655 3,146

29,925 29,925 26.836

3.089 23.674 23,674 22,270

1.404

$ 2.685 2.685 2.685.

15,172 12.790

2.382 1,030 1.352

96.154 1.451 1,451 1.451

'6l'l',797 611,797

*l"l"8,238 118,238 118,238

' '21,686 19.786 1,300 1.300

V,2S7 7.257 7.257

26.836 26,836 26.836

'22.276 22.270 22.270

S .9,599 • 5,455 4,500 955

4.144 1,135 1,135

"I'.iii

'"966

'"'966

900

'23,361 23,361 20.873 2.488 3,883

' "3,883 i,623 1,623

" "l".623 158 90 68

" '68 , 4.801 / 1.655

'"l",655 3,146 3,089

. 3,089

' '3,689 1,404 1.404

' 1,464

$4,815 4.815 4,500 315

23,138 23,138 20.873 2.265

351 351

"isi 90 90

••••I 3.089 3.089

3.689 1.194 1,194

•l',i94

$4,784 640

' "646 4,144 1.135 1,135

' I'iii

1,655 3,146

210 210

'2i6

1,913 1,885 1,862

23 28 9. 9

900 3,855. :. ... 3,719 900 136

.'....•:'• ,136

900 . ..... 36.075 223 354 223 • 354

... .. . 293 223 61

3,883 176.221 176,171

3,883 50 1,272 22,123 1,272 22,123 . .... 22,071 , 1,272 52

68 18,988 18,180

68 808 .;...' 808

68 4,801 1,655

4Q6 .- 59

"' "59 347

17.730 17,730 17,508

222 16,874 -16.874 16.668

206

$ 10,371 6,255 5,323 932

4.116 1.126 1.126

"V,i26

"l'2'.2i7 9,071 3,146 894

2,252 60,079 24.458 24,458 22.031 2.427

439.459 435.626 3,833

97,738 97.738 96.167 1.571 2.256 1,696 560 492 68

•11.652 8,853

• 7.257 1.596 2.799

. 12.195 • 12.195

9.328 2.867 6,800 6,800 5,602 1,198

Total Interest-Paid from

General. . and

Sinhing Funds

$ 365 258 223

35 107 33

. 33

"354 253 101

. 32 69

, 3.356 830 830 721 109

20.611 20.459

152 4,849 4.849 4.791

58 1.072

995 .77 75

2 518 453 387

66 65

765 765 612 153

1,095 1.095 1.044

51

^i^i

- . . : : ^ .

V3

. Pennsylvania General g o v e r n m e n t . . . . . . .

Central organization. . . . Dependenl agencies

Enterprises ^ Rhode Island

General government«.. Enterprises " :...:.....

South Carolina •General government.

Central organization. . . .' Dependent agencies

Enterprises " . . , ' . . . . . S o u t h Dakota

General government Central organization: . . .

^ Dependent a g e n c i e s . . . . . , /Tennessee * . . . . . . : Texas

General government Central organization. . Dependent agencies

U t a h . : . . . . - . . . . . . Gen'eral g o v e r n m e n t . . ; . . . .

Central organization.. . . Dependent agencies.. . ; .

Vermont. General government. / ; . . . .

' Enterprises": Virginia

General government-. Central organization. . . . Dependent a g e n c i e s . . . . .

Washington. General government

Central organization. Dependent a g e n c i e s . . . . .

Enterprises ' ' . - . • . . . . . . . . . . . West Virginia

General government. Central organizat ion; . . . Dependenl agencies . ; . . . .

Enterprises'". . . '. Wisconsin.' . . • General government . . . - . , . .

Central organization... . . Dependent a g e n c i e s . . . . .

Wyoming General government

Central o rgan iza t ion . . . . Dependent agencies . . . . . .

M a y 31 , 1944 M a y 31 , 1944 M a y 31 , 1944

j u n e ' 3 6 , ' i 9 4 4 ' June 30, 1944

June 30, 1944 June 30, 1944 June 30, 1944

June 30, 1944 June 30, 1944 June 30, 1944

A U K . 31 , 1943 Aug. 31, 194.3

June 30, 1944 June 30, 1944

June 30, 1944

June 3 0 , 1 9 4 4 June 30, 1944

March 31 . 1944 March 31 , 1 9 4 4 ' Juue:^0, 1944

June 30. 1944 June 30,:,1944 June 30, 1944

June 30. 1944

Sept . 30. 1943 June 30. 1944^.

^89,867 147.567 ,97,645 ',49,922 42,300 . .'27,593 26,731

, 862 86,146» 60,781 .58,832 1,949

25.365 2i',720

. 27,720 27;395 325

83,478 14,527* 14,527 5,225 . 9,302 2.154 . 2,154 1,904 250

4,351 4,041 •' 310

. 24,946 • 24,946 . 18,240 6,706 14,456 9.296 8,r44 552

5.160 75.1.42 69,644 67,981 ' 1,663 . . 5,498 4.175 . 4,175

"4,175 3.474 . 3.474-2,520 . 954

189,867 147,567 . 97,645 49;922 42.300

' 27i593 26,731

862 .85,847 60,482 58,533 1,949

25,.365 27.720 27,720

' . 27,395 325 .

83,478 14,329 14,329 .V225 9,104 2.154 2,154 1.904 250

4,351 4,041 310

24,7158. 24,719 18.240 6.479 14,456 9,296 8;744 552

5,160 ,75,142 69,644 67,981 1,663 5,498 4,175 4.175

''"4,i7.S . 3,474 3,474 2,520 954

:»7,645 97,645 97,645 .

. '........ '"27,593

26,731 862

60,482 60,482 58,5.S3 1,949.

.......... 27,.?95 27,395 27,395

83,478 5,225 5,225 5,225

1,904 1.904 1,904

'• '4.35i 4,041 310

18,240 18,240 18.240

'8,744 8.744

• 8,744

. -. 67,981 67,981 67,981

•2,526 2,520 2,520

92,222 49,922

49,922 42,300 ...... . • . . . ^ . . •

" ...... 25.365 ...... ....'..',

'2'5",36.S . 325 325

" 3 2 5

9,104 9,104

...... 9,104 250 250

" " 2 5 6

"6,479 6,479

•' '6.479 5.712 552-.

...... 552.

5,160 7.161 1,663

"1,66.3 5,498 4,175 4,175

""4,i75-954

. 954 . . ' • • . .

954

49.922 . 49,922

....... 49.922

• •

•

-'......',

. . . . . t

"2.31 i . 2,311

""2"..iii, 83 83

... .'.,,. 83 ,

...... "

869 809

...... 869 112 112

" i i i .......

....... ...*.•

4.175 4.175

.4.175 954 954

954

.42.300 .

'4"2".366 . . • . • . .*

• ....•

'2'5',365

.*••..

. . . . r .

25.365 325 325

. 325 .•>••,. 6,793 6.793

*..•'.< 6,793 .167 167

-....'.; 167

*..*..... ..;.,..

' "5,616 5,610

" 5,616 • 5.600

440

"'446 5,160 7.161 1,663

•

1,663 5,498

......

...'*..

.*,...

38,110 38,110 38.110 ...... ...... 6.127 5.775'. 352

8.593 , 8,593 6.644 1.949

27.444 27,444 27,395

49 9,771 2.329 2.329 1.153 1.176 1.912 1,912

• 1,904 8

• «>>•• • . " • . ' •

19,338 19,338 18,240 1,098 7,475

: 6,740 6,640 100 735

4,896 4.692 4,680

12 204

. ; • • • •

151.757 109,457 59,535 49,922' 42,300 21,466 20,956 i510

775254 51;889 51,889 . . ' . • • .

25,365 276 276

* r . • • .

276 . 73,707 12.000 12,000 4,072 7,928 4242 ^42

, , ; , , d 242 •4,351 4,041 310

5,381 5,381

* .'. • • • .

5,381 6,981 2,556 2,104 452 •

4,425 70.246 64,952 63.301 1.651 5.294 4.175 4,175

4,175 3,474 3,474 2,520 954

7,603 6,017 4,006 2,011

•> 1.586 1,002 968 - 34 3,075 2,065 1,989 . 76

1,010 997 997 983

- 14 3,938 661 661 259 402 40 40 31 9

169 162. 7

724 724 478 246 590

. 423 399 24 167

2,724 2,442 2,378

64 . 282

98 98

98 87

i 87 |. 50 i ."

» Includes short-term debtamouuting to $0,017,000. 6f'which.$6 million is for Massachusetts, 51,181,000 for North Dakota, 5«08,(MK>for New York, $302,000 for Louisiana, $299,000 for South Carolina, $227,000 for Virghiia, 5198,000 for Texas, and $2,000 for Georgia.

'• Includes assets of. all fiends, dedicated to the retirement of lone-term debt. '• Central organization. '>^- ' -'' IC^timated. «• Date of report of State College of Rlucation ia September 30, 1943, and that of Western

State College is September 1, 1943. 7 . ^ . ' ' Leased. * Prepared by W. I'aul Nowell under the sup<'rviHton of E. R. Gray, Chief, Governments Divi

For states for which nf> segregation of debt between general government and enterprises is "' "" •'••'"• •- '— **'" *"' ""-^i— "f -• -. When no segrega-

dependent agencies

- -_ .. ^ iiim'Cin.crpi,lEH:s is jihoxyn, all debt is for the central organization of geni-ral government. When no segrega­tion of general-Kovernment debt between'the central organization and i ' in shown,, all debt is for the ce tral organization

.'> Dependent agencies. —^ i Includes 56 million of shi/t-f-term loans,-which are completely offset. I Date of rer)ort of .State Board of Agriculture is December 31, 194.T. '' Date of report of Kent State University is Deceml>er 31. 1943.

; ' Date of reiKirt of State College of Washington is December 31, 1943 Bureau of the Census. •

• . T A B L E - 4

STATE FULL FAITH AND CREDIT DEBT, BY STATE: 1944*f . . (Dollar amounts in thousands) .. - •

Stale • Toial^

$2,320,745

2,239.365 2.237.416

1.949 81.380 01.698

. 53.623 8.075 1,521

139,056 127,954 108,947 : 19,007

1,502 25,173 14,833 10.340 4,712

16,356 13,829

. -2 .527 771

120,908

• ; • • • • 4 3

12.850 2.481

150.380 119.345 . 3 1 . 0 3 5

21,052 - 20,352

700 • 29.468

: , Serviced from General F

Total

$1,685,396

1,655,458 1,655,458 ,....,.,

•29.938 13.900 13,900

103 139.056 119,954 100,947

19,007 1,502

14,450 14.450

• • • • • • t

4.712

Vo,7i9 8,192 2.527

771 99,822

" ' " ' 4 3 11.280

• 2.481 . 25.649

25.649 . . . . . ' .

• 3.575 3;515

60 29,468

General Obligation

Bonds, Notes, '^."iind

Certificates.

$1,635,228

1.605,290 1,605,290

, , , •

29,938 8,557 8,i557

. . ". , 103

138,923 119,774 100,767

19,007 • 1.502

14,450 - 14,450

. " " 4 , 7 1 2 .

"l0.7i9 8,192 2,527

771 98,008 .

.'43 11,280

.....:. 23.669 23,669

' " " 3 , 5 7 s 3,515

60 29.468

Full Faith at levettne—-.,

Debt to Trust

. Fundsk;

$50 ' l68

50,168 50,168

" 5*343 5,343

" i i i ISO \ '.ISO'

: ! " • " "

.-«

. • *

" l' ,8i4

. -t .

-2,481 1.980

" 1,980

:...'!. /

if Cr-iHl I—.—-Serviced from Pledged Specific Revenue \

Total

$635,349

583,907 581,^58 - l ; 9 4 9 51,442

.47,789 39(723

8;075 1,418

• • . . . •

8,000 8,000

. . . . . . 10,723

383 iO,340

•5 ,637 5,637

1 • ' :

'2"l",686

. . . . . .

"i',576 ' '

l'2'4',73i 93,696 31.035 17.477 16,837

640

Serviced :, from

• Pledged •. i Taxes or

Funds

$455,092

455,092 » 453,143

1.9^9.

39,723 . 39,723

'.'.9'.''.

. ; . . . .

. . . . . . • ' 5,637

5,637

"1,576 . . . . . . 93.246 93.246

. r6",837 • 16,837

. . . . . .

Serviced from

Pledged Earnings

.$52,537

1,095 1,095

'5'l',442 8,075

" "8'.675^

. . . . . .

. . . . . . . . . . . . I-

^ . . . . • . . •

" Vo',723 383

10,340

• • • •

u •. . .

1. •

• :

• ;

31,485 450

31,035 640

, •

640

Serviced from

Payments of Local-Units'

$12j7,720 „

127,720 127,720

,,,*,.,. . . . . . .

V,4i8 . . > t

8,000 ' .8,000 ,

'• • • t--.- .

. . . . . . .

, 21,086

. . . .

• . . • . . . . .. .' . . . . . .

; . •

.

.,

Sinking-Fund

Offsets ~ to Debt Net Debt

Serviced ^Serviced from

General Revenue^

$467,463

457,804

9,659 / 344 344

. . . . . . ' • • • > . >

3,8'72 22,892 17.116

5.776 140

14.450 14,450 . . .

75 • .

"6,442 3,915 2,527

197 2,034

" " 4 3 1,539

. . . . . . . :..

, , , , , , , . . • . » - •

9 0 3d 60

3,066

from General Revenue

$1,217,933

1,197.654 1,197.654 • • • • ' . • * •

20,279 13,556 13.556

; . ; . . . ^ 103

135,184 97,062 83,«31 13,231

1,362 i . . , ...'..,

',', . • • . . * . .

4.637

' ' ' '4;277 4.277

" " • " 5 7 4 97,788

'"'"9,741 2,481

25.649 25,649

. . . . . . . . . 3 .485

3,485 . « . . . . . ' •

26.402

Grand Total . . :

General government. . . Central organization.

, Dependent agencieB. Enterprises

Alabama General government..".

Iv3 En t e rp r i s e s . . . . ; , O Arizona ^ Arkansas"

California . . . . . . . . . . . . . . General government... . Enterprises

C o l o r a d o . . . : . . . . . Connect icut .

General government . . . E n t e r p r i s e s . . . . . . . . . . .

Delaware*--F l o r i d a . . . . Georgia

General government . . . Enterprises «.

Idaho . lUInols . . I n d i a n a . . . . . . . . . . . . . . Iowa K a n s a s . . . . . . . . . . . . . . . Kentucky, . . . . . . . . . . . . Louisiana. . . . / . . .

General government ..r E n t e r p r i s e s . . . . . . . . . . .

M a i n e . . General government ; . , Enterprises '..

Maryland.

4

1 ^ w

O

Massachusetts . . • General gove rnmen t . . . ,

Enterprise's. . . . . . . . . Michigan T Minnesota Mississippi Missouri . . ' Montana Nebraska. . Nevada New H a m p s h i r e . . . .

General government . . . . Enterprises. , . .

New J e r s e y . . . . . New Mexico New Yorlt North Carolina North D a k o t a . . ' . . . . . .

General government; . . . Enterprises

Ohio Oklahoma . O r e g o n . . . . Pennsylvianla Rhode Island

General government. . . . E n t e r p r i s e s . . . . . . . . . . . . .

South Carolina : General government . . . - .

Central organization.. Dependent agencies' ' .

South Dakota Tennessee Texas -Utah , Vermont ."

General government. . . . Enterprises

Vlrfilnla.. Washington. , West Virginia. Wisconsin Wyoming . . , ,

73,814 68,972

4.842 15,814 82,230 23.804

. 80,654 2.685

15.172 12,790

2,382 96,154

1,451 611,797 118.238

21,086 19,786

1.300 7.257

26.836 22.270 97,645 27,593 26,731

862 60,482 60 ,482 58,533

1.949 27,395

. 8 3 , 4 7 8 5,225 1,904 4,351 4,041

310 ,18.240.

8.744.. 67.981

2,526

7,7.52 2.iS90 4.342

15.814 59,878 23.804

5.664 2.685

. 13.780 12.750

1,030 96,154

1,180 586,204 113,394

21,086 19,786':

1,300 7,257

26,836 22,270 97,645 27.593 26,731

862 5.987 5,987 5,987

' "2y,39.S 2,513 5,225 1,904 4,351 4,041

:310 18,240

8,550 2.250

'2,526

7.732 2.890 4.842 7.222

59.788 21,427

1,265 2,685

12.800 11.770

1.030 86.486

1,180 585,515 113,394

20,186 18.886

1,300 940

26,836 22,270 ' 97,645 27,593 26,731

862 4,843 4,843 4,843

"27,395

"'.'5.225 1,904 3,783 3,473

' 1*8,246 8.550 2.250

'2.526

8.592 90

2.377 4,399

980 980

9,668

"689

"966-900

66,082 66.082

22,352

'7'4',996

1,392 40

l . . « 2

" " 2 7 1 25,593

"~ 4,844

22.120

'74,996

66,082 66,082

232 '

2,513

568 568

80,965

194 65,731

1.392 40

1,352

271 25,5,93 '

4 , 8 4 4 '

r , i44 I, i44 1,144

•

54,4.95 51.495 52.54t

1,949

54,273 54.273 52,324

1,949

222 222 222

80,965

65.731 1 9 4 '

1,190 1.490

"7,222 15,738 21,427

1,203 ' 6 8 7

3,855 3,719

136 36.075

186 149.770

17.365 18.917 18.109

' <S08

.'17'.,03 16,668 38.110

6.127 .5 .775

352 , 4.843

4,843 ' 4,843

*2'7',395

"l',iS3 1,904

18;240 6,617

79

6iS42 1,700 4,842 8.592

. 44.1.40 2,377 4,4<il 1,998

9.925 9,031 i 894

60.079 994

436,434 96,029

2.169 1.677

492 7,257 9.328 5.602

59,535 21.466 20,956

510 1.144 1,144 1.144

2.513 4,072

'4,351 4.041 . 310

V.988 2,171

"2.526

t See statement of procedure.'pa8el93. • For stp.tea for which no seRregatioa of debt between general government and enterprises is

shown, all debt is for central departments, of the general government. Except for that of South Carolina, all full faith and credit debt is for central departments.

'' Debt to trust funds of $4,175,000 incurred by dependent agencies of Wisconsin is included with nonguaranteed debt serviced from pledged specific taxes or funds.

' Total debt serviced from payments by local units is $134,583,000. The amount reported here excludes Massachusetts tax title loans amounting to $6 million, which are classified as short-term loans, and Arkansas State Board of l-:ducati(in bonds amounting to $1,133,000.

• Prepared by W. I'aul.Nowell under the supervision of K, K. Gray. Chief. Government Division.

which areclassificd as nonguaranteed debt. "^ Includes assets of all funds dedicated to the retirement of long-term debt. " listimated. • . • ' State loans to local governmental units amount to $44,863,000. inclusive of the Massachii- .

setts tax title loans of $6 million, which are classified as short-term debt. « I.enm"! enterprise. •" Kffective. January 1. 1944. South Carolina assumed the'debt of the South Carolina State

Hospital and four educational institutions—Clemson Agricultural College, the University of South Carolina. Winthrop College, and The Citadel.

Bureau of Ci-nsus. >>

> •

it^

STATE EXPENDITURE IN WARTIME*

A.

ALTHOUGH the period of defense prfepa-jf \ ration and theiTwar^ has brought sub­stantial increases in the revenue side of state finances, state expenditure has re­mained fairly stablel This, however, should not-lead to the coftclusion that the war has virtually frozen state expenditure; on the contrary, various effects of defense and wartime conditions,ha.ve altered the finan­ces of the states, but these effects tendfed to (iounteract each other so far as the total expenditures are concerned.

Basically the responsibility for both the conduct and the-financing of the war be­longs to the federal government. Therefore, the impact of the war on state expenditure has been largely indirect. Salary raises and the increase in cost of materials led to high­er expfenditures; these, however, were offset by losses of personnel, to the armed forces and war industries, by reductions in services and maintenance, and by the re­striction of capital outlay to a bare mini­mum. An additional eixpenditure increase lies in the expanding provision for repay­ment of debt. Only one state function, that of schools, reflected-the war directly; an increase in school .expenditure for oper­ation and state aid was the consequence of the. need for training the appropriate number of war workers.

IMPACT OF WAR ON STATE FINANCE

Table 1 shows the development of state expenditure, revenue,r and outstanding debt. In 1943, as compared with 1940, the total general revenue r6sc 22 per cent (19 per cent if unemployment compensation taxes are excluded); 'the gross debt de­creased 19 per cent; a Ad the total general _ _ _ — : \ •

1 For the great majority of the states, the infor­mation reported is for the period ended June 30, 1943, after 19 months of war. Data contained in the Bureau of the Census semes oif Slate Finances are for the fiscal years ending on June 30 or the rnost recent date prior theretoV

* Prepared by Josef Berolzheimer under the suf>ervision of.E. R. Gray, Chiefs Governments Division, Bureau of the Census.

expenditure showed an increase of about 9 per cent (only 3 per cent if contributions to unemployment compensation funds are excluded).

As the fiscal policy of the states is tradi­tionally somewhat cautious and the gross debt during the last few decades was usual­ly the size of one: year's revenue, the states have been able to accumulate substantial reserves fbr postwar purposes and simul-

. tanebusly to reduce their 'indebtedness; thus the pressure of debt service will start at a minimum after the war. . Frorn a long-range view, however, the picture is less brightiMany necefesary capi­tal outlays have been delayed by lack of material and manpower, and poor main­tenance and repair service, partly a result of this lack, has* led to quicker deteriora­tion of buildings and roads; cons^erable construction- and even rnaintenance has been postponed deliberately in order not to impair the war effort.

RECENT I^EVELOPMENT OF EXPENDITURE

The two major components of state ex­penditure, the, cost for operation and the aid paid to local governments, represented, during the four years 1940 to 1943 inclusive, almost invariably about three-fourths of the total (if contributions to unemployment compensation funds are excluded). The amount for pperation was always slightly higher than that for state aid. Each in­creased about 9. per cent between 1940 and 1943; operation went up to Sl,908 million, and state aid rose to $1,782 mil­lion. The third largest part of expenditure, capital outlay, which in 1.940 was approxi­mately one-eighth of the total expenditure, slumped in 1943 to a mere twelfth afid was bielow the amount spent for debf serv­ice, which suddenly increased from 1942 to 1943 about 10. per cent. Contributions to trust funds and enterprises, e.xcept for the amounts set aside for future unemploy­ment compensation, represent only a neg­ligible portion of the tptal expenditure.

202

«r

\mm

REVEJ^UE AND, EXPENDITURE 203

T A B L E 1. G E N E R A L E X P E N D I T U R E , G E N E R A L R E V E N U E , AND T O T A L D E B T O U T S T A N D I N G

OF T H E S T A T E S : 1940-1943 • . (Dollar amounts in millions)

Item 1943 1942' 1941 • 1940»

GENERAL EXPENDITURE Total general e x p e n d i t u r e . . . . . . . . . . . . . . . . . . ; . . . . . . . . . . . . $5,892 Contributioiis to unemployment compensation funds.' 1,172 Total gener^ expenditure less contributions to unemployment

compensation fimds ; . . . 4,720

$5,844 1,076

45,491 •• 8 7 5

S5,421 844,

4,768 4,616 4,577.

Operation , Capital outlay.. Debt service. . . . . . . . . . Contributions to trust funds'* and state enterprises. Aid paid to local governments ,

1,908 468 483

79 1,782

1,862 619 428

70' 1.789

.1,790 676 424

. 56 1,670

Total general expenditure** for state government only (i.e., ex­cluding state aid).. ...\ .......

1,745 725'' 4240

56«

2,938 2,979 .2,826 2,950

. GENERAL REVENUE Total general revenue . . . . . . . . . . . . . . . 6,280 Unemployment compensation taxes 1,172 Total general revenue less unemployment compensation taxes. 5,108 Aid received from federal and \qcdX governments 836 Total general, revenue from own sources' (i.e., excluding aid

from other governments) 4,272

6,114 1,076 5,038

810

5,458 875

4,583 741

5,145 844

4i301 705

4,228 . 3,842 3,596

Excess of general revenue over general expenditure. Excess of aid paid over aid received.

DEBT OUTSTANDING (incltiding enterprise debt) — , 1 • ^ ' * , • •

Gross debt; Net long-term debt. i . . . . . .

388 946

2,946 2,306

270 979

3,268 2,548

'L ^ 3 3 -929

3,497 2,651

=276-922

3,643 2,571'

» Revenue and expenditure data for 1940 arc tentatively revised to conform to new Census Bureau procedure effective beginning •with 1941; the figures are presented ^nly to provide the basis for a rough- comparison with subsequent years.

b Contains a small amount of expenditure from trust funds. ' = Substituted figure from 1941; 1940 figure not available. '

'<! Excluding'contributions*t6 unempIoym',nt'Compcnsa'tion funds; • • • • > • . , , , • Excluding,unemployment compensadon taxes. ':•'; .Yote; Preliminary 1944 data are as follows: Estimated revenue from own sources, S4,-500 million; debt, 82,796. million (gross)

and 82,139 million (net long-term)—based on "State Tax Collections in 194^" and "State Debt in WA," StaU Finances: 1944, vol. 2," hoa. 1 and 2. . " "

Sources—Bureau of the Census reports, as follows; Expenditure and revenue—1940 data hotn^Financid Statistics of StaUs:^ 7940, vol. 3, revised to conform with changed C(nsus.Bureau procedure; 1941 data from "State Revenue and Expenditure in 1942" and "State Tax Collections in 1942," Slati Finances: 1942, vol. 2, nos. 1 and 2; 1942 data from StaU Finances: 1942, \Q\. 3; 1943 data from StaU Finances: 1943, vol. 3. Debt—Data for all years from "State Debt in 1944," StaU Finances: 1944, vol. 2, n o . 2 . . , . . ' ^ • : . •

T A B L E 2. F U N G T I O N A L I Z E D G E N E R A L E X P E N D I T U R E OF T H E S T A T E S :

(Dollar amounts in millions) . 1943

(Figures for debt service and for contributions to trust funds and enterprises are not available by functions. The total column, therefore, is only for operation, capital outlay, and state aid.)

Capital Outlay

Aid Paid

• - * • . »f . Functionalized Total , Function Amount ' Per Cent Operation

.; Tota l . . .• . . . . . . . . . : . . . . . . , . 84,158 100.0 , $1,907~ General con t ro l . . . . : . . . . . . 173 4.2 170 Public safety. 1. 148 3.6 134' H i g h w a y s . . . . . . . . . . " . . . . ; . . . . . . . . . . . . . . . . . . . . . . . 966 .23,2 236 Natural resources ; . 125 - 3.0 119 H e a l t h . . . . . . . . . . . . . . . , , . ; 61 1.5 57 Hospitals . . . . . . . . . . . . . " 268 6.4 242 Public welfare.. . . . " . ^ . . . 914 22.0 540 Correction;:.. . ; . . . . . , . . . . . ; . . : . . . : .0.. . . . . . . . . 80 1.9 . 75 Schools . ; . . . . . . . , . . . : . 1,113 .. 26.8 273 . L i b r a r i e s . . . . . . . . . . . . . : . . . . . . . . . ; 3 0.1 3' Recrea t ion . . . . ; , . . . . . . . . . . . . . . . . . . . 12 0.3 •• 8> Miscellaneous • • • •• •• 294 7.1 51

$468 2 5

408 A 1 18 . 1 5 18 0

• • . - • — - . , 4 . .

2"

" $1,783 1 9

322 2 3 8

373 — 822 0 —. 241

' • . •

204 THE BOOK OF THE STATES

- \

^' It is important to show how much the states spent for each of the different govern-mentaffunctions. The picture in 1943 is presented in table 2. Expenditures for debt service and for pontributions to trust funds and state enterprises are not func-tionalized, but this is no serious hancficap to an analysis, for they constitute only about 10 per cent of total state expendir ture. ' • • . • • . • •. o' ;• ;••

Almost three-fourths' of the (uriction-alized expenditure was made for only three functions—schools, highways, and public welfare. Thb position of these three functions changed in importance some­what during the last three years through the influence oif wartime conditions.

As for public welfare, the war man­power needs brought people back into em­ployment who might otherwise have been receivers of old-age assistance. O n ' t h e other hand, the improved financial situa­tion of the states permitted an increase in benefit rates, a' fact which accounts for a slight increase in the total public-welfare expense between 1942 and 1943. Public welfare was the third most expensive state function in both 1942 an(i 1943. ' 'H ighway expenditure, though still in 1943 the second most important.fvinctionin total state"expenditure (it was first in 1942), was about 15 per ceijt less than in 1942. Here also tHe war has had two opposing influences. .The policy of restricting capital outlay and decreasing maintenance work determined the downward trend of the total expenditure for this'. function, but somewhat offsetting this decrease were the salary and wage increases and the higher prices for road materials and equipment.

School expenditure rose in 1943 from . the second to the top position among state* government costs. Although there were a number of factors which tended to de­crease the amounts spent for educa:tion, such as reducing the number of teachers, increasing the size of classes, reducing pur­chases of eqtiipment, and curtailing the ' construction of hew school buildings, the forces increasing the educational expendi­tures were stronger. These included ceir-tain increases in salaries, sorhe building of new schools in wartime boom areas, and heavier inaintenance costs, especially for fuel. But most important was the increase

in the expense of vocational education of War workers; although'part of this cost has been borne by the federal government, -which augmented its aid to the states, the states themselves had to match some of' these grants and even contributed addi­tional funds of their own.

Schools, highways, and public welfare-^ these three functions are conjmpn to all of the states. Below is the expenditure for these three functions from'1941 to 1943; expressed as a per cent of the- total func-tibnalized expenditure of each ye^r:

Highways... . . . . ! .

1943

26.8 . . . . : 23.2 : . . . . ^22.0

1942

24.7 26.5 21.3

1941

23.1 26.1

. 21.4

A large part of the expenditure for these three functions is made in the form of aid paid to local governments. Of the pom-bined amount of expenditure for opera­tion, capital outlay, and aid payments, as ' shovfn in table. 2, the aid paid to other, governments was one-third for highways, slightly over two-fifths for public welfare, and somewhat below three-fourths for schools. •

Miscellaneous statfe expenditure, of which the local governments receive about 80 per cent, consists mainly in local"shar?s of state taxes given for unspecified lofcai purposes. , • What of the state's expenditure for its

own operation and capital improvements? In amounts aijd jjercentages of the total, the expenditure by function for 1^43 for combined operation and capital improve-rrients was as follows (amounts are in millions): . ' ' ' - - '

Amount Per Cent

•-• TOTAL. . . . . . . . General c o n t r o l . . . . . .

H ighways . . . . . . ^ . . . Natural r e s o u r c e s . . . . . : . H e a l t h . . . . . . . . . Hospitals . . . . ' . Public welfare. . . . . . . . . . Correction. . . . . Schools. . . . . . ; . . L i b r a r i e s . . . . . . . . . . . . . .

Miscellaneous. . . . . . . . . .

S2,375 .... 172 . . . . . 139

644 . . . ; 123 . .- . . 58 . . . . 260 : . . : 541

80 ; . . . 291 . . . . 3

. . . . 53

100.0 . 7.3

5.9 27.1

5.2 2.4

10.9 22.8-

3.4 12.3 0.1 0.5 2.2

r.cD

REVENUE AND EXPENDITURE 205

In order to give a more detailed survey tipn of the qualitatively or quantitatively of the operational functions of the states, important expenditure items (amounts are; the following 1943 data represent a selec- in thousands): f

Legislative... Executive Judicial. . . . . Staff services. Police... . . : ; Milit ia. . , . . . Other public"

safety. . ..,.

2,343 33,578

117,555 . 40,055

22,104

71,669

Agr icu l tu re . . . . . . ;\. .... $73,744 Other natural resources. • 45,744 Hospitals ; . . . . . . . . 200,819 Institutions for the

handicapped. . ....;.". j , ^ 41^536 Care in state institu- .

tioris. . . . . . . . . . . ; . . . . 9,903

General relief. . . . . .... Old-age assistance.... \ Aid to dependent

c h i l d r e n . . . . ; . . , . . . Aid to thfc blind. . . . . . Other piiblic welfare... Miscellaneous... . ,'..-.

531,500 320,271

81,711 15,592

. 31,339 50,720

• ' V

INTERSTATE COMPARISON

The extent of the total expenditure of the individual state depends'not only upon the size and the economic character of the state but also upon the division of functions between the>'i§tate and its locial govern­ments, the state's fiscal policy, and of course the services the'state furnishes its

population. The figures shown below give a quantitativ^e rather than a qualitative picture.

With the states grouped in descending order according to the percentage of the individual state expenditure (for opera­tion, state aid, and capital outlay only) to the expenditure of all states, the following picture develops for 1943: . .

Over'4 Per Cent

Total Per Cent, " 47.6

New York California Pennsylvania Ohio-Illinois Michigan ; Texas

4 to 2.1 Per Cent

Total Per Cent, - •• 20.3 . •

Massachusetts Wisconsin

•. New Jersey ; Indiana Minnesota Missouri Louisiana Washington

' • • ' , ' • • • '.

2 to 1.1 Per Cent

Total Per Cent, 23.5

Iowa North Carolina Oklahoma: Georgia . Virginia

• Florida • ' Alabama West Vii-ginia Kentucky Connecticut Tennessee Kansas . Colorado

.South Carolina Maryland Oregon

1 to 0.6 Percent . •

T o f J Per Cent, • 4:6 . ;.

Mississippi Arkansas Nebraska Arizona

,Utah . 'Maine. ' '

0.5 Percent and below • .

Total Per Cent •• . 4;2 ,

New Me.Kico ' Rhode Island I d ^ a Montana North Dakota • New Hampshire ' South Dakota Wyoming Delaware .

. • Vermont Nevada

. • • ' • • • . • • -

The distribution of the expenditures of the. individual states by character varies substantially from state to state. The dif­ferences originate mainly from the variety 6f distribution of functions between state and localities and, to a larger degree, from the unequal indebtedness and the method, 'of debt repayment and from the amount'* of capital outlay for the respective year.

Table 3 shows the relative importance, in descending order, pf the types of ex­penditure, by character, in the individual S(tates. For purposes of this analysis, the usual Census Bureau practice is varied by . excluding contributions to trust funds,

thereby confining the discussion to those governmental functions that are financed from general current and capital funds but not from reserve funds. The largest eiimi-' nated contribution is the unemployment compensation transfers, the states lacking discretionary control over these.dedicated unemployment insurance funds in the cus­tody of the federal treasury. Otheir trans­fers to trust funds, all relatively small, are fixed on^a long-range basis rather than by a year-to'^-^ear changing fiscal policy. For the year 1943 caipital outlay was at its lowest, but the other types of expenditure were larger than usual.

• ^ > » * &

•I mm,

206 THE BOOK OF THE STATES

T A B L E 3 . - ^ I M P O R T A N C E O P E X P E N D I T U R E , B Y C H A R A C T E R , W I T H I N T H E I N D I V I D U A L S T A T E S : 1943

A. For Operation

Over 60 Per Cent 60 to 50.t Per Cent 50 to 40.1 Per Cent 40 to 30.1 Per Cent Below 30 Per Cent

. Montana » New Hcunpshire

'V South Dakota . „/ > Washington

''"/'•• Vermont Connecticut North Dakota

. Oregon

Maine Kentucky Utah Idaho -Rhode Island Oklahoma Missouri Iowa Illinois Florida.

• • •

New MeKico Louisiana' Arizona

. Arkansas Texas WesrViifginia Delaware Michigan ' ' Pennsylvania. Nevada

• Nebraska Kansas

. . : « ' •

New Jersey Wyoming Ohio ' Tennessee Virginia Mississippi-^-Maryland"^ Georgia North Carolina South Carolina Minnesota Indiana . Alabama Massachusetts

Colorado California New York Wisconsin

r

B. For Aid Paid to Local Government^

Over 60 Per Cent 50 to 40.1 Per Cent 40 to 30.1 PerCent Below 30 Per Cciit

Wisconsin .

60 to 50.1 Per Cent

Colorado Indiana. Massachusetts California Ohio New York

North Carolina Delawai-e . •

_Kansas " Minnesota - New Jersey Michigan . Nebraska Alabama

Mississippi Arizona Maryland Iowa South Carolina Florida W y o m i i l g • New Mexico Texas Louisiana Tennessee

Illinbis Rhode Island West Virginia Virginia Arkansas Utah Missouri Washington Maine Oklahoma North Dakota

Pennsylvania Idaho Vermonf New Hampshire Orcgbn South Dakota

"Montana Connecticut Nevada

, • ' - • • • • , .

0

Over IS Per Cent

15 to 12.6 Per Cent

Georgia Kentucky

C. For Capital Outlay

12.5 to 10.1 lOto 7.6 Per Cent Per Cent

7.5 to 5 PerCent

Nevada Wyoming Georgia Kferitucky Texas Idaho Virginia Alabama

Oregon Nebraska Florida Utah West Virginia

Indiana Michigan « North Dakota \Iinnesota Arizona California

New Jersey. Wisconsin Connecticut South Carolina Illinois New Hampshire Tennessee Washington Arkansas Ohio South Dakota Missouri New Mexico Pennsylvania

Vermont Maine Montana New York

Kansas Louisiana Iowa Oklahoma Mississippi Delaware R^iode Island Colorado

Below 5 Per Cen*

Maryland Massachusetts . North Carolina

D. For Debt Service

Over 15 J'er Cent

15to 12.6 Per Cent

12.5 to 10.1 PerCent

10 to 7.6 ' Per Cent

7.5 to 5 Per Cent

Below 5 PerCent

Pennsylvania Tennessee /\rkansas « South Carolina Maryland Virginia Connecticut Oklahoma New York Mississippi

Missouri North Carolina Louisiana

> West Virginia

Vermont Oregon Minnesota New Mexico . Alabama . South Dakota Maine

Rhode Island Georgia Nevada. New Jersey Illinois Massachusetts

Idaho Utah California North Dakota New Hampshir Montana Colorado Kansas

- ' . . / > •

Delaware . Washington

Texas , Michigan

e Iowa Wisconsin Wyoming Arizona Indiana Kentucky Nebraska Ohio

-Florida

Lclffii

REVENUE AND EXPENDITURE 207

The reasons" for the high percentage of state aid and the low percentage for oper­ational expenditure in the states of Cali­fornia, Colorado, Indiana, Massachusetts, New York, Ohio, and VVisconsin can be found in the fact that in those states the aid given to the local governments for the three most important functions—highways,'^ public welfare, and schools—is especially high, ranging from about 27 per cent to over 98 per cent of the combined expendi­ture for state operation and state aid. In addition, in four of these states —M^^ ssa-chusetts, New York, Ohio, and VVisconsin —a substantial part of the state tax revenue is returned to the locar governments for unspecified purposes. The amounts rep­resent the bulk of the so-called "miscella­neous" expenditure, TheApercehtages of state-aid payments to the/ combined ex­penditure for state operation and state aid, based on 1942 data, were as follows;

High- Public ci School . Miscd- . \yays Welfare laneoiu*

California.. . . '. . 71.9 95.8 84.0 (b) C o l o r a d o . . . . . . . 54.5 98.1 47.1 Q>) • Indiana. 70.4 89.8 76.6 (»>) Massachusetts... 87.3 .67.4 ,61.9 84.2 New Y o r k . . . . . . 61.0 93.1 92.7 85.7 Ohio. . . . . " 71.5 26.9 85.4 82.4 Wisconsin.. . . . . 98.5 94.8 53.8 96.0

• Bajcd on 1942 data;'1943 data not. available. Consists of ex­penditure not included in any of the 11 major functions; these expenditures are largely composed of shared taxes not ear­marked for any specific local purpose.

t> Not computed, because base u so small; •. ••.•

COMPARISON WITH 1942

• Expenditure of the individual states in 1943 ranged from 81 to 124-per cent of the prior year's expenditure. Twenty states in­creased and 22 decreased their expenditure significantly, while in five the expenditure underwent practica:lly no change. For the remaining state, New Yorkj the 1942 figures are substituted for 1943, as already mentioned J because of its change of fiscal year. «

Substantial deviations from the general pattern of capital outlay decreases and debt service increases in 1943 are seen in a few instances. Here the growth of capital outlay (or sometimes the less than usual decrease) may partly be explained by ex- • penditure made according to the National Defense Highway Act of 1941, as in Cali­fornia, Georgia, and Washington. The in­crease.in capital outlay as compared with the 1942 outlay was highest in Texas,' owing to an abnormally small expenditure for this purpose, in the earlier year. As to debt service, the nlost outstanding devia­tions from the general pattern are the states of California, Kentucky, and Wy­oming, each of which had a decrease in debt retirement because of an abnormally high amount of debt retirement in the'pre-vious yearr~The~^r cent change in state expenditure (totaliliitms contributions, as explained earlier) from^942 to 1943 is indicated in the following table.

United States,

A r i z o n a . . . . . . Arkansas

Connecticut... De laware . . . . . Florida Georgia.

Indiana. .

1943as Per Cent of 1942

98.8

. . . 118.1

. . . ,94.3

. . . 110.7

. . . 82.2

. . . 96.9

. . . 103.3

. . . 88.1

. . . 89.6

. . . 122.7 . . 101.5

. . . 104.7

. . . "94.1

. . . 93.6

. . . 92.6

1943 as Per Cent of 1942

«1943 as Per Cent of 1942

Kentucky. . . . . 94.8. Louisiana..; 89.4 Maine. . ; .,.'. 89.1 M a r y l a n d . . . . . . . . . . 93.9 Massachuse t t s . . . . . . . . . . . 95.3 Michigan. 98.8 Minneso ta . . . . . . . . . . . 90.7 Mississippi. . . . . . 94.6 M i s s o u r i ; . . . . . . . . . . . . . . 96.3 Montana.. . 87.0 Nebraska : . . . . . . 91.5 Nevada. . . . . . 104.1 New H a m p s h i r e . . . . . . . . . 84.9 New J e r s e y . . . . . . . . . . : . . 96.3 New M e x i c o . : . . . . . . . . . . 93.3 New York. . , (<=) North Carolina. 94.5 \

North D a k o t a . . . - . . ; . . . . 84.5 O h i o . . . . ; . . . . . 97.6 Oklahoma. . . . . . . . . . . . . 113.3 Oregon. 95.2 Pennsylvania. 105.7 Rhode Island.'., 105.0

'South Carolina. 96.6 South Dakota . 82.9 Tennessee. 100.7. Texas . . ; . v . . . .\ 125.3 Utah..-.. . : s l . . . . . . . ; . . . 110.4 Vermont". . 81.9 Virginia . . . : . . . . . .114.0 Washmgton.'... . . . 107.9 West Virginia 89.9 Wisconsin 106.5 Wyoming.: . . . . . . . . '. 95.8

«Not computed; 12-month 1943 data not available.

w

GENERAL EXPENDITURE FOR OPERATIOJ^, BY FUNCTION AND BY STATE: 1943 > (Dollar Amounts in thousands) :

o 00

Total • • • •• ^ < ,

Per Cent General Stale Amount of 1942' control

" T o t Q l . . $1 ,907,911 102.5 $170,371

A l a b a m a ^ r r r ^ > > - . . . . . . . . . . . . 23,818 113.5 2,635 A r i z o n a , 1 4 . 2 5 1 103.2 1,091 A r k a n s a s . 22,441 112.5 2,281 C a l i f o r n i a . : 96.534 105.5 14,306

C o l o r a d o . . . ' 15.602 100.6 .1.741 C o n n e c t i c u t 42,185 102.8 - 4.299 D e l a w a r e , 5.625 99.8 788 F l o r i d a • 33,311 95.2 '2 ,737

G e o r g i a . . . . ' 30,571 110..3 2,588 I d a h o . . . . 11,779 109 . t . • 607 I l U n o i s 127,375 1 1 0 . 6 ' 10,516 I n d i a n a . . . 33,176 .95 .1 3.250

I o w a . . . . ' . 44,780 104.6 2,620 K a n s a s 22.623 101.0 2,726 K e n t u c k y . . , : . . . . . . • 35,510 110.3 4,185 L o u i s i a n a . 49,662 102.7 4.0S2

M a i n e . . . . . 17,625 99.7 J,-226 M a r y l a n d . . . . . . 20,553 100.5 <^,93S M a s s a c h u s e t t s . 52.502 103.0 7.292 M i c h i g a n 9,5,932 103.2 6,425

M i n n e s o t a . . . . . . . . . . . . . . . . . . . . 36,525 100.1 ' 2.902 M i s s i s s i p p i . 18,037 92.3 «'1,481 M i s s o u r i 57.069 93.5 4,070 M o n t a n a . . . . . . . . ^ 1 3 , 9 5 3 104.7 808

N e b r a s k a . 13,578 96.3 996 N e v a d a 3,842 96.3 466 N e w H a m p s h i r e ; . . . . . : 12,106 98.2 965 N e w Jersey.: . . 47,272 96.7 5.765

N e w M e x i c o 11.487 -95.1 . 1.422 N e w y o r k * . . . . . 143.222 100.0 30,143 N o r t h C a r o l i n a . 33,889 112.6 2.234 N o r t h D a k o t a . . 11,324 -99.5 749

O h i o . 98,655 99.7- 6,484 . O k l a h o m a 51.753 108.5 3,103

O r e g o n . . ; . . . . . # . . . 29,218 99.8 .1,870 P e n n s y l v a n i a . . . . . . . ,175,416 88.2 13.144,

R h o d e I s l a n d . 12.108 108.3 , 1,884 S o u t h C a r o l i n a . . . . 19,821 95 .2 , 1,510 S o u t h D a k o t a 12,522 101.4 723 T e n n e s s e e . 26.040 100.8 1,769

T e x a s . . . . . 99,271 133.3 6,378 U t a h . . ; . . . . . . . 18.007 99.3 1,191 V e r m o n t 7.766 ' 95.9 858 V i r g i n i a 34.245 107.7. 3,851

W a s h i n g t o n 58,959 111.1 2,621 W e s t V i r g i n i a 33 ,056 99.9 2,050 W i s c o n s i n . . 28.274 102.7 3.134 W y o m i n g 4.641 9 6 . 8 . 500

* Diita are for the fiscal year 1942. See footnote a. table on page 210.

Public safety Highways

Natural resources- Health

Hospitals and iiisti-tutionsfor the handi­

capped Public welfare Correction Schools

Libra-ries\.

Rt^ea-tion

Miscel­laneous

$133,828 $235,638 $119,488 $56,535 $242,155 $540,316 $75,428 $272,654 $2,510 $8,268 $50,720

1.856 598 649

17.917

1,042 3,082

: 456 1,956

1,592 371

9,252 3,0.30

2.006 1.076 1.479 2,491

1.118 2.095 5.784 5.287

3.541 788

2,182 710

982 100 650

6,355

529 15,092

1,975 466

5.133 I.ISO 1.327

11.189

1.688 1.255

36F 1,101

4,280 870 364

2,065

2,095 1,718 2,322

396

3.530 1.430 3.312 9.799

3.016 7.028

894 2,498

2,515 1,838 6.971 6.387

4.929 * 1 5 7 6,551 5,450

1 , 6 ^ 2,938 4,122 6 ,86 \

8 ,115\ 2,363 \

, 4 ,824 \ 2.381 \

• 2.604 \ 1.013 \ 2,734 i 6,033 i

ri 1,409 ; i

12,369 • '•• 10,084 ;

1,936 !

15,289 4..V58 • 5.153 i

22,523 ;

.1 .279 ! 2,279 2,143 • 2.095

12.799 r l i593 , 1.425 8.367 '

4.672 8.739

261 916

2.798 1,093 2,160

10,903

1.675 1.712

450 4.951

2.097 1.398 4.512 2.333

2.202 . 1,868. 2.024; 3,214

1,766 1,734 1.711 3,958 • /

3.468 2.220 2.291 1,215

1,387 407 994

2.376

891 7.233 2.990 636

.3.213 2.030 3.374 6.270

429 2.082 831

1,816

4,797 1,225 673

2.647

3,083 1,885 3,682 784

1,010 361

1.045 3.360

521 937 236

1.314

1,841 339

3,093 997

787 900

1.824 823

479 1,166 1,833 2.900

1,061 1(454 1.067 321

.592 161 274

1.336

482 4,865 1,057 443

1,675 9.36 548

3,351

399 1.172 341

1.855.

2.023 383 323

1.691

691 694

1,338 236

1,781 541

2.179 12,462

2,580 •6.9'47 -1,097 2.488

2,542 419

14,580 4,828

4,905 2,268 2,557 6,790

2,183 4.229

15,252 13,671

5,125 1.839 4.191

915

2.039 101

1.324 9.641

. 6 7 7 43,267

2 , 8 6 6 " 1,154

7,774 3.324-1.734

23.555.

2.041 2.203

880 1,611

5,359 785 779

5,121

2,458 2,515 4.096

. 482

780 6.566 6.161 2,734

450 10.201

524 10.534

10.287 4.878

52.388-2.139

16.970 609

8,038 15.412

6,610 445

1,775 37,569

2,007 4,193

30,365 5,205 ,

348 912 ,

3,074 5,781

3,129 6,103 1,165^ 3,475

43,391 28.059 9.842 74i945.

981 4.537 4.665 10,780

44.709 7.975 1.854 1.141

35.689 9.825 905 191

1.953 287 445

4,476

897 1,651 209 910

625 251

5.582 1.959

1.223 1.147 1.322 1.086

502 1.709 3.922 4,425

1,503 485

1,438 291

843 120 284

3,204

257 10,008 2,851 234

3,228 1.004 549

< 4,797

537 514 262 946

2,094 259 38r

1,220

957 768

1,566 247

6,955 2,021 3,714 17,095

, 3.382 4.212 775

5,380

5,891 1.440

16.243 6.713

.8.379 7.429 6.666 9.694

1.711 3,619 5,882 12,444

7,579 " 2,876 5,049 1,892

-3.467 383.

1.519 3.853

2.498 10.837 7:998 1,996

9,875 7.250 4,170 14.279

1.166 3,713 2,153 3,373

14,970 3,448 852

7,269

5.906 4.161 9,742 735

,34 • 4

64 173

29 -•• 7

162 69

41 46 84 ,82

5 13 139

23 8

35 90

11 267 54 15.

81 19 66 101

30 17 12

41

' 24 91

27 30 132 10

2 12 24

309

6 12 120 '497 17 6 il5 29

32 18

• 394 '300

;75 235 35 69 15 105 91 . 95

i3 9 92 238

159 51 101 9

3i 10 77

220

44 1,108 22 13

194 80

. 48

. 409

126-w5C-35 120

163 23 24!-154 !

90 89 260 20

484 247 407

3.000

280 1.499 173 499

532 213

3.682

i.nx 449. 339 744 464

300 . 628

4,753 , 2.072

1.060 ' .274 1,352 206 —

264 161 176

2.618

138 : 9.930 593 207

2,318 ' 440 537 8.S3 .

.1,548 • "" 464

109 574

1,658 255 209 628

670 582 836 124

m-Jer^

GENERAL EXPENDITURE FOR CAPITAL OUTLAY, AID PAID TO OTHER GOVERNMENTS, AND DEBT SERVICE, BY STATE: 1943

(Dollar amounts in thousands) JS^

' r-" Capital Outlay v , '• Aid Paid to Other Governments ^-^ r- Total ^ , '• Total '• , , Specified Purposes—

Per Cent High- Per Cent Uiispeci-" \ , ^ of ' ways .of fied Pur- High- Public.

Stule Amount J94Z • only Amount 1042 posei Schools ways Welfare

T o t a l . . . . . . $468,105 75.7 $408;624 $1,782,298 99.6 f 231.518 $822,462 $321,561 $372,877

A l a b a m a ; 11,001 115.2 10,273 29,569 113.2 2,475 14,008 9,571 2,896 A r i z o n a 2,901 . 58.1 2,796 " 11,343 99.0 3 ,300. 6,618 1,382 A r k a n s a s . . . . ; . . . . . . 4,053 121.5 3,759 10,971 108.5 77 8,548 2,287 : , . C a l i f o r n i a 34,570 102.0 30,996 186,811 95.1 2,738 89,457 25,110 62,22.2

C o l o r a d o 3,090 57.3 2,935 30.585 106.3 78 . 3 , 0 0 6 ' 3 ,618 23,411 C o n n e c t i c u t 6,631 47.5 5,317 7.109 95.0 2,669 1,735 1,530 969 D e l a w a r e . . . . . 754 28.2 637 , 5,548 ,104.4 . . . 4,800 382 233 F l o r i d a . . . ; . ; . . 8 , 4 4 8 " 77.7 8 , 0 5 3 ' 22,480 87.0 1,772 13,107 7,088

G e o r g i a . . . . . 19,188 135.2 17.971 25,057 116.4 . . . 20,127 4 , 3 4 0 " 590 I d a h o 3.806 -75 .1 3.332 3.673 100.2 522 2.551 . 6 0 0 I l l i n o i s 22,564 93.6 19,428 71.875 99.5 18,193 19.120 29,947 I n d i a n a . . . . . ; . . . . . 12.586 60.7 1X)..39.4 57.862 106.4 • 1.815 21,973 15,186 18.820

I o w a 5.644 47.9 4.835 -31,549 95.6 14,038. 1,915 15,393 21 K a n s a s 3.825-^ -41.9 3.579 24.003 100.8 7.643 1.866 4.654 9.754 K e n t u c k y . . . . . 12.387 75.1 10,771 11,237 104.6 . . . 10,544 670 L o u i s i a n a . . . ' 6,865 50.5 6,183 30,538 90.4 12,492 17,298

M a i n e . . . . ' 2 ,400 44.5 • 2,138 6.502 94.1 311 2 .644 2.718 540 . - M a r y l a n d . . . ; . 2.311 25.2 1.161 20.977 100.8 . 2 . 0 7 4 5.758 6.240 6.882 O M a s s a c h u s e t t s . " : . . . 6,033 84.3 5,679 88,073 99.1 25,937 9,570 10,985 40,575 O M i c h i g a n . . . 22.940 108.9 19.785 89.849 96.5 5,269 49,934 28,423 3.676

M i n n e s o t a 10.330 56.9 10.090 43,808 94.5 585 17,350 6,119 18,832 M i s s i s s i p p i 3,131 48.9 3,080 : ^ 18,891 106.0 3,855 9,356 5,680 . . . •. M i s s o u r i '.:. 9,113 64.9 8.371' 2.1.725 99.4 23 ,584 . . . . . . M o n t a n a . . ; . , . 1,508 29.1 1,482 2.213 . 9 7 . 9 60 1.588 . . . 510

N e b r a s k a . . . . . . . . 4.485 71.5 4.291 13.327 95.3 . . . 848 2.9.38 9,514 N e v a d a 3 ,169 90.8 2,866 833 140.0 2 4 0 . 584 . . . 4 N e w H a m p s h i r e : . . . .1.577 39.2 1,393 2,432 114.1 1,159 1,228

: N e w J e r s e y ; . . . . 11,989 106.9 11,071 51,471 99.9 5.620 25,932 ljO,214 9.221

• N e w M e x i c o . - . 1.966 ' . 3 7 . * 1.711 7.086 141.9, 523 6.241 199 N e w Y o r k " 45.101 (") 30.563 299,643 (») 58,975 137,872 19,387 81,880 • N o r t h C a r o l i n a . . . . . 3,489 .23.7 3,337 42,255 ' 107.4 1,293 34,116 . . . 5,750

. N o r t h D a k o t a 1.969 5 3 . 2 . 1,916 . 3,918 - 7 9 . 9 . . . 2,095 . 1 , 2 4 8 532

O h i o ^2 ,354 9 3 . 0 - 20,598 132.267 96.7 17,922 57;795 38,403 15,997 • O k l a h o m a ; 6,338 68.6 5,477 .20,777 91.2 . . . 12,150 8,322 . . .

O r e g o n 7,149 67.4 6,849 6,472 124.1 191 3.563 2.625 P e n n s y l v a n i a 33.064 58.6 29.701 73.278 81.5 5,389 54,947 11,811

R h o d e I s l a n d . . . 1,338 61.7 1.155 . 6.201 119.3 9 0 5 ' 988 . . . 4.099 - S o u t h C a r o l i n a 5.287 46.1 4,264 19,456 105.9 2 . 1 6 9 ' 11.880=. 4.994 274

S o u t h D a k o t a . . . . . . 1.603 37.2 1,289 2.238 92.8 205 1.373 480 138 T e n n e s s e e . . . . . . 6,122 4 3 . 9 - 4.694 20.556 102.7 2.002 11,710 6,665

T e x a s : . . . ; . . . ; 41.350 145..i 35,519 64,242 106.6 2,166 46,547 14,618 " . . . U t a h . 4,181 91.7 3,455 7,209 125.8- . . . 6,527 682 . . . V e r m o n t . 996 41.0 940 1,698 67.3 6 921 763 V i r g i n i a . . T . . - . . . . 15,288 61.8 14,862 2 3 , 4 0 2 . 117.2 4,604 13,874 1,046 3,529

. ' W a s h i n g t o n 8,025 109.7 6,629 19,795 98.4 4,225 ' 5 , 0 2 1 7,673 2.542 •West V i r g i n i a . 9.157 51.2 8.068 -20.516 102;3 , 600 18.150 . . . 1.766 W i s c o n s i n .•. 12,669 74.6 11.773 85.297 113.7 35,209 11.363 17.631 16.450 W y o m i n g 3 .360 83.7 3.158 3,681 120.3 405 1.207 766 1.303

"Da ta are for fiscal year 1942. See footnote a, table on page 210.'

Other

-Total--Debt Service-

PerCent "f

Amount J 942

-Provision for Debt Retirement—s ,. —Total V- Direct Payments

Per Cent Redemp-,intoSink-Interest Amount of 1942 tion in'g Funds

$33,880 $483,004 112.9 $101,092 $.381.91-2 121.4

619 43 59

7,284

472 206 133 513

7,575 251

8,805 24,874

2,821 12,229

338

7.578 1,545

19,080 ' 704

1.372 2.652

407 12.938

2,964 10.239 12.393

3,629

10.948 7,284

15,588 1.189

134 749

, 1.216 9.665

123 ' 2 . 4 9 1 1.529 90.204 i .096 ' 13.363

43 1.302

2.150 ' 774 .305 16.433

93 5,329 1,131 107,694

209 . 2,123 139 10,360 42 . 1,870

179 14,720

4,615 68

182 86 23«

748

289 23

1,006 2.547

922

i4i 55

27 • 5

45 484

911

" 8 349

334

4.644

4.174 2.341 1,3.33

16,303

2.185 9.181 1.536

121

177.9 106.8 104.9

26.0

69.1 . « 4 . 1 116.6

202.7 160.3 103.0 84.7

96.4 131.5

12.0 80.5

82.1 142.7 62.3 46.1

99.3 66.1

187.9 .129.9

142.6 430.5

62.9 72.1

105.8 (")

"94.0 67.6

115.9 370.7

96.5 465.7

97.0 166.9 64.1

205.1

115.7 747.9

98.2 926.3

114.6 3.0

300.6 27.1

3.153 4.422 309.4 160 91 78.4

•5.027 3,778 .370 .4 4,910 19,964 22.3

686 2,135 64.6 276 11,953 . 381.0 107. 231 124.2

349 7,229 ' 211.1 53 1,492 165.4

5.971 13.109 107.7 282 422 79.3

48 1,324. 101.3 648 2,004 151.6 253; 154 4;9

5,076 7,862 82.4

796 2,168 79.0 1,506 8,733 156.3 2,744 9,649 58.1

. 1;774 1,855 37.3

3.235 . 7.713 109.0 3.031 4.253 83.3 3.63? 11,956 177.2

• 268 921 146.9

45 24

305. 3,566

849 1,64? 110.2 22,053 68,151 (•) 5,187 8,176 103.6

: 915 : 387 39.1

452 322 144.4 1,025 15,408 '506.2 1.262 4,067 99.3

; 7,340 100,354 662.1

985 2,126 1,113 4,529

$216,335 $165,577

2,413 12,009 91

3,52b 19,373

89 211.9 725 456.0 911 57.1

6.099 70.6.

1,138 103.6 8.234 196.8 •757 52.5.

10.191 378.3

715 3,459 121.5, 44 2.297 . 847.6 1^6 1,147 100.0 792 15,511 1,643.1

478 2,730 291 95

1,707 124.1 6,451 106.1 1,245 457.7

26 . 8.8

258 . 591

365 1.250 231

576 902

.9.366 311

273

'so 1.759

2.154 23:

9..\01 438

4,758

11,784 7

502 : 3,202

115 58,741

96 211

2f{4 4,768

86 92.560.

970 2.672

17 151

521 279

1.147 1,272

630

1,24.5 26

1,770 10,703

6,653 590'

3,743 111

1,051 2.004

74 6.103

14 8.710 348

1,417

2.955 4;253 172 914

i89 5 725 / 409 2.897

1,527 9,410 8.080 176

38 10.640 .. .981 7.794

168 5.562 740

10.040

2.938 2.018

14,239

1.077 6.451

210 THE BOOK OF THE STATES

s?fc-

SUMMARY OF GENERAL •EXPENDITURE, BY CHARACTER AND - / BY STATE: 1943

" (Dollar amounts in thousands) - " • - • < , . . • . " ' . . ' ' ' " " • . - . " . , . . •

•'-••.' ^ ' Contribu-• - ' . *. iions to

• - \ Total • . : trust funds -7 :—^- ^-^ and to

. • . • Pef" . - state Cent Aid paid . . . govern-

of . ^ to other Capital Debt ment eri-'S.tate Amount- 19.42' Ofi^atidn governments outlay service ter prises

T o t a l . . . . . . . . . . . . $5,892,143 100.8 $1,907,911 $1,782,298 $468,105 $483,t)04 $1,250,825

•lit_-Alabama.--r-r^--.~-.-r^-r-. 8(5',1-S2-------.,118.6 23,818 29.569 11,001 7,575 : 14.189 . A r i z o n a . . ; . . . 32.914 98.8 14.251 11,343 2,901 251 4,168 Arkansas 53.260 - • 112.8' : 22,441 10,971 4.053 8.805 6.990

•California. . . ' . . . . . . . . 489.691- 93 .5 . 96,534 186,811 34,570 24.874 146,902

Ck>iorado 58,791 93^5 15.602 30,585 3,090 2,821 6,693 Connecticut 97,518 107.4' 42,185 7,109 6.631 12.229 29.364

. Delaware 13.699 '83.2 5.625 . 5.548 754 338 1.434 .F lor ida . . . , - . , . . 75.080. 93.5 33.311 22,480 8,448 . . .10,841

Georgia . . . . . . . . . . ; . . . 96,720 122.6 30,571 25.057 19.188 7,578 14.326 Idaho 24.722 - 109.6 11,779 3.673 3.806 1,545 3,919 Illinois 334.020 103.8 127.375 71.875 22,564 19,080 ..^ 93.126 Indiana 140,003 99.2 i . 33,176 57,862 12,586' 704 35,675

I o w a . . . . . . . ; . . : . . . . 91,488 93;1 ) 44,780 31.549 5,644 1,372 8,143 ^ Kansas'. ' . . . . . . 63,912 102.2 '*^ 22.623 24.003 3.825 2.652 10.809

Kentucky. .- 73.889 96.1 '235.510 . 11.237 12.387 . 4 0 7 14,348 L o u i s i a n a . . . . . . . 116,357 .93 .1 ' 49.662 ^ 30.53iS 6.865 12.938 16,354

Maine. . .;. . . . . . . 38.760 -97.2 17,625 6,502 2,400 2,964 - 9 . 2 6 9 Maryland 76,758 104.0 20,553 . .20,977 2.311 10,239 . '22,678 M a s s a c h u s e t t s . . . . . . . 196,712 92 .0 - 52,502 88.073 6.033 . 12.393 37,711 Michigan 268.934 95.0 95.932 . 89,849 22.940 \3,629 56,584

Minnesota . . 120,903 93.4 36,525 43,808 10,330 , 10,948 19.292 M i s s i s s i p p i . . : . 52.896 94.3 18.037 18.891. 3.131 7.284 5.553 Missouri 124.666 93.8 57.069 23.725 9,113 15,588 19.171 Montana. 22.695. 90.6 13,953 ^ 2 , 2 1 3 1,508 1,189 3,832

Nebraska. . . . . . . . . . . . 36,052 98.4 13,578 13,327 4,485 134 4,528. ^Nevada.. . . . . . . . . 11.784 120.1 3.842 833 . 3 . 1 6 9 749 3,191 New Hampshire 21,444 87.3 12,106 - 2.432 1,577 l'.216 • 4,113 New J e r s e y . . . . . . . . . . 186,775 93.9 47,272. 51,471 U,989 9,665 66,378

N e w M e x l c o . . 25,031 94.5 11,487 7,086 1,966 2,491 . 2 . 0 0 1 New Y o r k ' . . . . . . . . . . . . 747.091 lOO.O 143.222 • 299.643 45.101 90.204 168.921 North Carolina . . . : . . 114,606 100.7 33,889 42,255 3,489 13,363 . 21.610 North D a k o t a . . . . . . . . 19.847 81.5 l l i324 3.918 1,969 1.302 1,334

O h i o . . . . . . 307,946 91.5 98,655 132.267 22.354 774 53.896 O k l a h o m a . . 102,833 112.9 51,753 ,20.777 - 6.338 16.433 7*532 Oregon 63,068 .104.5 . 29,218 6,472 7,149 5.329 14,900 Pennsy lvan ia . . . 527,536 109.1 175,416 73,278 33,064 107,694 138,084

Rhode Island . ' . 37.569 103.7' 12,108 6,201 1,338 " 2,123 15,799 . S o u t h Carol ina. . . 61,150 96.3 19,821 • 19,456 ' 5,287 ' • 10,360 6,226 South Dakota . . . 19,131 84.2 12,522 2,238 1,603 1,870 898 T e n n e s s e e . . . 84.125 105.6 26.040 20.556 6.122 14,720 16.687

T e x a s . . . . . . 230.522 124.2 99.271 64.242. 41.350 4,174 ' 21,485 U t a h . . . . 38,428 119.0 ' 18,007 7.209 4.181 2.341 6.690 Vermont 13,853 84.9 7.766 1,698 996 1.333 2.060 Virginia. . . . . . . . . . . . . . . 103.207 115.6 34.245 . 23.402 15.288 16.303 13.969

• . • ' ' - " - • '

W a s h i n g t o n . . . . . . . . . 133;772 113;9 58,959 ' 19,795 ' " 8^025 2,185 44.808 West Virginia . . . 86,391 94.5 33,056 . 20,516 • 9,157. 9,181 14,481 Wisconsin 156,247 113,3 28,274 85,297. 12,669 1.536 28.471 Wyoming . . . , 13,195 97.1 . 4.641 3.681 3.360 121 1.392

"Data arc for the }rear ending Tune 30. 1942. the latest twelve- ' its fiscal year to end ion March 31 instead of June 30. The first month fiscal period for which available. New York changed fiscal year on the .hew basis ended in 1944.

%

ll«llf^t-^-M""^•"^:^'"'V:^^•^^•~-^^^•^^^

•^

. - - • 1 : 2 - • • ;

Finance Administfation

TAX ADMINISTRATION AND THE CONTROL OF EXPENDITURES*

IN MISSOURI'S 1943 legislative session, the the agencies concerned with direct assess-governors«.sought the enactment of a ment ofs^ublic utility property taxes arid

serid of bills which would have placed administration of sales, gasoline, and liquor traditionally scattered tax administration taxes as well as the supervision of; local ill the hands of a single agency. The op- revenue raising. The New Jersey legisla-position party in control of the Senate de- tion, which resembles the new Missouri featedthese measures after they had passed constitutional provisions in many respects, the House. Following sustained delibera- consolidates financial administration func­tion, the constitutional convention with, tions generally under the state's budget referendum approval placed in substance officer. Despite the far-reaching implica-the defeated measure in the fundamental tions of tlie legislation, however, it appears law, Hovyever, the constituti6nal provision that New Jersey has altered immediate goes further and ties tax administration tax administrative procedures very little, into the same agency that performs most In Idaho, a 1944 constitutional amend-other financial management functions, ment abolishes the State Board of Equali-, Illinois and New Jersey have passed tax zation. and sets up a State Tax Commis-

administration statutes of far-reaching sion. The practical implications of the significance, looking toward unified fiscal change, if any, are not yet apparent. ». policy—as several Ather states had done in There have been several recent miscel-, earlier years.^ The Illinois measure set up larieous changes in state tax administra-a Department of !l^evenue to supersede tion machinery. South Dakota has moved the Illinois .Tg.3c Gommission, which for- a step toward consolidating state revenue merly had functioiied" nominally as an agencies by holding the Division of Taxa-agency of the Department of Finance but tion responsible for handling license and actually on ah independent\ basis, and to gasoline taxes. New. York has adopted' a take over the tax work formerly handled new franchise tax law which makes mirior directly by the Department of Finance. It changes in procedures, and the New York did not consolidate enforcement of all stock transfer tax can now be paid in cash taxes, omitting mainly those under the rather than stamps. In.Utiah, the adminis-direction of independently elected officials, tration of income tax apportionment fea-However, the legislaJtion brought together tures are proving awkward, and the Tax

:'''••. '' ,.•' ' . Commission is seeking revision.2

ijarae§ W. Martin, "Consequences of Inte- Ingeneralstate tax administration. Other grated State Tax Adminbtration," Taxes—The than in the field of property taxation, there raAT^a^a^me, July 1943 pp. 372 ff. is evidence of comparatively little advance,

'Prepared by James W, Martin, Director, ^ ' . ' Bureau of Business Research, University of - . • • ~ ^ Kentucky. ^ Report, 1944, pp. 57-58. '

- • ' . . 2 1 1 • • " ' • • ' ; . - • • • - . •

^ -

212^ THE BOOK OF THE ST AXES-

\i-

hotwithstanding the structural develop­ments already outlined. However, certain istates are still showing sortie administra- • tive gains. Alabama has planned, although it has 'not yet effectedj. a program for administrative integration. Iowa and Kan-

: sas have made minor gains' toward state-local cooperatic3n in tax administration. Colorado, Louisiana, Michigan, and per­haps a few other states have made head-, way toward perfecting integrated admin­istrative machinery which had been ini­tiated prior to or about the beginning of the war period. North Carolina has placed in full operation the first p,i f'ma'fient state department of tax research.^'; -,

Several significant special studies have , resulted in immediate recommendations for state tax, administration legislation. The most discussed, though it contributed relatively little to administration as such, has been the report, of the Committee on Intergovernmental Fiscal Relations.' Deal­ing more pointedly with state tax adminis­tration is Dr. Ronald Welch's report to. the United States Board of Investigation and Research (Transportation Act of 1940) —not published for general circulation— dealing with transport taxes. The Maine Bureau of Taxation, pursuant to legisla­tive mandate, has made a careful study of taxation, esJDecially of the property tax, in that state. The result is a set of plans for improving all phases of tax administra­tion, especially for better assessments and for integration of state tax work in one department.-Whether the enabling legisla­tion will be enacted is still (February) unr certain. • '

OPERATING PROBLEMS.

Tax administration has been greatly in­fluenced during the war by lack of ex­perienced personnel. The shortage arises from competitive claims of the armed serv­ices and war industry. States which have long-established organization plans have suffered less than have those with more

* . - ^ ' - • ,

recently organized departments mainly because their employees on the average are older. One of the significant develop­ments resulting from the relative lack of efficient manpower is the extension of co-

.^Federal, State, and Local Government Fiscal Rela­tions, Sen. Doc. No. 69, 78th Gong., 1st Scss.

operative efforts to solve tax enforcement problems. For example, the National As­sociation of,Tax Adrriihistrators reported its own annual conference under the fol­lowing, headline: "NATA Conference Stresses Cooperation." The cooperative audit program under the sponsorship of the same organization has recently en­listed the interest and manpower of seven states. California has devised improved methods of meeting worker shortages, especially iri recruiting audit personnel,-Several" states, collaborating with tax-. payer groups, have saved clerical time by simplified tax reporting forms. In this con­nection also, at least fifteen states during 19,44 conducted schools for the training of assessors.

Less significant for administrative ef­ficiency than loss of manpower have been the inadequacies of transportation facilities ^ for field investigations. Rationing boards have sometimes authorized and. sometirnps denied adequate gasoline for field activity. Practically all states, however, have co­operated in the war program by restricting the use of motor" facilities.

• Although conclusive evidence is lacking, it appears that most states have lost ground in the property tax assessment field. To some extent the loss is illusory because it is reflected merely iu' reduced assessment ratios which are the consequence of ad-vancingprices. In some cases there are also increases in discrimination due to the erratic movements of particular prices in recent years as well as to impairment in assessing efficiency. For' example, real estate values in some communities have advanced rapidly and in other communi­ties nearby they have declined. However, the war manpower losses combined with other operating difficulties: appear to have effected important slumps in assessment efficiency, whether measured by the aver­age level of assessed valuations or by the extent'of discrimination.

. BUDGET ADMINISTRATION

The conception of "the state budget" has changed greatly in the past two decades. The term has 'meant successively (a) a schedule of proposed expenditures;

* Tax AdministratoTS JWwj, June, 1^44.

" }

11

FINANCE ADMINISTRATION 213

(b) a document showing an estimate of anticipated revenues fl«<f expenditures; (c) a plan iot preventing fiscal irregularities involving estimates of. revenues and ex­penditures by the executive, approval by the-legislature, and execution by the ad­ministration; and, finally, (d) a compre­hensive and flexible financial plan em­phasizing positive executive assistance to revenue collecting and to spending agen­cies in the economical management of-functional activities and stressing the general, rather than merely the fiscal, control possibilities of budgeting.^ Al­though some states have not advanced.be­yond the initial stage, several have made definite forward steps in recent years. Aside from defects in comprehensiveness,

. at least' Alabama, Kentucky, New York, and Virginia now have, elements of the most advanced idea of the state budget.

Although some changes in state budget practice during the war period have re­sulted from new legislation, mOst of them are the consequence of dynamic personal leadership, need for war-caused fiscal re­adjustments, and problems growing .out of the loss of skilled employees.. In certain, states outstanding personal efforts have l*reatly improved budgeting, notwithstand­ing war' difficulties, In many .cases, con­siderable readjustments in financial policy have been made.desirable due to lessened need for and possibilities of capital outlay and. to increased productivity of certain taxes. Personnel losses have almost in­variably been a handicap; in states which have been unable to retain most of the budget technicians, they have been' well-nigh fatal to satisfactory financial admin-. istration. On the whole,' however, read­justments have been reasonably successful.

' A more comprehensive analysis is found in the author's Southern State and Local Finance Trends and the.WaryVandtrbilt University Press and Univer­sity of Kentucky Press (jointly), 1945. Cf. Keen Johnson {Govcvnor), Kentucky Government 1939-1943, pp. 52 ff.; J.ames W. Martin, "Administra; tive Coordination through a State; Finance De­partment," Proceedings' of the Institute of Govern-merit Management, 1941, pp. 106 S.; Municipal Finance,, Institute for Training in Municipal Ad­ministration, 1941, pp. 84 fT.; Willard Day, "Manager Governrhent from the Point of View of a Manager," County Government in Virginia, Uni­versity of Virginia, 1942, pp. 15 fT.; and Gatheryn Seckler-Hudson, ^u^gWjn .* An Instrument of Plan-nihg and Management, American University, 1944.

Organization

Relatively little change in organization for budget administration has been effect­ed in th^ various states during the period of the 1940's. The installations in Idaho, Louisiana, Utah, and Wyoming have been perfected; and in all four instances the change in financial administration includ­ed the whole of a financial department rather than budgeting alone. The new Missouri constitution will place budgeting in the department which handles other fiscal administration functions.

Less sweeping changes have taken place in several other states. California provided a management expert to aid various agen­cies of the state government toward maxi­mum - productivity of each expenditure dollar, and he has apparently initiated very gratifying service.. California at the rnoment is considiering an annual, as dis­tinguished from a biennial, budget period; but prior to 1945 nothing along this line had been done. The 19.41 and 1943 Iowa legislatures amended the budget law to provide that appropriations lapse after the year-end and. to liberalize transfers be­tween appr6priations within a particular institution and.under certain limitations between agencies. The Minnesota Depart­ment of Administration has issued a new niantial of instructions for the use of spend­ing agencies in preparing estima:tes, for 1946-47. The New Jersey reorganization of 1944 made the head of the Division of Budgeting and Accounting also the depart- ,:

. ment head.^ New Jersey is .not included : "among the states now attempting a major

reorganization because its statute ap­pears to contemplate that the degree of integration shall be minor and that budget management shall be little changed as compared with previous policy. However,

V there is ia legal assignment of broad powers to the department head and he may work out a plan calling for a closely knit admin­istrative organization. In Washington, the 1941 legislature provided for a reasonably. modern budget administration.'^

In jieveral cases, spates have materially modified budget administration emphasis.

^N^^iv Jersej Laws of 1944, Chapter 1\2. ^ Cf. Uniform System of Accourits and General h'

structions, pp; 8e ff.

214 THE BOOK OF THE STATES

Alabama ha/exhibited far more vigor in the last three or four years than at any time previously. For example, extensive

.field studies have afforded a basis for posi­tive fiscal control action in many areas. After 1939, Kentucky state budget activity showed an unprecedented advance, though

. t h e energy displayed has declined during 1944 and 1945, due apparently to an actual difference in the governors' con-

' cepts of budgeting. Virginia, which just prior to the war period greatly extended the scope of budgetary activity to include

- general administrative management, ap­pears to have modified its position.some­what; 'but the state maintains the same

;Sort of vigorous financial control as for­merly. . •

Several states, moreover, have material­ly changed their budget documents. The 1944-46 Kentucky executive budget, for instance, omits certain schedules formerly provided/Maryland has improved the ap­pearance but perhaps not the content of the budget docurnent. South Carolina has shown remarkable solicitude fbr reflecting individual functional departments' policies in the published document. Several states have recently incorporated greatly im­proved executive messages and more satis-

. factory budget summaries. Some, however, . have failed to summarize otherwise effec­tive budget statements for the convenience

•'"'."Qf their legislatures and their citizens, ^ Tennessee pardy offsets inadeq[uacies in "; the executive's message by careful explan­

ations throughout the document.

Balancing Problems

.Marked increases and decreases in tax yields have caused less budgetary difficulty

. in view of their extent than might have been expected. The fact that highway revenues, which have declined sharply, are largely outside the scope of the states' budgets is a partial explanation. The war­time declines in motor vehicle and gaso­line tax yields have been accompanied by corresponding restrictions on road building activity. In other words, the reductions in revenue have corresponded roughly to lim­itations on the possibilities of economical spending. In most states, revenues for other governmental activities have in­creased riapidly, and many states have

been able to accumulate budgetary sur­pluses. To a large extent, these surpluses have been converted into postwar re­serves,, sometimes in the form of debt re­duction and consequent • increase in bor-

, rowing power, and sometimes in the form ;of actual investments. At the beginning of the war, for exainple. North Carolina had a heavy debt load. In the last two or three

•years, that state has paid off all debt which could be retired and has setf up reserves for the payment of the remaining debt. The, 1945 General Assembly earmarked more than $50 million for the latter purpose. In a number of sta:tes also, the plentiful revenue for general purposes has led to heavier expenditures. In: some, it has meant reduced taxes. And in others, it has meant that two or three of the policies have. been adopted at the same.time.

Several states have witnessed some ap­parent conflict of policy between their legislatures and their administrations. Ken­tucky and Tennessee, for example, in­creased appropriations, to. a very consider=^ able extent; but the administrations in both states through fisgal 1943 oi- 1944 carefully controlled expenditures so that increases were less extensive than the legislatures had contemplated. For the most part, the state governments have not been lavish in expenditure increases and,, as has been largely suggested already, some of them have taken occasion to develop constructive budgetary policies. Okla-homaandTexas, in constitutional revisions designed to prevent overspending, have reduced flexibility in certain budgetary practices. Oklahoma now requires that actual cash shall be available before any appropriation can be encumbered. Texas,, in an amendment effective January 1, 1945, requires that expenditures be kept within the estimate of receipts submitted by the elective comptroller. Texas also provides for encumbrance of allotments.

Subsidiary Fiscal Administration Functions .

"Accounting, reporting, purchasing, and debt management are significant both in themselves and because they are a means toward effective state budgeting. State ac­counting changes must oe made more or less continuously, but major installations have not been numerous during the war

mm'i''mm

FINANCE ADMINISTRATION 215

period. States which already had compre­hensive, modern accounting systems en­countered no difficulty with payroll de­ductions under the victory and pay-as-you-go income tax; many others had to make fundamental modifications to take care, of this wartime necessity. Meantime, Alabama, Idaho, Louisiana, New Jersey, Utah, and Wyoming have greatly extend­ed or completely revised their state ac­counting practices during the 1940's. The Idaho installation, eifected largely in 1942, is perhaps the most significant; though the auditor who directed it thinks the task in­completely performed due to recent per­sonnel shortages. The Louisiana installa­tion provides accounting contirol over rev­enues, expenditures, disbursements, and, apparently, properties.^ The system is comprehensive, but it is not yet working without elements of difficulty. In New Jersey, the changes have been effected pursuant to a general fiscal reorganization plan. The accounting program calls - for controlj rather than detailed accounts in the central office. The budget administra­tion procedure utilizes a quarterly allot­ment scheme, but the accounting provi­sions in the statute designed to implement this plan seem somewhat clumsy.

The 1943 legislature of South Dakota illogically removed accounting ^york from the Department of Finance, and lodged it in the office of the comptroller, the;out­side auditor for the legislature. The net result is that the latter official is called on to audit his own accounts.

Much has deservedly been written about the Minnesota progress pursuant to the re­organization legislation of 1939. The state auditor, however, currently reports numer­ous budget and accounting problems which it is necessary to solve if the istate is to achieve altogether orderly fiscal adminis­tration. For examjDle, he says: "While most state departments and agencies may collect the moneys of the departments supervised, some cannot; while most de­posit all collections in the State Treasury, some do not; from moneys once collected and in the Treasury some may make re­funds, others cannot; and while most de-

8 James .S. Reiley/'Safeguarding Public Ftmds," Proceedings, First Annual Conference, Department of Revenue, pp, 21 ff. ;

partments and a^ncies, depositing money in the State Treasury make paymentis by state warrant, the others do not.*'^

An important means of control through the state budget is administrative and public reporting. Appraisal of administra­tive reporting practice would depend on a personal field investigation which has noc been made for the purposes of this essay. From available administrative forms, it appears that current progress in some states is roughly offset by losses in others. Respecting published reports, which make for popular interest in budgetary matters, the situation is more favorable. Several states have recently begun the practice of publishing attractive ahd understandable explanations of state finances. Among these are: Alabama, where the depart­ments of finance and revenue issued a readable joint report; California, where the general level of reporting has long been better than average; Kentiicky. where the Department of Reyenue has done some outstanding, if somewhat slow, reporting; Maine, vi here recent special study reports have been unusually attract tive for mimeographed documents; Mary­land, wherfe the budget document is in especially good forna; arid Virginia, where the 1942 report of the comptroller reached a new high in general appearance. Even the paper shortage has helped toward better reports to the extent that it has. discouraged hundreds of pages of confus­ing figures. Doubtless, the outstanding achievement in this field, especially since 1941, has been the fine work of the Bureau of the Census (Division of Governments) under the leadership of Dr. E. R. Gray.

Although state purchasing is technically no part of budget administratfon, they are intimately related both in the sense that they must be closely articulated and in the sense that good purchasing is an auxiliary means toward economical financial con­trol. Those states which have set up strong departments of finance have usually pro­vided that budget, accounting, and pur­chasing operations be placed under one management. Moreover, they have gener­ally required a'pre-audit and an encum­brance of allotted appropriations before

^Biennial Report, 1944, p. (5.

216 THE BOOK OF THE STATES

consummation rof a. purchase contract. By such an arrangement, any buying error or any mistake on the part of a-spending agency is likely to be apparent before the damage becomes irreparable.

Aside from, the states }n which compre­hensive reorganizations have occurred, ad­vances in purchasing practice have hot been numerous during the war period. Alabama, Kentucky, and South Caroliiaa are among the states which provide for insurance of all or part of the public's prop­erty through a state plan rather than through purchasing private insurance. Ala­bama reports a currerrt-year saving on its. insurance of about $237,000. Alabama has also saved over $600,000 through a tire-service contract in behalf of the common­wealth and local boards of'education: Kan­sas, Minnesota, Nebraska, New Hamp­shire, New Jersey, and Michigan have definitely progressed\toward centralized purchasing. Under recent legislation. New Hampshire has issued corriprehehsive regu­lations which more nearly guarantee com­petitive bidding and generally economical. buying. The 1944 New Jersey fiscal code specified an elaborate procedure to protect the, integrity of centralized purchasing in that state. The Michigan legislation dates from 1939, but the wai- period has wit­nessed completion of the installation, which should yield heavy dividends after the war^^ There appears to have been definite advance in purchasins under the war administration in Tennessee. However, observers who commend the more orderly procedures de­plore the unannounced abandonment of the use of standardized specifications.

Orie of the most difficult state purchasing problems has involved conformity with federal priorities and rationing arrange­ments. Both programs have made it neces­sary for state buying aigencies to observe, federal regulations even though they were already required to obey state legal re­quirements—often more or less inconsistent.

Public debt management ties, in more closely with the long-term capital budget than with the current budget, although it affects the latter. For example, whatever the state spends for debt service cannot be devoted to current''expenses or to new capital. On the whole, state debt admini­stration during the war years presents a

pleasant contrast with performance in the preceding twenty years. This is explained largely by the fact that states have deliber­ately continued the comparatively sound , policies forced on them during the depres­sion period of the 1930's. These policies have been complemented by the emphasis on debt retirement from budgetary sur­pluses, to which reference has already been' made.

As far as can be ascertained, all the states which during the 1930's employed warrants or other forms of current obligations for long-term borrowing have retired o^^fuhded . the loans. For example, the Kentucky waii 'f' rant debt was finally retired in March, ^ 1942: That state's legislature then repealed the statute which authorized interest-bear­ing warrants. To the same end, Louisiania in 1944 restricted the current borrowing authority of its Board of Liquidation. The new Missouri constitution will modernize its still severfe restrictions on current bor­rowing. In states such as Arkansas and

, Tennessee, in which debt policy had pre-•i'iously been allegedly dishonest,^° public officials have so managed affairs that the states have made considerable progress toward payment of outstanding obliga­tions. Moreover, current administration appears to be concerned with meeting pay­ments promptly and with protecting the credit of the state." In certain s t a t e s -Colorado, for instance—debt management is still hampered'by, unfortunate legisla­tion. No apparent evidence indicates exist­ing irregularities in state-debt management anywhere in the country such as were quite usual in the decades of the 1920's and the 1930's.

AUDITING

Students of government finance have long agreed that the legislature of any state should have the benefit of an independent audit of all accounts which administrators maintain. Such independence, it is gener­ally believed, should be assured both by the means of choosing the auditor and by the exclusive assignment of examiner func-

" B . U. Ratchford, American State Debts, 1941, Chapters 15 and 16.

11 As to Tennessee, for .example, compare the Tennessee Taxpayers Association, 7«;ir//'/A ^nnwa/ Report, p. 17, with Ratchford, op. cit., p. 412.

.; ^

•]"-:. FINANCE ADMINISTRATION 217

tions.i2 For instance, if an auditor is ap- ^ Although the Missouri and Texas devel-pointed by the governor of a state, he can opments appear to be the major ones - v-scarcely be sz.id..Xoh^ independent of the during the war period in the field of state administration, the performance of which auditing,^* there have been several minor heischarged with checking. If he is elected ' occurrences, examples of which should IDC on the'same ticket, the dependence is re-. mentioned. Alabama has greatly improved duced, but not as a practical mat ter com- its supervision of individual audits, and the pletely eliminated. Again, if an auditor is quality of examiners' performance has charged with keeping the accounts of the gone up accordingly. In California, where state or pre-auditing expenditures or per- the Department of Finance has been and -forming other functions incident to cur- still is responsible for post^udits, the legis-rently managing state finances, then he lature recently provided for a legislative can scarcely be said to be independent of auditor who apparently has broad author-the administration. For example, the ity to look into and-^report on general Minnesota House of Representatives In- administrative, as well as purely fiscal, terim Committee on State Adihinistration matters. The Colorado auditor has been .' and Empioyment,^^ in recommending that handicapped by the inadequacy of wartime the audit of railroads incident to enforcing appropriations for the support of his work. . the gross earnings tax be made a responsi- Kentucky, after personnel losses to the bility of the Department of Taxation, armed forces, has failed to designate as pointed out that the public examiner, assistant state auditor a certified public ac-whom the law now charges with the work, countant, as provided by statute. In Louisi-ought not be charged with a post-audit of ana, the 1944 legislature increased the the work of his own office. . appropriations for audit work by 90 per

One ofthe most fundamental war-period cent.^^. There were increases in support in developments in auditing has been the several other states, but largely only for the recentchangeof Texas practice. For along purpose of meeting increased operating ex-while, the Lone Star State has enjoyed the penses. Michigan reports gradual, but per- . services of a icertified public accountant as ceptible, improvements in auditefficiehcy.^^ state auditor, but he has been appointed V, T - \ \ b>r the governor. The 1.943 legislalbn pro- ' POLICY IMPLICATIONS \ ; V vides that he shall-b^ chesen by the staters On the whole, financial administration \ •'} legislature through a joint legislative com- . changes during the war period have been / inittee. The committee's choice is subject encouraging. There is a definite, definable to Senate approvaK The act gives the audi- trend in both legislation and administration tor sufficient authority to facilitate effective toward increasingly effective tax admini-examinations. | stration. Especially apparent has been the

I t is of particular interest that the new tendency to consolidate tax administration Missouri constitution, approved by refer- under one agency. There has also been endum on Febru^ry"^27, 1945, does not some evidence of renewed emphasis on the separate audit from financial administra- close integration of some of the cqnsoli-tion. Rather, it authorizes the state auditor dated agencies. The Colorado, Louisiana, to approve vouchqrs before payment, that and Michigan changes have been exam-is, to conduct pre-'audits, and also to pre- pies; and sentiment in Alabama, Connecti-scribe accounts, als well as to conduct ex- cut, Illinois, Maine, Missouri, and other aminatibns after the close of each fiscal ——^— period. Despite th^ fact that the Missouri "No attention is givien to state auditors' re­arrangement falls short of providing for the sponsibility for local audits. However, it may be independence of the state auditor, it is an reni^rked parenthetically that the war period has

^ •• ^ • 1'...v ^ • . witnessed comparatively few changes, improvement over hitherto existing prac- i6 The governor had recommended a 114 per tice, as the state auditor has been one of the c&nthoosi, Executive Budget,J944-1946, p. 111. principal tax administrators of the state. "Perhaps it should, be added'that a vigorous —'•— I campaign in Tennessee seeks to assure that the

^ James W. Martin, Robert L. Sawyer, and S. state examiner assume local aiidit i-esponsibility MaxieFraser, The S(ale Auditor, 1942, chapter.!. authorized in 1937, but not regularly performed ^'. Report to the 7945 Minnesota Legislature, p. 7. in practice during th'e intervening years.

•li^ '^-^^l::-

r:\r-

218 THE BOOK. OF THE STATES.

states has reportedly pointed in the same direction. The assignment of tax admini­stration to a general finance department, as provided by the new Missouri constitu-

, tion and as effected by the 1944 New Jersey legislation; may be ap emerging trend; but the Illinois reorganization represented in part a countermovement. The personnel situation in many state tax departments, on the other, hand, has become little short of desperate, in view 6f corripetitive mili­tary and war-plant requirements. Especi­ally disrupting is depletion of managerial and auditing manpower. Whether the ground lo§t in this manner can be recov­ered after the war depends on a number of factors,^ among which the political leader­ship, the treatment of veterans, and the educational lag bulk large. Against the manpower loss, which has been especially severe in many states' tax departments, it is appropriate to refer to merit personnel gains over spoils practices in recent years.^^

In handling state fiscal administration, many states attach their budget agency directly to the office of the governor. A considerable but smaller, number, empha­sizing the. integration of fiscal functions, accords this task to the management of a department of firiancCj which usually ad­ministers accounting, purchasing, public properties and, in some states, other func­tions. Various miscellaneous arrangements exist in the remaining states. .Even during the war period, several states have made marked progress in the improvement of

' fiscal planning; most of the newly organ­ized or elaborated budgpt agencies follow one or the other of the principal organiza­tion patterns and thereby emphasize the executive character of the budget.

Recent stress on eflfeetively.implement­ing sound financial policies, on mainten­ance and improvement of technical person­nel resources, on preparation of meaningful budget reportSj oh aid toward effective and Wise executive and legislative use of the

" Cf. James "W. Mairtin, "EfiRciency of Person­nel in Tax Administration," Taxes—The Tax Magazine, Feb., 1944, pp. 50 ff.

docurnerits, and on the gradual develop­ment of positive assistance to spending ageri(pies designed to help them secure the greatest product possible for each dollar

.spent should place state budget agencies in a position to perform increasingly effec­tive public service. The one weak point that seems to pervade state finance man­agement practice is the lack of budget comprehensiveness.. Many states do not budget half of their finances. Minnesota has shown that even earmarked revenues can be subjected to a limited measure of

•control; but as long as legislatures abdicate a part of their current appropriating au-tl)ority throTjgh prior dedication of specified revenues to particular purposes, the con­trol possible will be restricted! Aside from motor vehicle and gasoline tax revenues^ the outlook on this score is more favorable than formerly for constructive budgeting.

Recent progress toward efficient ac­counting, reporting, arid debt administra­tion is also a good omen for the future of state financial administration. Especially is this true of records and reports, without iwhich budgeting is impracticable. If state purchasing has enjoyed few recent exten­sive improvements, at least there have been no far-reaching evidences of ground lost. Moreover, scattered advances are probably significant.

Fundamental to sound fiscal admiriistra-tiori, and especially to a statesrrianlike budget plan, is an outside or independent audit of financial records. Siich an audit can be secured if the legislatures employ Unbiased certified public accountants well trained and experienced in govern­mental auditing. It is relatively unimpor­tant whether the auditor be given official statiis with a regular appointitient or be merely a practicing accountant with ap­propriate aides. Even during the war, some progress has been made tbward provision of such an outside audit in California and Texas arid less obviously in several other states. Emphasis on the independent state audit should increase as skilled accounting personnel becomes more available.

/ • '

•i:

*?6

FINANCE ADMINISTRATION

BUDGETARY PRACTICES

219

State Dale Estimates

Submitted Budget Prepared by Date SubmiUed la Legislature

Power of Legislature to

Change Bidget

Fiscal. Year

Begins:

Alabama. Arizona.., Arkansas.

February 1 September 1 Beifore session •

Bud.Off.of Dept.of Rev. Governor Budget Comm. of Leg,

California....

Colorado..... Connecticut.. Delaware Florida ,

Georftla*..... Idaho Illinois Indiana.. . . . .

October 1 or before Dir. of Finance

October 1 October 1 September 15 December 15

No date set September 15 November 1 August 15

Bud. &• Effic Commr. Bd. of Fin. 6- Control Budget Comm. . State Budget Comm.

Budget Bureau Budget Director Director of Finance State Budget Comm.

"»>wa. October 1 K-vnsas. Octoberl Ket t u c k y . . . . . . . November 15

Xomsiana . . . . . . January 15 of even years

Maiie October 1 Maryland. .As Gov. desires Masiachuset ts . . September 15 Mlddfian December 1 Minnesota ' No date set Mississippi No date«et MIs(Ourl. November 1

MoEtjEina.. . . . . . November 15 .'

Nebi raska . . . . . . . September 15

Nevada December !•

New Hampshire. October 1 of even years

New Jersey October 1. New Mexlcol . . . . December 15 New Y o r k . . . . . . . October 15 North Carolina.. September 1 North Dakota. . . Octoberl O h i o . . . . . . . . . . . . November 1 Oklahoma.. November 1 Oregon.; October 1 Pennsylvania.... November 1

Rhode Island.... December 1

South Carolina.. November 1 South Dakota... October 15 Tennessee . . . . . . December 1

Texas. 77 Oct. 15 precedg. yr. Utah.; No date set

- V e r m o n t . . . . . . . . Octoberl Virginia... \ September 15

Washington..... 1st Mon. of Sept. WestVh^lnia... July 1 Wiscons in . . . . . . November 1 Wyoming November 1

Second Tuesday in June By Sth day reg. session 30 days after appt. of

coinm. January .;

iOth day of session Before February 1 5th day of session^ 1st day of session

7th day of session 10th day of session 4 weeks after conv. With governor's budget

message

Comptroller Govemorb Commr. of Finance Division of Budget of

Dept. of Finance

State Budget Officer Budget Director

Budget Commr. Budget Director

Cocimn of Admir Asst. Dir. of Bud

Comm. Budget Director State Bd. of Examhrs.

, ••-]

Commr. of Tax. 6* Bud.

Governor

Comptroller and , Governor

Com. of Tax. & Fin. Governor Director of Budget

Budget Director Budget Bpard

Supt. of Budget Budget Officer Budget Director Budget Secretary

Budget Director

State Budget Comm. Secy..of Finance Dept. of Budget

State Bd. of Control Director of Budget Governor Director of Budget

Director of Budget Board of Public Works

Director of Budget Governor .

J d g i ^

15tb day of session On or before Feb. 1

With gov's; bud. mess. 10th day of session

2 weeks after conv. 5th day of session December 20 No time specified

Unlimited Uiilimited ynlimited

Unlimited:

Unlimited Unlimited Unlimited Unlimited

Unlimited' Unlimited Unlimited Unlimited

February 15 . .,> 2nd Tuesday in Jan. 3rd Monday of session Not later than 20th day of

session

2nd week after conv. 20th day of session; 30th

for new governor Within 3 weeks after conv. 10th day of session

Defcember 1 December 1 ;

30 daysafter conv. 10th day of session

On or before 15th day of session

20th day of session

February IS

3rd Tuesday of Jan.'

Unlimited Unlimited Unlimited Unlimited

Unlimited May strike out or

reduce? Unlimited Unlimited Unlimited Unlimited

Unlimited Unlimited

Unlimited''

May strike out or reduce"

, Unlimited .

Unlimited

Unlimited May strike out or

reduce* . Unlimited Unlimited Unlimited Unlimited Unlimited • Unlimited

On or before 24th legislative Unlimited day

5th day of session Unlimited Sth day of session .Unlimited January 14« Unlimited

January 1 • 20th day of session 2nd week of session Sth day of session

Sth day of session By 10th day of session

February 1 By Sth day of session

Unlimited Unlimited Unlimited Unlimited

_Oct.-4-July 1 July 1

July 1

July 1 July i July 1 July 1

July 1 -Jiiiy 1 July 1 July .1

July .1 July 1 July 1 July 1

July .1 July I July 1 July 1 July 1 July 1 July 1

July 1

July 1

July 1

July;l July 1

July 1 April 1 July 1 July 1 Jan. 1 July 1 July 1 June 1

July 1

July 1 July 1 July 1

Sept. 1 July 1. July t July 1

Unlimited April 1 May strike out or July 1

reduce' Unlimited July 1 Unlimited April 1

Finance Commission created as counter-control and check (Georgia Acts, 1943, p. 298). The sovemor is responsible by law for the preparation of the budget; however, the actual preparation oi the document ts done by the budget director. Appropriations outside budget bill shall be limited to some single work or purpose. Legislature may make unlimited changes, but must have H vote to do so.

.May add items of appropriation provided such additions are stated separately from original items and refer each to single object or purjpoie. In inauguration year, governor has extra month. . In inauguration year, governor may submit budget any time prior to March 1. I Within five days after organization of both Houses. May increase items for judldary or legislature only.

y:

> •

SOME CONSIDERATIONS RESPECTING FEDERAL, STATE, AND LOCAL FISCAL RELATIONS*

• Q

\

f^

DEMOCRATIC government, which is espe­cially concerned with retaining the

cherished freedoms of the people,, requires the largest possible measure of local self-government that does not sacrifice too much of the advantages of wider coopera­tion with others. This is so because the people can understand best local govern­mental needs and how to meet them; they can know best their local. representatives and administrators. They can evaluate the competence and dependability of their officials. Moreover, if they themselves vote and pay the taxes to support the expendi­tures they authorize, there is m,uch less likelihood of extravagance in appropria­tions and in their application; thereS^s much more inducement to choose wise'!*** policies, good representatives, and com­petent and dependable administrators in every phase of government. / T h e feelings of altruism are perhaps

generally stropgest among members of a small group like a family; cooperation and the smoothing of differences is.gen­erally easier in a small intimate neighbor­hood than in a large prie, or than between the members of distant and strange neigh­borhoods or communities. Normally the moral standards followed in the public re-la:tions among distant peoples of different raceSj religions, and ideas J^ecpme weaker as distances and differences increase.

But not all government can be confined to small local areas; there are many ad­vantages of cooperation on a wider scale with large areas and populations. In 1776, thirteen small isolated American colonics on the Atlantic seaboard fouhd it neces­sary to confederate to [gain their inde­pendence and secure democi-atic govern­ment^ in 1789, they formed a stronger federal union, the better to maintain and assure their liberties. Recent events have shovyTi that no small country can main­tain its independence in the modern world

*Pirepared by Roy G. Blakey, School of Busi­ness Administratibb, University of Minnesota.

except with the aid or sufferance of a powerful nation or a combination of na­tions. No small modern.nStibn can pros­per or even survive economicaHy without somewhat similar cooperation, including intergovernmental cooperation to protect its economic and political independence— which is really interdependence.

Federation is an outstanding device to combine, the maximum of individual liberties associated with local self-govern­ment consistent with the maximum of ad­vantages of cooperation with other groups. Such advantages include those necessary for economic welfare, national defense, and the security of local and all other kinds of self-government. But these feder­ated organizations—these^overnments co­operating over more eixtetisiyie areas with larger populations having diverse interests and ideas—are not cohesive enough to prevent disintegration unless they can de­velop stronger ties of mutual interest, sympathy, and tolerance than usually exist among strange and-distant peoples.

TECHNOLOGICAL AND ECONOMIC REVOLXJTIONS NECESSFTATE ADJUST­

MENTS IN FISCAL POLICIES

Among the most important develop­ments of modern tiines have been those of technology and economics. More advances have been made with machinery and the economic applications of science during the past two centuries than in the pre­ceding two thousand years. In fact, the American economy and much of the world economy has been revolutionized in the last century by the technological develop­ments and changes in economic processes and organization. «

A popular magazine presented two pic­tures of Mr. Henry Ford cutting wheat on his Michigan farm last summer. In one he was wielding a hand sickle and in the qther he was driving an old,reaper. Both implements he had used in his boyhood days. Today in the great wheat areas the

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grain is cut and threshed at one. operation with combines, each of'which harvests thousands of aqres in a season and makes abundant wheat available at one-fifth the cost that the old hand methods would involve.

The vast development of power-driven machinery has been one of the most im­portant causes of the great increases in wealth and income which we have had during the past decades. It is the nature of power-machine .mass production that it requires much specialization, which in turn requires large markets and more or less continuous and regular exchange to maximize production and provide lowest costs and highest standards of living. It has also been a chief cause of the trans­formation of our early local agricultural communities and markets into segments of a highly integrated and interdependent->vorldwide economy with national and international; markets and with equally iextensive tax'^and other problems. i '' It is a matter of more tlian passing in- J

terest that the National Tax Association .| was founded in 1907 primarily to improve or prevent the breakdown of the general property tax which was lagging, behind economic and mechanical developments. This tax had long been the mainstay of state and local governments and it had worked passably well in the pioneer agri-Qultural era of our nation's "tiistory. In the early days of local business, small govern­ment expenditures, and low taxes, poor property assessments were not very seri­ous; intangibles were relatively insignifi­cant and so were most corporations and the tax problems connected with them. The apportionment of railroad and public utility values did not become very trouble­some untitlate in the nineteenth century, and the allocation of taxable income and similar modern tax problems had not. yet raised much difficulty. Indeed, taxes were generally light and there were few serious interstate or federal-state tax conflicts.

But even before 1907, the situation had changed and something had to be done. The National Tax.Association's first con­stitution authorized i t to study state and local taxation, but not national taxation. This meant devoting its attention. chiefly to the administration of the property tax.

But economic and social forces, which we have discussed more fully elsewhef'^i^eon brought about the adoption of income and other taxes by both state and national, government^ hence, in 1913, the Associa­tion's constitution was amended to include the discussion of national taxes. In 1930, the new by-laws authorized more attention to federafl, state, and local relations.

The upheavals of World War I and the failure to make an adequate peace settle­ment led to the great depression of the 1930's and also to World War ,11. The former accelerated and magnified the tax, jurisdictional, and other conflicts which had long been paralleling the underlying economic developments. Prominent among the difficulties of governrhents were lack of funds and a consequent competitive scramble on the part of all units of every level and area for every available tax source. This, of course, promoted further conflicts over the division of governmental functions and the spending of public funds. World War II is still piling vhuge debts and taxes on top of what were al­ready unprecedented aggregates.

The National Tax Association is only one of existing American organizations that have been fighting the battle of tax revision, working for adjustments to keep our fiscal policies in line with basic devel-opntents. Important among the many others are the Council of State Govejn-ments (including its predecessors and col- laborators, the American Legislators' Asso­ciation and the Interstate Commission on Conflicting Taxation), the Federation of Tax Administrators, thC; Municipal Fi- ' nance Officers Association, the National Association of Assessing Officers, the Tax Institute, ,the National Planning Associa­tion, the Brookings Institution, the Com­mittee for Economic Development, the Twin City Group, the Citizens National Committee, the National Industrial Con­ference Board, and state, local, and other similar associations. Many of these hold regular and special meetings and con­ferences, get out reports and recommenda­tions. Some of them are active in contact­ing federal, state, and local legislatprs and administrators, as well as In educating and

In The Federal Income Ta^ (1940) and varioua other publications; . /

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directing public and especially official Opinion.

It would be too large an undertaking to discuss here important recommendations of these organizations respecting inter­governmental fiscal relations, or even to summarize nlost of the recommendations which the present writer has published

• elsewhere.^ It may.be well, however, to list a few examples of the criticisms of existing conditions and perhaps comment briefly on a few of the partial solutions or remedies that have been or are being tried.

CRITICISMS OF EXISTING INTERGOVERN­MENTAL FISCAL RELATIONS

Following are some of the criticisms of existing conditions and relations. i •-

(1) Government, especially the national government, is undertaking to do too many things,, some that should be left to private

'Following are a few of the most helpful sources of information relative to intergpvernmental fiscal relations: Council, of State Governments, War­time and Post-war Problems and Policies of the States; American Legislators' Association and Council of State Governments' Interstate Commission on^on^.

, flicting Taxation, 1935 Progress^eport-of^'Kcport of Professors Groves, GuJ[tck,""and Newcomer to the" Secretary pf-theTTreasury on Federal, State, and Local: Government Fiscal Relations (Senate Doc. 69, 78th Cong.; 1st Sess., 1943); Proceedings of the Annual Conferences of the National Tax Associa­tion (37 vols.); A. H. Hansen and Hcirvey S. Perlofir, State and Local Finance in the National Economy; Jane P. Clark, Rise of the New Federalism: Federal-Stale Cooperation in the United States; Ruth G- Hutchinson, State Administered, Locally-Shared Taxes; V. O. Key, Administration of FeUeral Grants to States; B. P. Adarkar, Principles and'Problems of Federal Finance; C. O. Hardy, Tax Exempt Securities and the Surtax; Mabel Newcomer, Separation of State and Local Revenues in the United States; U. S. Dept. of Justice, Taxation of Government Bondholders and Employees; New York State Tax Commissionj -

. Fiscal Aspects of State and Local Relationships in New York (Special Report No. 13, 1937); U.S. Con­gress, Joint Committee on Internal Revenue Taxation, Power of Congress to Tax Interest from State and Local Employees (1939); J. K. Williams, . Grants-in-Aid under the PWA (1939); Leo Wood-worth Day, Shared Taxes.

Some of the present writer's publications con­taining discussions of various phases of the matter under discussion are: "Postwar^iscal Pol icies-State and Local," TcLxes—the Tax Magazine, Feb­ruary, 1944; "State and Local Taxation of Federal Property," University of Tennessee Record, Jan­uary, 1945, and the Bulletin of the National Tax Association,'january, 1945; Taxation in Minnesota; Report on Taxation in } ^est Virginia; National Tax Association, Diigest ana Index; State Income Taxes; Sales Taxes, and Other Excises.

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enterprise or to state and/or local govern­ments. In other words, there ought to be less government and many of the func­tions that government shoiild perform could be performed more economically and/or more satisfactorily, by other units or areas of government than those now administering them. '

(2) (Conversely many private, local,-and state governmental services would be per­formed more satisfactorily by the larger, richer, more powerful, or more efficient governmental units.

(3) The different taxes and sources of revenue are not distributed among, or allocated to, the different areas or units of government in proportion to/their respec­tive needs, for example, in proportioit to the costs of the various services which the several units of government are supposed or required to. provide. >

(4) The systems of sharing or allocating taxes, especially those applied by more than one tax jurisdiction to persons, prop­erty, or businesses, have very serious faults arid result in unduly heayy and dis­criminatory taxation in many cases.

(5) Methods of sharing taxes, grants-in-aid, etcl, frequently result in giving least aiid to those in greatest need, and vice versa. Frequently they aggravate and per­petuate uneconomic, inefficient institu-k. tions or organizations aiid otherwise cause extravagant. and wasteful expenditures. They are also sometimes used for petty and sometimes for very flagrant political bribery and corruption.' Witness the WPA and the PWA of the 1930's; many smaller examples could be cited.

(6) The federal government robs the states and local units of their ^rightful revenues by encroaching upon th,eir tra­ditional sources of revenue and by-knaking: such heavy tax levies and expenditures that there is not enough left for the state and local units.

(7) The states treat their local units of government similarly; iri fact, the officials of most governments fail;to take sufficient consideration of the needs of other govern^ ments^ •

(8) Most government units and areas do not correlate theiiv, taxing, borrowing, or spending with that of other governmental

.units or with "the swings of the business

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cycle, employment, etc.; consequently they aggravate depressions and unemployment .which they might lessen if coordinated compensatory policies were followed.

(9) There are many tax duplications and overlappings by various government

"units, relatively little coordination in-the administration of taxes; by the various units, unnecessary inconvenience and costs of compliance imposed upon taxpayers, as well as upon government officials and the public treasuries.

(10)/As a result of the above and other evils,, there is little coordination of tHe fiscal'system viewed as a whole; in fact, there is lack of responsibility, chaos, in­efficiency, and extravagance resulting in a great waste of taxpayers' money. The pur­pose of government is to help men meet their needs; to the extent " that it wastes funds unnecessarily, it fails to meet its real purposes. Some estimates of the un­necessary wastefulness of American gov-

.' ernment run as high as billions of dollars • per year.

The above list of criticisms of the situa­tion in the United States is illustrative, not exhaustive. Many of• them are valid in whole or in paiJt, though different persons will give different weights to most of them because they have diflferent ex-

. periences, interests, prejudices, and phi­losophies. Even the warrriest friends of government, including those, who favor the extension, of government activity, would admit that the proper coordination of government functions and finances, and the selection and retention of all govern­ment officials on a strictly merit basis, would save billions of dollars and result in' more adequate and more satisfactory services. . _:..,,.

WHY FAULTS HAVE NOT.'BEEN GORRECTED

Why then have the existing faults not been corrected? There is no one single answer. Gross and partial ignorance^'on the part of many respecting the inter-re­lations of technological, economic, govern­mental, and other social reactions are important. Inertias—unwillingness to dis­turb vested political, economic, and other interests—are most important. Most gov­ernmental economies involve changes in

personnel and services; they frequently mtan changes in duties, pay, and privi­leges of officials and others and, in nearly all cases, they have" significant political and/or economic implications. Life is short and uncertain and changes that promise important ultimate generaj benefits fre-. quently do not. mean much to those who can block them to secure or retain more certain special immediate benefits for themselves. •

It is true that many desirable changes or adaptations have already been made, •, but many that should have been made are still blocked or impeded by tradition and the protection of special interests imbedded. in obsolete and rigid constitutions and statutes; or, worse, still, imbedded in the minds of too . many unthinking, wrong-thinking, unsocial, or selfish people.

REQUIREMENTS FOR ADEQU.'\TE ADJUSTMENTS

Despite the epochal technological changes of our times which have accentu­ated the trend toward a complex interdepen-. dent world economy, many of our govern­mental organizations, practices, and ideas are still based largely upon governments of the ^ncient and largely.outmoded small township. A century ago, it took men from the four corners of a large township or county about as long to get together, and much longer to communicate with one another, than it now takes men from the fojjr corners of the earth. But markets will: not e.xpand freely and credits cannot be. safely extended over expanded territories and populations unless the areas of govern­ment control and operation and the stan-. dards of business and international ethics are aKo expanded to correspond. Ifjhey are to make the most of _their' oppor­tunities and resources, peoples more dis­tant in milesT>ut less distant in time and-^ much .more interdependent economically and politically than formerly must be­come better neighbors both in their thinking and in their actions. There must be a realization of the much more exten­sive and intensive interdependence--of the mutuality of the welfare of all.

Present-day taxpayers in.New York and New England.should recognize better than ever the interests thev share with the

224 THE BOOK OF THE STATES

peoples of Arkansas and Montana; tax spenders in the latter states should have a livelier^ appreciation of their interests in the welfare of New Yorkers and New Englanders, and feel less inclined ' to use extravagantly the aids provided by the people of the eastern states via the federal Treasury. Peoples of all states and countries should realize that foreign loans, "lend-lease," and even outright gifts may, under piroper conditions, be profitable to both providers and receivers if good judg­ment, a high degree of integrity, mutual respect, and effective cooperation become well established and can be depended upon to prevail generally.

Similarly, the fiscal, interrelations be­tween all units and areas of government-^ federal-state, interstate, state-local, and international—air demand higher, more emoracing, and,more enlightened stand­ards of performance, arid these, in turn, requYre better realization of the advantages of economic and political cooperation on a wider scale, with sufficiently high politi-

,cal moWl standards" to assure dependable fair dealing in all relations, including the allocation of functions and finances when arid wher^ these are matters,at issue.

LARGE-SCALE DEXMOCRACY STILL IN

EXPERIMENTAL ST.^GE

DerriocracyVlocal self-government, and the various freedoms associated with it' may survive and. thrive for a few generar tions in small New England towns, or in a city-state like ancient''Athens, but it has not yet been prove\^ that itWill prosper in perpetuity in a fkr-flung federation of forty-eight states with 140 million people— to say nothing of a worldwide federation— as so rriany Americaris naively assume. It is fully as true today as in the time of Jefferson, that eternal vigilance is ; the price of liberty—it is also the,price of tax and fiscal policies that suit Hberty-loving people.

Confederation and federation are two related devices (already mentioned) to help democracy to work in larger and larger areas and among larger popula­tions. But at their best they do not seem able to prevent some weakening of the freedoms and the efficiencies of democ­racies th^t are quite effective in smaller

units. The larger derhocracies are espe­cially in need of organizations and de­vices that will minimize such weaknesses. When the Fathers drafted the Constitu­tion, they argued that senators and repre­sentatives in the national Congress would have due regard for the interests of their respective states as well as for those of thie naition. Sometimes they seem tp have more thian due interest; at other times, when consideririg tax and other fiscal matters, they seem to forget either the national interest or the welfare of the states, if not both.

NEED FOR SPECIAL, IMPLEMENTATION

If federal-state; interstate, and state-locar fiscal coordination in the United States is to get very far in the present or near future, it will probably have to be implemented by some federal-state liaison coriimittee or other agency, such as the Council of State Governments has been endeavoring to provide. Federal and state legislators and administrators in these days are generally too engrossed in their own imriiediate tasks to take sufficient consideration of the related problems of other units or areas of government; hence it is desirable to have an able special com­mittee or body—reasonably small but supported ; by a representative advisory bpdy—which will devote its entire time to the problems of proper coordination in the large arid important field of fiscal policy. The Council of State Governments, and its predecessor, the Ammcan Legis­lators' Association, have already done notable work iri this and related fields. '. The Council has important extensive and intimate contacts and a unique record of achievement in federal-state jelations.^ It is closely associated with other organiza- , tions which collaborate in various vyays. It is in a position to secure riiucH, collab­oration also with still .other bodies. With , sufficient funds and an adequate, compe­tent specialized division of its staff" de­voting all of its time to taxation and fiscal policy, it could be expected to accomplish even much more.in the future. ,

'Sec the annual reports of the e.xecutive direc­tor in this and preceding volumes of The Book oj the Stales, and ako in the January, 1945, and cor-respondinEf earlier issues of Stale Government.