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Full text of "Sources of municipal revenues in Illinois"

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THE UNIVERSITY 



OF ILLINOIS 



LIBRARY 



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UNIVERSITY OF ILLINOIS LIBRARY AT URBANA CHAMPAIGN 



APR 2 1 978 
MAY 3 ' 



L161 O-1096 



UNIVERSITY OF ILLINOIS STUDIES 

IN THE 

SOCIAL SCIENCES 

VOL. 1. NO. 3 SEPTEMBER. 1912 



SOURCES OF 
Municipal Revenues in Illinois 



BY 

LENT DAYTON UPSON, Ph.D. 

Sometime Fellow in Political Science 
University of Illinois 



PRICE 75 CENTS 



URBANA-CHAMPAIGN, ILLINOIS 

PUBLISHED BY THE UNIVERSITY 
1912 



305 

xt 



COPYRIGHT 1912 
BY THE UNIVERSITY OF ILLINOIS 



TABLE OF CONTENTS 

Page 

INTRODUCTION 7 

CHAPTER I. 

PROPERTY TAXATION 1 1 

Tax Levies 12 

Exemption from Taxation 15 

Method of Assessment and Collection 16 

Property Taxes 17 

Personal Property Taxes 21 

Losses in Collection 24 

CHAPTER II. 

LICENSES AND POLICE FINES 26 

License revenue 26 

Liquor licenses 26 

General licenses 30 

Business taxes 41 

Vehicle licenses 43 

Foreign fire insurance tax 45 

Police fines 47 

CHAPTER III. 

GIFTS, GRANTS AND SUBVENTIONS 55 

School revenue 55 

State grants 55 

Endowment income 56 

Tuition 56 

Miscellaneous income 57 

Gifts by individuals 57 

CHAPTER IV. 

REVENUE FROM SERVICES RENDERED 58 

Departmental receipts 58 

Public service privileges 61 

Special assessments 68 

3 



CHAPTER V. 

Page 

MUNICIPAL INDUSTRIES AND PROPERTY 73 

Water plants 73 

Electric light plants 86 

Cemeteries 89 

Libraries . . 90 

City Hospitals 92 

Street railways . . 93 

Sewers 94 

Real estate 94 

Other city property 95 

Interest on city funds 96 

CHAPTER VI. 

LOANS 101 

Bonded Indebtedness 101 

Tax warrants 105 

Floating debt , 107 

CHAPTER VII. 
SUMMARY AND CONCLUSIONS no 

BIBLIOGRAPHY 120 

INDEX 121 

MAP SHOWING LOCATION OF CITIES . . 126 



TABLES 

Page 

1. Relation of Taxes to Total Income, Tax Rates and Per Capita 

Tax Income in 24 Illinois Cities in 1909 19 

2. Assessed Valuation by Classes of Property and Total Assessment 

in 24 Illinois Cities for the Year 1909 20 

3. Relation of the Assessments of Real and Personal Property to the 

Total Assessments in City and County, and the Relation of the 
City Personalty Assessment to that of City Lots, 1909 23 

4. City Receipts from Town Collectors and County Treasurers, 1909 24 

5. Number of Saloons, Population per Saloon, License Rates and 

other data relative to the Liquor Traffic in Illinois Cities, 1909.. 28 

6. Total and per capita Income from License Taxes, Illinois Cities, 

1909 34 

7. Principal Licenses and Rates 36-37 

8. Business Taxes, Rates and Total Income, 1909 42 

9. Vehicle Licenses, Rates and Total Income 44 

10. Total and Per capita Income from Foreign Fire Insurance Tax, 

1909 46 

11. Disposal of Arrests in 5 Illinois Cities, 1909 50 

12. Disposal of Arrests in Illinois Cities by Percentages 51 

13. Statistics on Strength of Police Forces, Number of Arrests, 

etc., 1909 53 

14. Revenues of Specified City School Districfs 56 

15. Receipts from Fees, Inspections, Departmental Receipts, Charges, 

and other Miscellaneous Sources, 1909 58 

16. Fee Offices and Methods of Reporting 60 

17. Rates and Income from Franchises, 1909 63 

18. Dates of Grant and Expiration of Franchises 65-66 

19. Statistics of Municipal Water Plants and Cost per Hydrant in 

Illinois Cities, 1909 79 

20. Statistics Relative to Cost of Operation per Million Gallons 

Pumped by Municipal Water Plants 80 

21. Ratio of Operating Costs to Receipts in Private Water Plants.. 83 

22. Ratio of Operating Costs to Receipts and "Total of all Costs" 

in Municipal Water Plants 83 

23. Statistics Relative to the Cost of Operation in Municipal Lighting 

Plants 86 

24. Charges by Private Electric Light Plants for Arc Service 88 

25. Income and Cost of Operation of Municipal Burial Grounds 90 

26. Statistics of Public Libraries, Illinois Cities, 1909 91 

5 



Page 

27. Receipts from City Real Estate 95 

28. Balances and Receipts for General Funds, Special Assessments 

and Special Funds, 1909 98 

29. Statistics Relative to Municipal Indebtedness, 1909 100 

30. Sources and Totals of General Revenues, 1909 117 

31. Sources of General Revenue, 1909, in Percentages 118 

32. Ranking of Twenty-four Illinois Cities, 1909 119 



INTRODUCTION. 

The purpose of this study is to examine the sources of 
municipal revenues in the state of Illinois, as typified by 
the budgets of a number of cities for the year 1909, noting 
the variations in the different municipalities and the means 
of revenue which are not fully utilized, so that all the 
financial revenues of any city may be made more available 
to the others. 

As cities become larger-lhe per capita cost of adminis- 
tration tends to increase. This does not necessarily mean 
that there is more waste or graft in the management of 
large cities than small ones ; but that as more people come 
together, they find it advantageous to do in common many 
things which formerly each individual undertook for him- 
self. In a village, each householder must occasionally be 
his own truant officer, his own sanitary inspector or his 
own sidewalk layer. In cities such duties are more effec- 
tively cared for by the public authorities. Kindergartens, 
medical and dental inspection of school children, charities, 
disease prevention, better sanitation, street and public 
lighting, parks, and other social welfare work make in- 
creased demands upon the local administration where 
many people are concentrated in a city. 

At the same time the maximum legal tax rate in Illi- 
nois is the same for all cities ; and growing municipalities 
find it necessary fcb seek for more sources of revenue other 
than property taxation. Such potential sources of revenue 
include liquor and business licenses, vehicle and insurance 
taxes, increased returns from police fines, fees and de- 
partmental receipts, and profits from municipal enter- 
prises. In some cases enlarged expenditures are tempor- 
arily met by increased municipal indebtedness. 

To secure data for this study, an examination was 
made of the budgets of twenty-four cities of over 8000 

7 



8 MUNICIPAL REVENUES IN ILLINOIS [368 

population, located in various parts of the state. Chicago 
has not been included, owing to the magnitude and special 
features involved in such a task, and also to the fact that 
a comprehensive study has already been made of its mu- 
nicipal revenues. 1 Questionnaires were sent to municipal 
officers; annual reports were received from nearly half of 
the cities ; and personal visits were made to all but two, 
Quincy and Joliet. 

No one of these methods of inquiry proved entirely 
satisfactory. It was difficult to secure replies even to 
direct questions. No printed report gave a complete state- 
ment for a single city. In the cities visited, the data had 
to be secured from a number of officials. Nevertheless, a 
complete statement was secured from all but three of the 
cities examined covering the revenues for general purposes j 
and the omissions in the three cases are small and unim- 
portant. 

The general plan followed in the arrangement of 
material is that employed by the Bureau of the Census 
for tabulating the statistics of cities, a general outline 
of which is shown in the table of contents. Since, how- 
ever, the cities included in this study are relatively small, 
with simple financial systems, it has not been possible to 
analyze the revenues with the same detail as the Census 
Bureau. 

The figures used as a basis of the investigation are 
those of actual city incomes for the fiscal year 1909, rather 
than the revenues which legally accrued during the year. 
For example, delinquent taxes for this year do not appear, 
though they are really an asset and will ultimately be 
collected. In their place, however, appear the delinquent 
taxes of previous years which were paid during the period 
under consideration. Outside the field of taxes, this cer- 
tainty of ultimate payment is not so great, a situation 
which illustrates the error of keeping city accounts upon a 
receipt and expenditure basis, rather than on a basis of 
legal accruals and liabilities. In one city only |700 of 

*C. E. Merriam: Report on the Municipal Revenues of Chicago. 



369] INTRODUCTION 



license fees was paid within the fiscal year. Either 
the $200 remaining will become an asset of the year fol- 
lowing and will offset the expenditures of a year to which 
it does not belong, or it may drop out of the ken of the 
city treasurer and fail to be collected. 

In addition to an analysis of the revenues received, 
an attempt is made to explain why some sources of revenue 
have not been utilized. In some cases, there has been local 
opposition to a particular form of taxation. In other in- 
stances, the cost of collection has been too large in pro- 
portion to the revenue received. In still other cases, a 
scientific and impartial collection of charges would result 
in increased revenue. 

Further, there is included in this study considerable 
data not directly involved in city budgets, but of value 
to officials seeking to increase municipal revenues and 
as illustrations of facts which must be brought to the 
knowledge of officials if municipal government is to be 
progressively and permanently bettered. The more im- 
portant data of this kind relates to the cost of operating 
municipal water and light plants, the time and date of 
expiration of public service franchises, the rates of license 
taxes, and the relation between the number of liquor 
licenses and the number of police. 

A summary of the conclusions of this study of the 
municipal revenue system of Illinois is to be found in the 
concluding chapter of the text; but it may be of interest 
to note here that: 

The maximum total tax rate (of one percent on the 
supposed full value of property) is inadequate to meet the 
needs of the modern city. 

The percent of total income received from other 
sources than property taxation ranges from_60% in Joliet 
to 3% in Urbana. 

Personal property estimated to equal real estate in 
value is paying only approximately one-third to one-fifth 
of its legal burden. 




10 MUNICIPAL REVENUES IN ILLINOIS [370 



Cities which give a limited number of saloons the mo- 
nopoly of the town's business, will lose from |5,000 to 
$10,000 a year unless they advance the license fee to a point 
where the cities will share in the monopoly profits. 

Business taxes can be made to contribute ten per cent 
of municipal income without serious opposition. 

The vehicle tax has proved a financial success in all of 
the cities in which it has been tried. In Evanston the re- 
turn is over f 8,000 a year. 

Departmental fees and charges could be made one of 
the more profitable sources of revenue but require more 
secure checks on the collection than exist at present. 

Taxes on the franchises of public service corporations 
are being imposed as rapidly as existing franchises expire, 
and produce from $1,000 to $5,000 annually. 

None of the cities investigated receive adequate inter- 
est upon public funds. 

The operation of public water plants in a number of 
cities has been efficient and economical, but the rates are 
too low to pay a profit, and frequently do not even meet the 
cost of operation. 

Street lighting could be done through municipal plants 
operated in connection with the water works at about one- 
half the price paid under private contract. 

There is urgent need that the state authorities create 
some municipal clearing house of facts which will cooper- 
ate with cities in installing a gradual revision of the sys- 
tem of keeping city accounts, uniform city reports, and 
methods of publicity which will keep both officials and 
taxpayers informed of advances in municipal adminis- 
tration. 



CHAPTER I 

PROPERTY TAXATION. 

Tbe Illinois constitution of 1870 authorizes the gen- 
eral assembly to vest municipalities with the power to 
assess and collect taxes for corporate purposes. 1 How- 
ever, this privilege is restricted by further constitutional 
provisions, which require that the levies be uniform in 
respect to persons and property; that privilege taxes be 
uniform as regards the class on which they operate; that 
the legislature must not impose taxes upon municipal cor- 
porations for corporate purposes; and place restrictions 
on the amount of municipal indebtedness. 

The general municipal incorporation act of 1872, the 
revenue clause of which was amended in 1897 to apply to 
all cities incorporated in any manner, 2 gives to munici- 
pal councils the following powers: 

a to control the finances and property of the corpor- 
ation 

b to appropriate money for corporate purposes only, 
and to provide for the payment of the debts and 
expenses of the corporation 

c to levy and collect taxes on real and personal prop- 
erty for general and special purposes 

d to fix the amount, terms and manner of issuing 
and revoking licenses; and 

e to borrow money on the credit of the corporation 
for corporate purposes 8 

The revenue clauses of the incorporation act also pre- 
scribe the method of assessment and collection of taxes; 
provide that all municipal expenditures shall be included 

'Constitution of 1870, Art. 9, par. 9. 

'Kurd's Revised Statutes (1908) ch. 24, par. 283. 

'Rev. Stat., ch. 24, par. 62. 

II 



12 MUNICIPAL REVENUES IN ILLINOIS [372 

in an annual appropriation measure passed by the city 
council, and that no further appropriation may be made 
from taxes except upon a majority vote of the electorate; 4 
that appropriations must precede tax lexies, as well as 
contracts entered into by the city; and that the tax levy 
ordinance must state both the rate or amount and the 
purpose of the tax. The appropriation ordinance and the 
tax levy ordinance are required to be distinct, and the 
former must be passed first. 5 The levy ordinance is filed 
with the county clerk who calculates the rate required to 
j aise the amounts ; and if it is necessary, he is required to 
scale the rate down to keep the aggregate of all tax levies 
within the legal limit of three per cent of the assessed 
valuation, allowing to each taxing district its legal pro- 
portion. 6 

TAX LEVIES 

Until 1909 the ordinary tax rate was limited to five 
per cent of one-fifth of the cash value of the taxable prop- 
erty. An amendment of that year raised the basis of 
assessment to one-third of the actual cash value, and made 
three per cent the legal tax limit. 7 This statute does not 
affect the real tax rate, but raises the debt limit sixty 
per cent. 



*Ibid, ch. 24, par. 89. 

B Peo. v. Florville, 207 III. 79. 

"The method of scaling as prescribed by the Juul law is as follows : a 
total is found of the rates necessary to give the certified sum ; the amount 
over three per cent is used as a numerator and the total percent as a 
denominator, each item being reduced in this proportion. Professor 
C. E. Merriam in his "Report on the Municipal Revenues of Chicago", 
(City Club of Chicago, Pub. No. 2, page 86) gives this example: "the 
West Town demands for tax levy (state, school building and special 
sanitary district excepted) aggregated in 1903, $7.55 per $100. These 
special rates were then scaled down 255-755, and the total thus reduced 
to five per cent." 

'Laws of 1909, p. 308. 



373] PROPERTY TAXATION 13 

The taxes which cities may levy unrestricted by refer- 
endum are these : 

For general purposes 1.2% 

Interest and sinking funds. . . ."a sum sufficient"' 

Educational purposes 1.5% 

School buildings 1.5% 

Public libraries .12% 

Parks 12% 

Cyclone tax .3% 

The taxes to provide interest and sinking funds are 
limited by the constitutional provision that the total debt 
shall not exceed five per cent of the assessed valuation. 
Taxes for such purposes, however, furnish a means for 
evading the statute limiting taxes for general purposes 
to 1.2% of the assessed valuation. Not infrequently, cities 
incur permanent indebtedness for current expenses, and 
retire the bonds out of other than taxes for general pur- 
poses. Nearly four per cent of the municipal debt is of 
this nature. 8 An interest and sinking fund tax may also 
be levied to pay such school debt as was contracted before 
the passage of the general school act of 1889. In cities of 
over 100,000 population the library tax is limited to .06% 
of the assessed valuation; and in all cities under 1,500 
population the library tax is included in the 1.2% tax 
for general purposes. 9 

The tax of .12% to provide for the establishment 
and maintenance of parks applies to cities having a popu- 
lation of less than 50,000, 10 a restriction which excludes 
only the cities of Chicago, Peoria, Springfield and East St. 
Louis. Within three of these municipalities park taxes 
are levied by the park districts, which are distinct taxing 
areas erected without particular reference to municipal 
boundaries. Such special taxing areas, which may also 
be created in smaller cities than those mentioned, are 

See ch. VI. 

'Rev. Stat. ch. 81, par. r. 

"Ibid. ch. 105, par. 290. 



14 MUNICIPAL REVENUES IN ILLINOIS [374 

of three kinds, sanitary, park and pleasure drive dis- 
tricts. They are formed by a favorable popular vote called 
after a petition to the county clerk, the voting being within 
the boundaries specified, for or against the proposition. 

The powers of the commissioners controlling these 
taxing districts have been changed frequently; and the 
confusion thus created has been added to by the Juul law 
of 1901 which consolidates and limits all of the tax levies 
within a city. The combined tax must not exceed the legal 
limit, which sometimes requires that the tax for one district 
shall be scaled down below the maximum in order that the 
aggregate tax for all purposes in another district fall 
within the legal limit. 

The taxation of property is the natural result of the 
theory that all persons should be taxed according to their 
ability; and ownership of property and particularly of 
real estate, in communities which have not reached a high 
industrial development, is considered the most concrete 
expression of ability to pay and of the measure of benefit 
received from governmental activities. The situs of real 
property is permanent, and it is therefore possible to tax 
such property when owned by non-residents, in the same 
manner as that of residents. 

Unoccupied tracts held for increment in value present 
a special problem. In some jurisdictions agricultural and 
unimproved property is exempted from taxation in whole 
or in part, and such exemptions have been sustained ex- 
cept in contravention of special constitutional provisions. 11 
In Illinois no such exemptions are allowed by law, but 
vacant property in the shape of lands is not an important 
item in the assessed valuations except in a few cities. In 
East St. Louis such property stands in the ratio of one to 
three when compared with the assessment of city lots; in 
several municipalities the ratio is one to ten, but in the 
majority it is less than this. The assessment for lands 
and lots is presented in table No. 2. 

^Connecticut, Indiana, Iowa, Maryland, Michigan, (with exceptions) 
Ohio, South Carolina and Tennessee. 



375] PROPERTY TAXATION 15 

The general rule for the taxation of personal prop- 
erty in Illinois provides for its assessment at the domicile 
of the owner; but some classes of tangible personalty are 
taxed in situs, and goods in transitu are assessed upon the 
owner at the place where the shipment originated. In- 
tangible property is also subject to taxation, but credits 
may be offset by certain debts; and while franchise values 
are taxable no method of local assessment is prescribed. 
Illinois corporations, except mercantile and manufactur- 
ing, are assessed by the state upon the value of their capital 
stock, less the assessed value of tangible property as made 
by the local assessors. Capital stock not assessed in this 
fashion by the state board of equalization should be listed 
as personal property. Aside from the tax upon the capital 
stock of railroads incorporated within the state, railroads, 
must pay taxes upon their personal and real property, 
assessed principally by the state board of equalization, 
the valuation being apportioned to the counties to a large 
extent in proportion to mileage. The value of side tracks 
and railroad buildings is returned wholly to the district 
within which they are located; and personal property other 
than rolling stock is locally assessed. 

EXEMPTIONS FROM TAXATION. 

Exemptions from taxation in Illinois are fewer than 
in most states. The constitution authorizes the exemp- 
tion by the legislature of real and personal property of 
states, counties and other municipal corporations, and 
such other property as may be used exclusively for agri- 
cultural and horticultural societies, schools, religious or- 
ganizations, cemeteries, and for charitable purposes, when 
the exemption is made by general law. 12 By statute the 
legislature has provided for these exceptions, and also 
established other specific exemptions as follows, school 
lands, not leased ; fire apparatus ; public markets ; all state 
property; and property used by mechanical and phil- 

a Const. Art. 9, par. 3. 



16 MUNICIPAL REVENUES IN ILLINOIS [376 

osophical societies without profit. 13 A law exempting fra- 
ternal insurance funds was held unconstitutional, 14 as 
have been other acts attempting to exempt other classes of 
property not embraced in the constitutional provisions. 

METHOD OF ASSESSMENT AND COLLECTION. 

For the assessment of taxes there is elected an as- 
sessor in each town, except in those counties not under 
township government. In these latter localities the county 
treasurer acts as assessor, the deputies being appointed 
by the county board. In the spring of the year valuation 
is made of the property within each taxing district, the 
owner being required to fill out a schedule of personal 
property. Once in four years real property must be viewed 
for assessment. The results both as to real and personal 
values are certified to the county clerk, who corrects all 
apparent errors. The county boards of review revise as- 
sessments upon request of the owner; hear complaints of 
overvaluation; and may correct any inequality among 
townships, provided the grand total of assessments is not 
diminished. The assessments are then certified to the 
state auditor who transmits them to be passed on by the 
state board of equalization. This board may equalize total 
valuations among counties by increasing or reducing the 
local assessments by not more than ten per cent. The 
final results are certified back to the county clerks, who 
estimate and spread the taxes 15 on the tax collectors books. 

In counties under township government, the county 
treasurer is ex officio county collector, and receives from 
the town collector state and county taxes ; and also collects 
delinquent city taxes and special assessments. In counties 
not under township government the sheriff is ex-officio 
collector of taxes. Taxes are due the first of January; 
personal property taxes must be paid by March first; and 

"Rev. Stat. ch. 120, par. 2. 

"Modern American Fraternal Order v. Board of Review, 223 III. 54. 

"Rev. Stat. ch. 120, par. 128. 



377] PROPERTY TAXATION 17 

all taxes on real property become delinquent on June first. 
In cases of unpaid taxes, after certain notice and adver- 
tisement, application is made to the county court for judg- 
ment. Upon judgment being given (from which an appeal 
may be taken to the Supreme Court if bond for costs is 
given), the property or a necessary portion of it is adver- 
tised for sale. The property is then sold to the person 
bidding the delinquent taxes plus the least per cent 
for penalty. Property so sold may, however, be redeemed 
at the office of the county clerk within two years, upon 
payment of the delinquent tax, subsequent taxes and as- 
sessments, and the penalty, this last being graduated from 
that bid to four times that sum during the last six months 
of grace. 10 

PROPERTY TAXES. 

The foregoing is a meager outline of the system of 
taxation as applied to municipalities in Illinois and may 
make clearer a review of the workings of the property 
tax. 17 

In tables 30 and 31 is a statement of the amount of 
property tax received by each of the twenty-four cities in 
Illinois for which data was secured, and the relation of 
such sums to the total amount of municipal income for the 
year 1909. The tax rates are given in table 1, and with 
them the ratios of taxes to the total city, incomes from 
which all commercial revenues except those producing a 
profit have been subtracted. In three instances 18 the net 
profit from commercial enterprises is included in the total 
income. The city which receives the least proportion of 
its revenue from property taxes is Joliet, the return of 
40.1% of the whole income. Streator follows with 51.25% ; 

M Rev. Stat. ch. 120, par. 182-210. 

"A more complete outline will be found in A Report on the Taxation 
and Revenue System of Illinois, prepared for the Special Tax Commission 
of Illinois by John A. Fairlie. A compilation of Tax Laws and Judicial 
Decisions accompanies the report of the commission. 

"See Table 19. 



18 MUNICIPAL REVENUES IN ILLINOIS [378 

while the maximum percentage received is 97.6% in Ur- 
bana. The average is 68.1%. For comparison it is inter- 
esting to separate the cities receiving saloon licenses from 
those which do not. In the seven no-saloon license cities 19 
the average of the total revenue received from 
property taxation is 86.2% while the average for the re- 
maining cities is 60.5%. 

A more interesting comparison of the taxes received 
by cities for general purposes is upon a per capita basis. 
Though such a relationship is inaccurate inasmuch as 
population is not a direct creator of taxes, yet population 
does have a direct influence upon the cost of government. 
The minimum per capita general tax is in Streator, the 
amount being $2.33 per person. The next lowest is $2.76 
in Joliet ; while the highest rate is $8.34 in East St. Louis. 
In this comparison the no license cities do not hold so un- 
favorable a position in the matter of taxation, the average 
rate for the seven municipalities being $4.62 per capita. 
The average for the remaining corporations is $4.50 not a 
considerable difference. 

A third and more frequent method of considering city 
finances is a comparison of the tax rates. In table 1 is 
shown the general rate for each city for each $100 of as- 
sessment (including administrative, library, sanitary, 
park, bond and interest taxes) ; the complete school rate; 
and the total rate. The highest rate for general purposes 
is in Quincy, $2.37. La Salle follows with $2.15; while 
the smallest is $1.25 in the "dry" city of Rockford. Cities 
having no saloons stood highest in the average per capita 
tax, yet with the exception of Urbana their tax rates are 
quite normal. This lack of relationship between the tax 
rate and the per capita tax income, coupled with the fact 
that cities in which a high tax rate should be anticipated 
have quite the contrary, may be due to one or both of two 
causes: variation in the basis of local assessments, or in 
the per capita wealth of the several cities. 

"Champaign, Decatur, Evanston, Galesburg, Jacksonville, Rockford 
and Urbana. 



379] 



PROPERTY TAXATION 



19 



TABLE i. 

RELATION OF PROPERTY TAXES TO TOTAL INCOME/ TAX RATES AND 
PERCAPITA TAX INCOME IN 24 ILLINOIS CITIES IN 1909. 





Percent of Total 
income 1 


Percapita Tax 
(general) 


X 
ft 

H 

u 

"rt rt 
1 

B 

o 


u 

rt 
K 

"o 
o 

y 

in 


u 

rt 
H 

"c3 



H 


Percapita Realty 
Assessment 


Percapita 
Personalty 


~<n 

i/) 

< 

"c3 



H 


Alton 


57.8 


$3.42 


$1.42 2 


$2.00 


$3.42 


$158 


$84 


$242 


Aurora 


70.0 


4.80 


I. ~O 


i.5ij 


3.2I 4 


208 


75 


283 


Belleville 


54.7 


3.76 


i. 60 


4S\ 

85 


3.45 


157 


52 


2OQ 


Bloomington . . . 
Champaign 
Danville 


61.5 
92.0 
56.0 


4.26 
3-88 
3.67 


1-53 
1-34 
i 46 


.72 
.92 
.20 


3-25 
3-26 

2.66 


242 
216 
181 


78 

86 

OI 


320 
302 

272 


Decatur 


83.7 


4.02 


1.67 


2.76 


4.43 


169 


71 


240 


E. St. Louis 


71.0 


8.34 


1.48" 


I.QO 


3.38 


195 


27 


222 


Elgin 


71.4 


4 c8 


I 77 


I OO 


7 21 


2O2 


122 


324 


Evanston 


65 i 


5.38 














Freeport 


62.2 


3.80 


1.40 


1.05 


7.44 








Galesburg 


91.8 


5.58 


1.57 


1.69 


3.26 


217 


72 


289 


Jacksonville .... 
Joliet 


85.8 
40.1 


376. 
2./6 


x:* 
1.40 

1.40 


2.OO 
1.85 


3-40 

3.25 


192 
155 


77 
48 


209 

2O3 


LaSalle 


52 3 


7.4.1 


2.15 


1.80 


3.05 


121 


41 


162 


Moline 


61.0 


AAA 


1.03 


2.42 


4.35 


154 


81 


235 


Ottawa 


55.7 


5.20 


1.95 


2.OO 


3.95 


152 


98 


280 


Peoria 


65.5 


5.18 


1.78 


1.87 


3.65 


223 


68 


291 


Quincv . 


70.O 


6. 50 


2.37 


1.42 


3.79 


117 


49 


166 


Rockford 


87.7 


4.72 


I.2S 


I.O7 


2.32 


260 


116 


376 


Rock Island . . . 
Springfield 
Streator 


64.5 
64.0 
51.3 


4-37 
5-68 
2.33 


1.85 

1.81 
1.30 


i-93 
1-73 

2.IO 


3-26 

3-54 
3.40 


183 
233 
135 


57 
81 
51 


240 
321 

186 


Urbana . 


O7.6 


5.02 


2.03 


2.6 1 


4.64 


203 


50 


253 



'Excluding commercial revenue, except net profit. 

'1910. 

*$i.83 sanitary tax extends over a limited area. 

4 Larger proportion. 



20 



MUNICIPAL REVENUES IN ILLINOIS 



[380 



w 



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a I 

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2 

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.... 1 4,250,096 


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Springfield 
Streator 
Urbana 


5 


Aurora . . . 
Belleville . 


Bloomingtor 
Champaign 


Danville . . 
Decatur . . . 


s I 

"1 

W W 


Galesburg . 
Jacksonville 








T3 


"rt 

.a ^ 

"o ^ 
1 1 1 


Moline . . 
Ottawa . 


I ' -o J5 

u <n 

_, >> O ' 

~ O * i t 

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O "S w o 

4> 3 O O 

cu a cd 



s 

381] PROPERTY TAXATION 21 

PERSONAL PROPERTY TAXES. 

It is quite possible that variable standards of real 
property assessment prevail in different municipalities, 
but these cannot be ascertained without a more intensive 
investigation than has here been possible. It is even more 
probable that there is an inequality of personal property 
assessments, 20 which may be shown through a comparison 
with the assessments of the cities. 

Table 2 is an exhibit of the property assessment of the 
cities considered giving the assessments in the classes 
under which they are returned. In table 3 is the ratio of 
the real and personal assessment to the total assessment 
in each city, as compared with the ratios in the counties 
in which these cities are located, 21 as well as the ratio of 
personal property to the assessed value of city lots. That 
these ratios would have a considerable range would be 
anticipated, since sections of the state vary widely in the 
amount and nature of their wealth. That this variation is 
greatest within cities is apparent. Of the assessed valuation 
in counties, the proportion of personal property to real 
estate is least in Champaign county, being 16.8% of the 
total, the greatest in Kane county, where it constitutes 
27.87% of the total assessment. Thus the variation has a 
range of 11.07% of the whole. The least proportion oT 
personal property in cities is in East St. Louis, 13.5% ; 
while the largest proportion, 39%, is in Ottawa. The var- 
iation is 25.5% of the whole, or twice the variation as 
between counties. Large manufacturing or railroad prop- 
erties situated in a locality would tend to increase the real 
property ratio, but cannot account for the entire difference. 
That the method of assessing personal property is to a 
large extent responsible for this is proven by comparing 
two corporations of a homegeneous character, as the con- 
tiguous cities of Champaign and Urbana. In the former, 
personal property constitutes 28.9% of the total assess- 

"Fairlie, supra cit, p. 41. 

"Biennial Report of the Auditor of Public Accounts (1908) p. 154. 



22 MUNICIPAL REVENUES IN ILLINOIS [382 

ment, while in the latter it is only 19.7%. Similarly, the 
Rock Island assessment has 23.5% in personalty, while in 
the adjacent city of Moline 34.5% of the property is per- 
sonal. Elgin and Aurora are cities of similar size and 
nature, in the same county; personal property amounts to 
38% of the total assessment in one, and to only 26.2% in 
the other. 

In order to eliminate any bias which might occur by 
including vacant lands and railroads in the real property 
assessment, the personal property of each city has also 
been compared with the assessed value of city lots. It 
was, however, impossible to separate telegraph and tele- 
phone values from the personalty, as was desirable for 
this comparison. By this method, Ottawa still had the 
largest proportion of personal property, 41.5% of the 
total; Urbana had least, 21.6%. The range of variation 
was 19.9%, or several percent less than in the comparison 
made with the total real property. 

The variation in assessments is further emphasized 
by a review of the per capita assessments of real and per- 
sonal property in each city. In two cities in which the 
real property assessment ranges from $202 to $203 per 
person, the per capita assessment of personal property 
varies from $122 to $50; and in seven cities in which the 
real property assessment varies from $155 to $195 per 
capita, the personalty assessment varies from $27 to $91. 

These figures indicate the danger of accepting the 
city tax rate as testimony of the cost of administration. 
Rockford has the lowest tax rate for general purposes of 
the cities considered, yet has a per capita assessment al- 
most double the average for the state. Quincy with the 
highest tax rate for general purposes is among those having 
the smallest per capita assessment. 

Though the amount of personal property varies in 
each community, the facts indicate that several cities are 
collecting taxes on much less than the tangible personal 
property within their jurisdiction. Under such conditions 



383] 



PROPERTY TAXATION 



23 



an increase of city revenues may be more or less easily 
secured by action of the township assessor and the county 
board of review. 

TABLE 3. 

RELATION OF THE ASSESSMENTS OF REAL AND PERSONAL PROPERTY TO THE 
TOTAL ASSESSMENTS IN CITY AND COUNTY, AND THE RELATION OF THE 
CITY PERSONALTY ASSESSMENT TO THAT OF CITY LOTS. 





County 1907 


City, 1909 




u 




c 
o 
o 




"c3 


Pti 


Personal 


"ca 


Pti 


Personal 


Personal to 
Lots only 


" 

4) 

CK! 


Personal 


Alton 


Madison . . . 
Kane 


73.44 
72.13 
80.30 

80.12 
83.18 
79.90 
80.94 
80.30 

72.13 
77-20 
76.14 
76.50 
79-44 
81.00 
82.56 
78.07 
82.56 
80.44 
72.20 
74-94 
78.07 
80.63 
82.56 
83.18 


26.56 
27.87 
19.70 
19.88 
16.82 
20. 10 
19.06 
19.70 
27.87 
22.80 
23.86 
23-50 
20.56 
19.00 
17.44 
21.93 
17-44 
19.56 
27.80 
25.06 
21-93 
19-37 
17-44 
16.82 


65.2 
73-8 
75-2 
75-3 
71.1 
65-3 
70.0 
86.5 
62.0 

75-0 
71-5 
76.5 
75-0 
65.5 
61.0 

76.9 
70.2 
69.0 
76.5 
74-0 
72.6 
80.1 


34-8 
26.2 
24.8 

24-7 
28.9 

34-7 
30.0 

13-5 
38.0 

25.0 
28.5 
245 
25.0 

34-5 
39-0 
23.1 
29.8 
31-0 
23-5 
26.0 

27-4 
iQ.7 


62.2 

71.5 
73.0 
71.5 
69.6 

66.1 
68.0 
77-6 
60.5 

72.0 
69.7 
75-8 
71-5 
61.2 

58.5 
75-7 

65-4 
74.6 
69.0 
77-9 
78.4 


37-8 
28.5 
27.0 
28.5 
30-4 
33-9 
32.0 
22.4 
39-5 

28.0 

30.3 
24.2 
28.5 
28.8 
41-5 
24-3 

34-6 
25-4 
31-0 

22.1 
21.6 


Aurora 


Belleville 


St. Clair ... 
McLean .... 
Champaign . 
Vermilion . 
Macon 
St. Clair.... 
Kane 


Bloomington .... 
Champaign 


Danville 


Decatur 


E. St. Louis .... 
Elgin 


Evanston 




Freeport 


Stephenson 
Knox 
Morgan 
Will 


Galesburg 


Jacksonville 
Joliet 


LaSalle 


LaSalle 
Rock Island 
LaSalle 
Peoria 
Adams 
Winnebago 
Rock Island 
Sangamon . 
LaSalle .... 
Chamoaien . 


Moline 


Ottawa 


Peoria 


Quincy . 


Rock ford 


Rock Island 
Springfield 


Streator 


Urbana . 



24 MUNICIPAL REVENUES IN ILLINOIS [384 

LOSSES IN COLLECTION. 

Another cause of considerable loss to cities is that 
of interest on delinquent taxes. The average term of mu- 
nicipal loans made in anticipation of taxes is about five 
months, or only a trifle longer than that allowed for the 
collection of taxes. The township collector relinquishes 
his books on the tenth of March and the duty of collection 
passes to the county treasurer, thus necessitating duplica- 
tion of the collection machinery. An idea of the import- 
ance of this latter officer in the collection of delinquent city 
taxes may be gained from the following exhibit, which 
gives the sums received by a number of cities during the 
fiscal year 1909 from the two collecting agents, and the 
percentage of the total receipts accredited to each. It 
has been suggested that one of these agents be eliminated 
with a view of lessening the expenses of collection. 22 

TABLE 4. 
CITY RECEIPTS FROM TOWN COLLECTORS AND COUNTY TREASURERS, 1909. 

City Town Coll. Per Cent County Coll. Per Cent 

Evanston $73-889 53-3% $64,757 46.7% 

Joliet 61,347 49.6 62,392 50.4 

Ottawa 39,390 71.8 15,419 28-2 

Peoria 218,022 75.2 71,538 24.8 

Rockf ord 66,320 43.6 131,861 66.4 

One of the fixed charges in the collection of taxes is 
the percentage going to the collector for remuneration; 
to which may be added the fee of the county clerk for 
extension. In addition to the 2% collection fee, in Free- 
port the reserve for the loss through unpaid taxes and 
cost of collection of delinquent taxes was 1.1% of the 
total levy, or a total of 3.1%. Evanston, in addition to the 
charges of the collector, paid the county treasurer .03% 
of the total for the extension of the levy, and .92% of his 
collections as a commission. Based upon the amount lev- 
ied, 1.46% was deducted for the cost of collection, .032% 
for clerk's fees; and 4.78% was uncollectable, making the 

**Fairlie, Taxation and Revenue System of Illinois, p. 17. 



385] PROPERTY TAXATION 25 

theoretical net income to the city 93.728% of the levy. Of 
the losses the largest item of 4.78% was diminished a frac- 
tion of a percent by the payment of back taxes. Through 
back taxes and the extension of the levy specified in the 
ordinance, the city received 94.5% of the sum requested. 
The same city realized 93.4% of the library taxes levied, 
4.18% of the loss being in uncollectable taxes. The amount 
of back taxes received was only .01375% of the total levy. 
Thus far no reference has been made to the Road and 
Bridge tax which by the law of 1883 23 may be assessed in 
each township. Under this provision one-half of such 
receipts are returned to the cities in the township for the 
building and repair of roads. By an act of 1909 24 the 
statute was changed so that cities over 20,000 were to re- 
ceive all such taxes levied within their boundaries, which 
was deemed a more equitable distribution. There has been, 
however, some question as to the legality of the change. 
In Danville the city was not allowed to come into posses- 
sion of the funds ; and Rockford has been sued by the town- 
ship highway commissioners for $60,000, which was re- 
ceived by the city. In table 30 i/6> a statement of the shares 
of the Road and Bridge tax which came to the cities in 
1909. Owing to the present legaKsituation, comment would 
be useless. 



Rev. Stat. ch. 121, par. 16. 
"Laws of 1909, p. 332. 



CHAPTER II 
LICENSES AND POLICE FINES. 

LICENSE REVENUE. 

License charges are legally of two kinds, those relat- 
ing to occupations and industries which may be absolutely 
prohibited, and those upon industries which only permit 
of regulation. A more practical division, however, is made 
upon the basis of financial return to the municipality, 
liquor licenses being placed first, followed by general 
licenses, business licenses and the vehicle tax. It is in 
this order that they are discussed. 

Liquor Licenses. 

The power of the legislature to tax the traffic in intoxi- 
cating liquors is enumerated in the constitution of the 
state 1 and was delegated to municipalities by the general 
act of 1872. 2 This act gave to city councils the right to 
regulate, license and prohibit the selling of malt, mixed 
or fermented liquors, any license not to extend be- 
yond the municipal year in which it was granted. It is 
further provided that cities must, in licensing, conform 
with the general state laws in force. 

There are now a number of state statutes, providing 
among other things, that the minimum license for a shop 
where the aforementioned liquors are sold at retail shall be 
f 500 per year, which sum shall be collected in advance for 
such periods as the city council may designate. Licenses 
for the sale of malt liquors may not be granted for less than 
$150 per year. There are no state laws concerning the 
wholesale liquor trade. The imposition of a license on these 
dealers lies in the discretion of the municipal councils. 

'Const, of 1870, Art. 9, par. i. 

'Kurd's Revised Statutes, (1908), ch. 24, par. 62, item. 46. 

26 



387] LICENSES AND POLICE FINES 27 

When a license is required, the penalty for operating with- 
out one is a fine of from $50 to $150, the possession of a 
government permit being prima facie evidence of the sale. 
Any license is subject to revocation should the owner 
maintain more than one saloon, or permit disorderly con- 
duct or gambling. 

The holder of a dramshop license is required to pro- 
vide a bond of $3,000 to cover any damages which may 
be sustained by reason of his selling intoxicating liquors; 
and he may be required to support a person kept in a 
state of continual intoxication. The rights of an injured 
person, his heir or employer, may be enforced against the 
owner of the building in which the offending saloon is 
located. 

Certain matters of regulation are left to the local 
authorities, among which are eligibility for a license, max- 
imum cost of the license, distribution of the license money, 
periods of payment, limitation of the license district and 
restriction of tjhe number of saloons. 

Table 31, giving the percentage of total city income re- 
ceived from liquor licenses, ranging (in license cities) from 
20.7% ir\ Aurora to 41.3% in Streator, shows the import- 
ance of such revenues to municipalities. It will be gen- 
erally admitted that the presence of saloons is not an un- 
mitigated benefit, yet city revenue systems have been con- 
structed with a view of large incomes from this source. The 
problem of saloon licensing is therefore one of securing the 
maximum revenue with the least harmful results. 

Table 5 states the number of saloons in each city, pop- 
ulation per saloon, license rate, license income per inhab- 
itant, periods of license payment, restrictions upon the 
saloon district, and upon the number of saloons. It is 
usually accepted as true that a high license rate reduces the 
number of saloons and increases the amount of revenue. 
While this is a reasonable proposition it cannot be proved 
by a comparison of the per capita license income in high 
and low license cities. That a city has a high license is 
indicative that its population is not given to the large sup- 



28 



MUNICIPAL REVENUES IN ILLINOIS 



[388 



port of saloons, and hence the number is automatically lim- 
ited. Further, six of the seven cities which charge more 
than $500 for a license place an arbitrary restriction upon 
the number of licenses issued. 

TABLE 5. 

NUMBER OF SALOONS, POPULATION PER SALOON, LICENSE RATE, AND OTHER 
DATA RELATIVE TO THE LIQUOR TRAFFIC IN ILLINOIS CITIES, 1909. 











V 




vw 
O 


o 


> 




o 

. 

0*3 
c/} 




6,, 

O rt 
OnC/) 


License Rate 


J3 

u a 

c _c 

"". 
3 

H^ p. 


O 

en C 

V 

.2 E 

u X 

u .- 
PUP-. 


O 

"G t! 
.' c 
5.9 

KG 


c 

11 

tn B 

xz 


Alton 


68 


257 


$500 


1.72 


Annual 


"Usual" 


None 


Aurora . . . 


42 


710 


IOOO 


1-43 


Semi-ann. 3 


Fire limits 


IOOO pop. 4 


Belleville . . 


H3 


187 


500 


2.63 




None 


None 


Bloomington 


76 


339 


600 


1.86 


Quart. 


None 


None 


Danville . . . 


76 


366 


800 


2.39 


Quart. 


Bus. Section 


500 pop. 4 


Decatur 1 . . . 


48 


648 


IOOO 


1-54 


Semi-ann. 


Bus. Section 


None 


E. St. Louis. 


343 


171 


500 


2.65 


Quart. 


"Discretion 


None 














of Mayor" 




Elgin 


14 


764 


IOOO 


1.31 


Semi-ann. 


Fire limits 


33 for 25,000 
i per 




*n 












|rwa 

1,000 add. 


Freeport . . . 
Joliet 


4 6 
136 


382 

255 


500 

IOOO 


1.30 

3.92 




Bus. Section 
"Usual" 


None 
500 pop. 4 


LaSalle 


57 


2O2 


500 


2.70 


Annual 


5 


250 pop. 4 


Moline 


63 


384 


1002 


2.60 


Semi-ann. 


None 


500 pop. 4 


Ottawa 


49 


194 


500 


2.65 


Quart. 


None 


49 Saloons 


Peoria 


300 


223 


600 


2.05 


Quart. 


None 


400 pop. 4 


Quincy 


145 


252 


500 


1.98 








Rockford 1 .. 


50 


908 


IOOO 


1.14 


Semi-ann. 


Bus. Section 


looo pop. 4 


Rock Island. 


06 


253 


500' 


1.97 


Semi-ann. 


None 


None 


Springfield . 


200 


258 


500 


2.10 


Annual 


"Usual" 


None 


Streator 


65 


219 


500 


1.87 


Quart. 




66 Saloons 



'1910 "Dry" during period studied. 

'Now $600. 

'Bond given for last installment. 

4 Limit will become operative only when population increases. 

No saloons in residence district except those already there. 



389] LICENSES AND POLICE FINES 29 

Ten of eighteen cities so restrict the number of licenses 
issued, eight of these limiting upon the basis of population. 
In most cases, however, the number of saloons exceeds the 
number the restriction would normally allow, and there 
must be a large increase in population before there can be 
an increase in liquor shops. In Elgin and Decatur an 
arbitrary minimum of saloons was fixed, any increase to 
follow an increase in population. In each instance of re- 
striction of number, the licenses already issued assume a 
monopoly value. Since the municipality has limited its 
own income incidental to this, it appears reasonable that 
such increment should be turned to the city treasury. An 
example of such loss accompanying the limiting of the 
number of saloons is found in LaSalle, where the number 
was decreased from 66 to 57, involving a shrinkage in 
license fees of $4500. A similar decrease in income was ex- 
perienced in Rockford, which city actually restricted the 
number of saloons to one for each 900 inhabitants; while 
Decatur, a city with a similar class of citizens and a similar 
attitude toward the liquor question, supports one saloon 
for each 600 people. 3 On this basis the former city was los- 
ing by restriction of the number of licenses the revenue of 
twenty saloons, or $20,000. As the saloons established 
were approximately transacting the business which might 
be done by twenty more, they should bear the loss incurred 
by the city by reason of the monopoly allowed. This would 
raise the license rate in Rockford to $1400 per year. 4 

More than one-half of the cities studied restrict the 
license district to the fire limits or to the business district. 
In the others the only check upon location is the usual leg- 
islative provision concerning frontage signatures. Saloons 
in the residence districts naturally increase the license reve- 
nues, but have many objectional features in addition to 
necessitating a direct increase in the police force. 

'Both cities went "no license" in 1908; have since gone "wet" and 
enacted stringent laws regarding the sale of liquor. Rockford in 1912 
again reversed its position. 

4 Similarily an equitable license rate in Elgin would be $1175; and in 
Aurora $1100. 



30 MUNICIPAL REVENUES IN ILLINOIS [390 

Of fifteen cities two require that the license fee be 
paid annually; six, semi-annually ; and the remainder, 
quarterly. Under a system by which cities do not receive 
interest upon their funds on deposit, there is little object 
in requiring that the license payment be made at the be- 
ginning of the year. However, the interest upon the con- 
siderable sums of license money would amount to several 
hundred dollars per year for each city, were licenses paid 
at the beginning of the year and interest collectable. 

It has been mentioned that the law requires licenses 
to be paid for in advance. In Chicago, thru neglect to 
enforce this provision, losses were formerly large. 5 Sa- 
loons neglected prompt payment, and if going out of busi- 
ness paid only a prorata for the time open. In the smaller 
cities of the state this is never the case. Of nineteen cities, 
sixteen require that the fee be paid strictly in advance; two, 
(Ottawa and Rock Island) allow from a few days to a 
week of grace, and in only one city (Springfield) were 
payments reported seriously in arrears. 

Nor do refunds make any considerable inroads into the 
sums collected. Five cities reported refunds of saloon 
licenses: Rockford, to the amount of $478; Rock Island, 
$250; and Peoria, $1083. 6 This last city refunds only in 
case of unavoidable accidents, "an act of God". Spring- 
field refunds for the same reason; Decatur also refunds; 
but in these last two cities the refunded amounts could not 
be obtained. 

General Licenses. 

The authority to require other licenses as a means 
of revenue is also derived from the constitution. The 
legislature is granted the power to tax by general law, 
peddlers, auctioneers, brokers, hawkers, merchants, com- 
mission merchants, show men, jugglers, inn keepers, and 
grocery keepers; toll bridges and ferries; insurance brok- 
ers; telegraph and express interests; vendors of patent 

Merriam, Municipal Revenues of Chicago, p. 115. 
'Includes refunds of taxes. 



391] LICENSES AND POLICE FINES 31 

medicines; and persons owning and using franchises and 
privileges. 7 Such taxation is definitely authorized by law 
for purposes of revenue, and hence is not dependent for its 
legality upon police powers. 

By a series of acts, the legislature has authorized mu- 
nicipal licensing of nearly every occupation which par- 
takes of a public or quasi-public character, enjoys special 
privileges, or requires police supervision. 8 It is imprac- 
tical to make an accurate calculation of the value of a 
privilege which an occupation may enjoy, but such occu- 
pations are the object of an easily imposed and collected 
tax. Expediency in taxation is frequently paramount to 
absolute justice. In any event the incidence of license 
taxes is often shifted to some extent, and in all probability 
works no greater injustice than other frequent forms of 
taxation. 

By statute cities have acquired the right to license, 
regulate and suppress the following occupations and busi- 
nesses, 9 wharf boats and tugs used about harbors or 
within the jurisdiction of the same; hawkers, peddlers and 
pawnbrokers; keepers of ordinaries, theatrical and other 
exhibitions, shows and amusements, billiard and pool 
tables; bowling alleys; and transient vendors of merchan- 
dise. 10 

The privilege of peddling merchandise is given to 
ex-union soldiers free of charge upon demand and after 
presentation of proof of army service; 11 and every farmer, 
fruit and vine grower has the right to sell his own pro- 
duce where such articles are usually sold without a city 

'Const. Art. 9, par. i. 

*"Altho a constitution grants to a legislature the power to impose 
certain classes of occupational taxes which are enumerated, it may dele- 
gate to municipal bodies the power to impose for municipal purposes, 
taxes which are not included in the constitutional enumeration." Wiggins 
v. Chicago, 6 III. 372. 

*The courts have held that the legislature may delegate its power to 
the local authorities by general law. See Braun v. Chicago, no III. 190. 

Rei>. Stat. ch. 24, par. 62, items 35, 41 et seq. 

a lbid ch. 24, par. 651. 



32 MUNICIPAL REVENUES IN ILLINOIS [392 

license, any ordinance to the contrary notwithstanding. 12 
The streets, however, must not be obstructed nor the liquor 
laws violated. The licensing of houses of prostitution or 
the medical inspection of the same is expressly forbidden. 

Municipalities are granted the right to license and to 
regulate, but not to suppress, in the following instances, 
runners for stages, cars and public houses; wagons and 
other vehicles conveying loads within the city, or any par- 
ticular class of such wagons and other vehicles, and to 
prescribe the width of tire for the same; 13 hackmen, dray- 
men, omnibus owners, carters, cabmen, porters, express- 
men, and all others employed in like occupations, and to 
prescribe their compensation; second-hand 14 and junk 
stores, and to forbid them from purchasing and receiving 
from minors; auctioneers; distillers and brewers; lumber- 
yards, livery stables, public scales, blacksmith shops, 
foundries, and brokerage shops. Dogs may be taxed and 
restrained. Elevator operators and plumbers may also 
be examined and licensed, and an additional license may 
be imposed upon plumbing establishments. 15 The license 
fee on vehicles when collected must be kept in a separate 
fund and used only for paying the cost and expense of 
street and alley improvement and repair. 16 

Foreign insurance companies are required "upon de- 
mand to pay into the treasuries of the cities in which they 
have agents, not more than two percent of the gross re- 
ceipts upon the insurance in force within the boundaries 
of the municipality. 17 

Not all of the license income received is turned into the 
general treasury of the city collecting it. In municipalities 
having more than 50,000 inhabitants the firemen's relief 
fund is the recipient of one-half of the fire insurance 

"Rev. Stat. ch. 5, par. 23. 
"Ibid ch. 24, par. 62, items 43, 96. 

"Does not include book stores. Eastman v. Chicago. 79 ///. 178. 
"Rev. Stat. ch. 24, par. 62, item 42 et seq. 

M For constitutionality see Harder's Fire Proof Storage and Van Co. 
v. Chicago. 235 III. 58. 

"Rev. Stat. ch. 24, par. 423. 



393] LICENSES AND POLICE FINES 33 

tax. 18 Also the police pension fund in such cities is made 
up in part of three-fourths of the dog tax, three percent 
of all other city licenses up to $2500, and the fines from 
the violation of the police ordinances. In cities of smaller 
size the police pension fund consists in part of three- 
fourths of the dog tax, two percent of the saloon licenses 
(upon vote of the citizens), ten percent of the city ordin- 
ance fines and ten percent of all other licenses, the total 
not to amount to more than $2500 in a year. 19 

Table 6 is a statement of the total income from all 
licenses (except wheel and insurance taxes) for the year 
1909 in the cities under consideration ; of this income classi- 
fied according to the more important sources; and of the 
per capita income excepting that from saloons. Where the 
income is not separated into its several sources the informa- 
tion was not available. The division of "other licenses" 
consists of scattering miscellaneous licenses and the more 
important business taxes which are considered later. 

The most striking feature of the table is the wide 
variation in the percapita income from general licenses 
which ranges from as low as four cents per person in 
Ottawa, to thirty-five cents in East St. Louis. 

The largest of these variations is accounted for by the 
collection of business taxes in certain cities, but the vari- 
ation among others is sufficient to demonstrate the desira- 
bility of systematic licensing and collection. 

It is evident that general licenses can be depended 
upon to contribute annually from $1000 to $5000 of the 
municipal income providing there is a proper system of levy 
and collection. Unfortunately no plan has been advanced 
to insure payment, other than that of tagging, which can 
be employed only in special cases. In frequent instances 
the enforcement of certain licenses has been allowed to 
lapse entirely. An example of this is the tax on dogs, 
which if effectively applied will produce $1000 a year in 
cities of even moderate size. In Rockford the tax is author- 

"Rev. Stat. ch. 24, par. 382. 
"Rez>. Stat. ch. 24, par. 391. 



34 



MUNICIPAL REVENUES IN ILLINOIS 



[394 



TABLE 6 
TOTAL AND PER CAPITA INCOME FROM LICENSE TAXES, ILLINOIS CITIES, 1909 







t) 






"c 


bo en 














O 









'-H u 




en 


J3 






t) 1 

Eg 
8.S 1 


(J 

c 

1 1 






V 
en 

3 


l| 




rt 


u 

rt 

ffi 


en 




c ,_! 


in 






< 


3 bo 




T3 |r 


"O 


in 






c 






"O 


o.S 




G l*-4 


C 


C 




rt E 


B 






C 






S 


rt 


V 


u, 


C. u, 
rt +H 


O 


o 

3 


en 

'Sb 
bo 

3 

IH 


heatre a 


ij 


in 

bo 

O 


eddlers 
inerant 


aymen 


u 


o 


ew rt 


H 


3 


Q 


H 


rt 


Q 


OH a 


M 

Q 


6 


Alton 


$.31 


$36,173 


$30,684 


$ 37 


$ 370 


$ 265 


$1,106 


$ 75 


None 1 


$3,634 


Aurora . . 


.10 


45,974 


42,824 






935 


None 


400 


$ 230 


1,585 


Belleville . 


.18 


60,442 


55,691 


120 


246 


718 


804 


240 


None 1 


2,621 


Bloom'n .. 


.17 


52,549 


47,900 


1 80 


5i8 


1,130 


None 


705 


455 


1,659 


Champ'n . 


.16 


1,994 


None 


None 


583 


1,040 


None 


161 


2OI 


None 


Danville . 


.11 


70,645 


66,600 


None 


900 


306 


None 


755 


1 10 


904 


Decatur ... 


.10 


3,191 


None 


None 


762 


410 


375 


1,361 


263 


1,483 


E. St. Lo's 


35 


179,809 


I55,4io 


798 


861 


1 20 


2,081 


4,295 


None 1 


16,243 


Elgin 


.12 


37,H4 


34,000 








870 








Evanston . 


.22 


5,510 


None 








2,187 








Freeport .. 


.11 


25,160 


None 




4.87 




542 








Galesburg 


.IO 


2,529 


None 








238 








Jack'ville... 


05 


876 


None 


None 


250 


520 


None 




None 


106 


Joliet 


.07 


139,045 


136,000 


160 


550 


919 


666 


320 


101 


i,075 


LaSalle ... 


13 


34,400 


33,iio 


None 


265 


None 


260 


370 


87 


308 


Moline .... 


.14 


66,226 


63,126 












370 


3,130 


Ottawa .... 


.04 


25,680 


25,250 


90 






no 








Peoria 


.18 


149,300 


137,307 


1,144 


1,587 


925 


1,940 


1,674 


538 


3,141 


Quincy 


.21 


80,091 


72,500 








1,928 








Rockford . 


.09 


4,056 


None 
















Rock Isl'd 


.14 


51,697 


48,025 


00 


965 


560 


176 


868 


243 


770 


Springf'd 


.14 


115,604 


108,435 


613 


851 


96 


None 


609 


317 


4,682 


Streator ... 


.06 


27,764 


26,750 


None 


225 


340 


103 




00 


256 


Urbana ... 


05 


405 


None 


None 


loo 













'Included in wheel tax. 

Absence of data does not necessarily signify that no such tax is 
required, but may mean that the amount collected was so small as to be 
reported under "other licenses." 



395] LICENSES AND POLICE FINES 35 

ized, but the ordinance is a "dead letter". Such a condi- 
tion is better, however, than the unequal enforcement of 
the law in Ottawa, Galesburg, Streator, and more strik- 
ingly in Rock Island. Each of these cities except Streator 
has a larger population than Freeport, yet no one of them 
received an amount from dog taxes equal to half that 
collected in the last named city. 

On the other hand, an example of a license which is 
almost uncollectable is that on hotel "runners" or porters. 
Peoria, with its numerous hotels, received three dollars in 
1909 from this source. In Rockford no attempt is made to 
enforce the licensing ordinance. A license tax of this na- 
ture may be classed with those frequently intricate ord- 
inances taxing peddlers, hawkers and auctioneers. In 
Urbana an ordinance of this kind by a complicated classi- 
fication of the goods sold, method of transporting them and 
the length of time the permission is to continue, invites 
non-enforcement by its complexity. 

Table 7 is a compilation of the principal licenses and 
the rates imposed in the twenty-four cities under consider- 
ation. The field is very wide ; yet from the point of view of 
revenue only a few occupations furnish any considerable 
income. The most important sources are baggage and ex- 
press wagons, billiard and pool halls, druggists, pawn- 
brokers, junk and second hand stores, and theatres of all 
types. These industries have been long subject to license 
taxation, and a review of the city reports shows that 
licenses of this kind form the backbone of the license 
income. The businesses are permanent; the burden of the 
tax can be shifted in most cases only upon the well-to-do ; 
and, what is more important, the taxes are easily collect- 
able. The remainder of the occupations subject to licensing 
are of less permanent character, or of such a nature that 
a heavy license would be oppressive. Under such condi- 
tions license taxation is most successful if concentrated on 
a few occupations where the returns will be productive, 
rather than scattered over a varietv of trades at low rates. 



36 



MUNICIPAL REVENUES IN ILLINOIS 



[396 



1HW 



io 



* 






asnojj 



sjBog 



c 



S80Q 



sjsUJSJnjQ 



JIIUJ^J 



ft 



8 8 c-~ - 



e* 



cxexx 



u 

s. 
& 



W 



8 8 c 



10 O to to O to 



OiO 

TN 



w 

tOlOtOtOO'OtOO OO Qto 

- 



- 

toO QtOOtO 



put 



suopony 



SJ33UOIJDn- v - 



OOtOiOOfiO O r- O OOOr-tO 

c ~ 



: : ' ~Z c : : s 

: * ^-s u^ 

~ 5 w u 

rt --^ *s a.--^ 3 

u > C c' ^ <-i 

5pmXn>fac/2. 



. .*& 

g-e 
o J2 









3 w. .c <u .>uca 
CQCQUQQWWWfcO 



397] 



LICENSES AND POLICE FINES 



37 



J38U3AE3S 



O O fO O O lr > 
10 N 



O 10 O 



jjun 



jo cc o 



(ssp is i 



jonbi 



8 8 
" 



(aid JJuiAoui) 



S3-UBOIU 



>tuu 



O 

O 



O 

IO 



spueis 



-o 

N 



s.) 1-1. 
guijooqs 



c. 
X. 

I 



g, c c 



S31BOS 



SJ.HIUll}] 



B 

' 



tooj 



IO _ rt O 

XO >O 10 10 1 10 O to O tO"-i 

WWM^SN >* M fi 1 1 

-N -i O tO 



__ 
lOCO l/5 '7 l OtOO>O 

~ O 1- - 

MM 



w 
J 

2: 
< 
h 



(JOOJ) 
"WIPP'd 



-o-o -o-o T3 E E 

C C C ">0 N B - "5 O C ^ 



(U03EM) 



E 





5 



: : c -o 



38 MUNICIPAL REVENUES IN ILLINOIS [398 

Whether a heavy license should be imposed upon the 
baggage and express business is questionable. The in- 
dustry makes special use of the city streets, for which 
payment may be expected; at the same time it serves as a 
refuge for a class of broken down men who frequently earn 
only a bare livelihood. 

A heavy license tax on billiard and pool tables and 
upon bowling alleys is a profitable source of revenue. A 
number of cities charge only $5 per table, while in Danville 
the tax falls as low as $2.50 per table, the annual income 
being only a trifle over $300. Evanston, Joliet and Peoria 
charge large sums for the privilege of conducting these 
businesses, a practice, which, while it gives a monopoly to 
a few places, makes collection easy. Only a quarter of the 
cities charge more than $5.00 per table which sum with a 
view to revenue is too small. 

On bowling alleys the prevailing licenses are $10 and 
$15 per alley, altho in Freeport the charge is as low as 
$5 per year. Where a charge is made for the business 
rather than by the alley, the rates are much lower. In 
Evanston such charge is $200, but the next highest rate is 
$25, which prevails in three cities. In two other munici- 
palities the business rate falls as low as $10. 

The druggist license is usually a small fee for permis- 
sion to sell liquor, presumably for medicinal purposes, al- 
tho this restriction is notoriously violated. The predom- 
inating license rates are $15 and $25 dollars per year. In 
two instances, however, it is $5.00 and in one case only one 
dollar. In Bloomington there is an occupational tax of 

FOOTNOTES TO TABLE 7. 

f Sale forbidden, but 'Circus bill posters $5.00 per day. 

ordinance not enforced. *not now enforced, 

n no data. T Fee only. 

x taxed under other classification. 'Occupational tax on all pharmacists. 

a larger sum for first table, 'Not enforced. 

smaller for each add. 10 Any place where milk is sold, 

y year. "$2.50 per 100 scale tickets, which 
d day. sell for $10. 

w week. M Per wagon, 

m month. M An initial franchise tax. 

J A blank means not taxed. "Grade one. 

2 By other than auctioneer. "On city property. 

Total business. "$10.00 per wagon additional. 
4 Per table unless otherwise designated. 



399] LICENSES AND POLICE FINES 39 

flO.OO per year upon all pharmacists. On the whole the 
drug license is widely used and generally collected, but is 
not as large as the nature of the drug business justifies. 

Pawn shops, junk and second hand stores form a class 
by themselves, the licensing of which is largely a police 
measure. Pawn shops require an amount of police super- 
vision and the rate of taxation is necessarily high in order 
to limit the number. Junk shops are licensed with a 
view to police regulation, but the object would perhaps be 
better secured by extending the licensing to the wagons 
used in collection rather than upon the warehouses, and 
there would result an increase of revenue. 

Theatres are perhaps the most unevenly taxed busi- 
ness of the group, the license rate in cities of the same size 
ranging from $25 to $150. The predominant rate is from 
$50 to $100, altho six cities charge more than this latter 
figure. The moving picture show is highly taxed in most 
localities, the business being supposedly profitable and re- 
quiring increased fire protection. 

Brewers, brewery agents and wholesale liquor dealers 
are not as extensively or as heavily levied upon as the 
nature of their business would seem to justify. Since 
retail liquor dealers are taxed from $500 to $1200, it ap- 
pears but reasonable that wholesale dealers should con- 
tribute more than $25, as" is the case in Rock Island and 
Quincy. Also if a business is of such a nature that it is 
taxed $300 per year in one city, it is questionable if it 
should be exempt from taxation in others. 

Itinerant merchants, licensed, in some cities, from $25 
to $100 per month, are in other cities escaping with less 
than a reasonable charge. It cannot be said that their 
presence promotes a healthy growth of home industries; or 
is entirely lacking in the need of police supervision; nor 
are they subject to the general property tax. Perhaps in 
this instance a much higher license than that which the 
municipalities are assessing would be expedient upon the 
grounds both of revenue and of public policy. 

Milk wagons in all but seven of the cities pay a nom- 



40 MUNICIPAL REVENUES IN ILLINOIS [400 

inal fee to facilitate inspection. In two instances, Peoria 
and Rock Island, the licenses apply to all places where 
milk is sold. The usual rate is $5 per year, tho it is as high 
as $15 in Alton, and falls to $1 in Freeport and Rockford. 
The total revenue is not large, but should be sufficient to 
cover the costs of inspections and testing. 

The high cigarette license tax is normally imposed with 
a view to decreasing the sales. It usually results in giving 
a single merchant a cigarette monopoly, as was originally 
true in Rockford ; or for several dealers to take out licenses 
at a loss, in which case the tax is really one upon the 
retail tobacco business. Or a large tax may prevent any 
dealer taking a license, in which case the ordinance is 
widely violated. This situation was found in both Ottawa 
and Rockford. A more reasonable license than that now 
imposed in the five cities licensing the sale of cigarettes, 
possibly $50 per year, would prevent the indiscriminate 
sale by small dealers and grocers, and would materially re- 
duce or eliminate evasions of the law by tobacco dealers. 
The result would be a $50 tax on the retail tobacco business, 
tho it would have the appearance of an optional payment. 

In addition to the licenses enumerated in table 7 there 
are numerous others which are operative in only a few 
cities. A complete list would include striking machines 
at $1 and $10 a day in Aurora and Urbana respectively; 
ice cream wagons, $5 in Belleville; street cars in several 
cities; 20 solicitors for merchants, at $50 in East St. Louis; 
mechanical clocks at $2.50 in Aurora ; distilled water deal- 
ers, $5 in Evanston; awning manufacturers, $25 in Joliet 
and Peoria, or at $10 when more than one person shall be 
engaged in the business; keepers of gunpowder, $3 in 
Galesburg; and the penny arcades in several municipalities, 
either by specific designation or under the classification of 
general amusements. 

Cities are also permitted to examine and license 
plumbers, the fee being $50 for master plumbers, and $1 

"See Public Service Privileges, ch. IV. 



401] LICENSES AND POLICE FINES 41 

for journeymen; and to renew the same annually for $10 
and $2 respectively. 21 In Rockford examination and re- 
newals returned $481, or $449 net, which "as has always 
been the custom was divided equally among the three 
members of the board". 22 Electricians pay an annual 
license of $5 in Peoria, the total income from this tax being 
$501. Aside from these mentioned, and single instances 
of a tax on bakers and pharmacists, occupational licensing 
has made little progress in the cities of Illinois. 

The business of plumbing pays $10 license in Decatur, 
Ottawa, LaSalle, Bloornington, and $20 in Moline. Drain 
layers are licensed at $10 in Kockford and Peoria. 

Business Taxes. 

It is not always easy to distinguish between the ob- 
jects of business taxation and general licensing tho it is 
desirable to discuss them separately. Certain trades, as 
druggists, pawnbrokers, second hand dealers, junk shops, 
etc., have been long subject to licensing and by nature 
seem to invite public supervision. On the other 
hand, other businesses have no special characteristics 
which justify licensing and taxation unless such taxes are 
imposed on all. Licensing within this group is justified 
only by the requirement of revenue, and the desirability 
of an easily assessed and collected tax. 

The statutes are sufficiently broad to permit the licens- 
ing of almost any business which the city authorities may 
think necessary, 23 yet the practice of business taxation 
has been extended in only a limited radius from East St. 
Louis. This city apparently borrowed the practice from 
its Missouri namesake. Table 8 is an exhibit of the rates 
of business taxes and the total amounts received by each 
city from this source for the year 1909. East St. Louis, 
Springfield, Belleville, and Alton are the only municipali- 
ties receiving a considerable revenue from this source, 

"Laws of 1909, p. 132. 

"Annual Report of Rockford, 1909, p. 88. 

*Rev. Stat. ch. 24, par. 62, item 95 el seg. 



42 



MUNICIPAL SEVENTIES IN ILLINOIS 



[402 



although several other cities license an occasional trade. 
The most productive license is that on butcher shops, which 
in Alton paid $1988 during 1909. In the same city, livery 
stables and lumber yards contributed $125 for each class, 
and restaurants $282. 

In Belleville the most important of the business taxes 
was that upon vendors of provisions, the return being $720. 
Vendors of bread, fruit, etc., paid $355 ; real estate brokers 
paid $337; and livery stables, $100. In East St. Louis 

TABLE 8. 
BUSINESS TAXES, RATES AND TOTAL INCOME, 1909. 





| 
< 


JU 

~ 

pa 


9 
O 
nJ 

c/) 

w 


Evanston 


t> 

"o 




*c 

o 




o 
c 
J2 

"en 

t i 



O 

& 


T3 

"3 

1C 

bo 

C 

o. 
in 


Awning man'f'g 










$ 25 


$ 25 






Bakeries 




$10 


$ 25 






5 1 






Brokers, general 
Brokers, real estate . . 
Coal dealers 




25 


200 

25 
25 










$ 25 
25 

10 


Fire works, retail.... 
Fire works, wholesale 
Groceries 




10 


25 










3 
IS 


Hay and grain 






25 












Ice dealers 








$5* 


IO J 


to*" 




10 


Hotels 
















15 


Livery stables 


$ 25 


25 


50 


2.50* 








25 


Lumber yards 


$ 25 




50 


25 








50 


Meats, retail 


TOO 


IO 


SO 4 








5 


25 


Meats, wholesale 
Restaurants 


IO 




15 


2 








IOO 

15 


Storegoods 




IO 


25 












Undertakers 










IO 






IO 




















Total income 


$2^2O 


$2368 


$14611 


No 


$ 185 


$ 176 


$ 135 


$77157 










Data 











'Per person. 
"Per wagon. 
'Per rig. 



4 Now $25. 
'Not enforced. 



403] LICENSES AND POLICE FINES 43 

butcher shops paid $5100 ; grocery stores, $4408 ; "vendors 
of store goods", $1387; coal and ice dealers, $895; real 
estate brokers, $719 ; and hay and grain dealers, $268. The 
remaining business licenses in the city produce less than 
$250 each. Meat dealers are the most important contrib- 
utors to the business tax fund in Springfield, retail dealers 
paying $1417, and wholesale dealers $908. Lumber yards 
are next in rank, contributing $305 ; restaurants pay $250 ; 
lunch rooms, $248; and real estate brokers, $168. The re- 
maining businesses pay less than $100 each. 

The other cities enumerated in Table 8 cannot be said 
to practice business licensing for revenue purposes. In 
Evanston only lumber yards are taxed sufficiently to pro- 
duce a reasonable revenue, the other business taxes ap- 
pearing to be of a regulatory nature. The license of awn- 
ing manufacturers in Joliet and Peoria is unimportant, 
and the tax on ice wagons is apparently regulatory. 

In this connection attention may be called to the $2 
tax on restaurants in Evanston ; and a similar license pro- 
posed in Urbana. Both of these cities forbid the licensing 
of saloons and consequently have found it necessary to 
extend police supervision to restaurants to prevent the 
illicit sale of liquor. 

The four cities which have extensively adopted busi- 
ness taxation find it a profitable source of revenue. Its 
general introduction, however, would probably meet with 
such opposition as to make wide adoption impossible. 

Vehicle Licenses. 

A recent amendment to the general incorporation act 
for cities provides that municipalities may "direct, license 
and control all wagons and other vehicles conveying loads 
within the city, or any particular class of such wagons and 
other vehicles, and prescribe the width of tires of the same, 
the license fee when collected to be kept in a separate fund 
and used only for paying the costs and expense of street and 
alley repair". 24 

"Rev. Stat. (1908), ch. 24, par. 62, item 96. 



44 



MUNICIPAL REVENUES IN ILLINOIS 



[404 



Eight out of the twenty-four cities under discussion 
have placed upon vehicle owners part of the cost of repair- 
ing streets which are built entirely by the property owners. 
Ordinances establishing vehicle licenses meet with con- 
siderable opposition and have been considered unfavorably 
in at least three cities, Decatur, Rockford and Springfield. 

TABLE 9. 
VEHICLE LICENSES, RATES AND TOTAL INCOME, 1909. 





4> 

in 


N 
<V 
m 
LI 


orses 


in 
D 

in 





sn 

JH 


IS 


H 

O 


1 






tt 


O 


<-] 


O 


o 


<O 


o 




o 






O 


.c 




r*] 




O 












M 




&> 




* J .n 


C 


~ <L> 


I 


u 


g 






o 


o 


L 





C *-*4 

o ^ 


B ^ 





2 


O 




C 

O 


H 


43 

H 


O 


3 
S S 


I 


3 

< "0 


3 







c 


Alton 


$2 


$ 2-5 


$5 


$ S 


$ 5 


$10 


$ 10 


$ 10 


$ 


$ 516 


Aurora 


















I 




Belleville .. 


5 


5 


5 


5 


5 


5 


5 


5 




483 


Decatur .... 












5 


5 


5 






E. St. Louis' 


7-50 


IO 


12.50 


15 












7169 


Evanston . . 


3 


5 


10 


IS 


20 


I2 1 


20 


30 


3 


8065 


Jacks'nville 


2-3* 


4-10 


10 


10 


IO 


10 


IO 


IO 




2368 


Moline 5 


I 


2* 


3 


4 




5 


10 


15 


2 


800' 


Quincy 


I 


2 








7-50 


IO-I5 4 




2 


3401 



1 Driver also licensed. 

2 Based upon number of horses and weight of wagon. 

"Delivery wagons, $7.50. 

4 Six or more passengers. 

"1911. 

"Furniture, baggage, and express wagons, $25. 

The ordinances which have been passed indicate no uniform- 
ity as to what is regarded as a reasonable tax on vehicles. 
The minimum is in Moline where the charges are $1 per 
horse, with a uniform charge of $7.50 for delivery wagons. 
In East St. Louis the minimum charge is $7.50 for one 
horse vehicles with an increase of $2.50 for each additional 
horse. In Jacksonville the tax is based upon a combina- 
tion of the number of horses and weight of the vehicle. 
The intention was to charge light delivery wagons $4, and 
the maximum weight of vehicles at $3 a year was placed at 



405] LICENSES AND POLICE FINES 45 

750 pounds. The result was to place most delivery wagons 
in the three dollar class. Perhaps such a scheme of gradu- 
ating the tax by the weight of the vehicle is commendable 
if proportionate depreciation on pavements is to be con- 
sidered, but it lacks much in simplicity of collection. 

It has been impossible to separate the revenue returns 
from the licensing of automobiles from that of other ve- 
hicles, tho doubtless the former contribute the larger 
share. It is conceded that automobiles cause a considerable 
destruction of streets and they have been taxed accord- 
ingly. The minimum charge is $5 per car, and the tendency 
is to increase the rate to ten dollars for other than runa- 
bouts, and one city adds the class of six-passenger cars. 
The result of the high charges in Evanston is seen in the 
large amount of revenue derived from the vehicle tax. 
Perhaps $20 per car would be considered large in the aver- 
age city, but it should be remembered that the ownership 
of an automobile is, or should be, indicative of an ability to 
bear taxation. In addition to the charge on machines, 
Evanston examines and licenses automobile drivers, the 
examination being made by the commissioner of public 
works. The initial charge is $3, the license being renew- 
able annually for $1. 

The motorcycle license has been adopted by four cities 
and is more of a police than a revenue measure, justified 
by the large increase in the number of machines and the 
public danger arising from their use. 

FOREIGN FIRE INSURANCE TAX. 

Fire insurance companies which are not incorporated 
under the laws of the state of Illinois are required to pay 
into the treasuries of the municipalities in which they 
operate, not to exceed two percent of the gross receipts 
from insurance in force within the city limits. The disposal 
of this fund has already been mentioned, and comment 
concerning it will be confined to the manner of collection. 



46 MUNICIPAL REVENUES IN ILLINOIS [406 

Table 10 is a statement of the income of each city 
from this source. In this instance, where one would antici- 
pate almost uniformity in the percapita collections, there 
is a large variation in the income, the lowest being $.017 
per person in East St. Louis, and the highest $.11 or six 
times that amount, in Peoria. 

TABLE 10. 
TOTAL AND PER CAPITA INCOME FROM THE FOREIGN FIRE INSURANCE 

TAX., 1909. 

City Total Per City Total Per 

Amt. Cap. Amt. Cap. 

Alton $1488 $.085 Jacksonville ... $1348 $.088 

Aurora 1636 .055 Joliet 1984 .057 

Belleville 662 .025 LaSalle 739 .064 

Bloomington . . 1093 .041 Moline 1415 .58 

Champaign 1124 .09 Ottawa 912 .095 

Danville 1672 .06 Peoria 7369 .11 

Decatur 3102 .10 Quincy 1 

E. St. Louis . . . 1200 .017 Rockford 2248 .049 

Elgin 1 1 21 .043 Rock Island . . . 1838 .074 

Evanston ..... 1472 .059 Springfield 1729 .034 

Freeport 1061 .06 Streator 1 159 .081 

Galesburg 1579 .069 Urbana 327 .04 

*Annual reports for 1907 and 1909 make no mention of this tax. May 
be included in "general licenses". 

In some instances, as in East St. Louis, city officials 
frankly admitted that the collection of the tax had not 
been pressed. By special action of the city council in Ot- 
tawa in 1909 suit was commenced in the justice court 
against fifty-six delinquent companies, resulting in a pay- 
ment of $863. Rockford, to facilitate the collection of this 
tax, requires that each insurance broker take out an annual 
license, the charge being $1. At the time of issuing this 
license, an affidavit may be required of the foreign insur- 
ance business which the firm has written during the past 
year. 

From the figures it appears that the normal collection 
in each city should fall between four and eight cents per 
person, and nearer the latter figure than the former. Yet 



407] LICENSES AND POLICE FINES 47 

five cities fall below the minimum figure suggested and 
seventeen below the maximum. The insurance tax will 
furnish one of the largest incidental revenues to which the 
cities have access, if means are found to compel its pay- 
ment. 

POLICE FINES. 

The police and local courts are not important for their 
contribution to city revenues since the maximum in any 
city amounts to only 4,12% of the whole, while the average 
is about 1%. ( See Table 31) . In Freeport the contribution 
of the police department is 4.72% of the whole city income, 
while in Moline it falls to .236%. It is rather for its wide 
variation of return that this branch of the municipal reve- 
nue deserves attention. The public safety is the one de- 
partment of city activity where administration is fashioned 
after that of a quarter of a century ago and is still beset 
with fees, charges, perquisites, and not infrequently ignor- 
ance. 

A prisoner from the moment of his arrest is in the 
grasp of a system of charges, a fee for the officer who 
makes the detention, a fee for the prosecuting attorney, 
costs for the judge and jury, and a fine for the city. And 
the more important of these charges are dependent upon 
the option of those whose function it is to assess them. In 
one municipality a city warrant cannot be secured after 
nine o'clock in the morning, if the case is one in which 
either a state or city warrant may be issued. A city war- 
rant would give the fine to the city ; a state warrant gives 
nothing to the city and permits a larger fee to the magis- 
trate. If there have been a series of state cases where no 
cash fines have accrued, these will be made up by means 
of a heavy fine assessed against the next offender who can 
pay. 25 The minimum charge assessed in a city case would 

"State cases may suffer by the State's attorney receiving fines in the 
cases he prosecutes. For example the statutes provide that game wardens 
shall receive one-half of the fines in cases apprehended by them. One 
State's attorney refused to sanction such a loss to his income with the 
result that game law enforcement was at a stand still. 



48 MUNICIPAL REVENUES IN ILLINOIS [408 

be a $1.00 fine, plus f 1.80 costs. In a state case this would 
be $3.05 plus in many cases a minimum attorney's fee of 
$5.00. In simpler words, in one city of the state the penalty 
of a crime may be magnified four times if the arrest is 
made after nine o'clock in the morning. Under such a 
system the possibilities of connivance between the magis- 
trate and the prosecuting attorney is apparent. 

In Quincy, state cases amount to only 7.5% of those 
tried; in Rockford they are 20% ; Bloomington 27% ; Rock 
Island 37.5% and Moline 45%. It is impossible to believe 
that serious crime is six times more prevalent in this latter 
city than in Quincy. In one municipality the chief of po- 
lice in his attempt to obtain equity for the city by having 
as many prisoners as possible fined in the municipal court, 
brought upon himself the wrath of the politicians in such 
a measure that he gave up the task. To quote his own 
words, "I had to come off second best". There are at least 
several solutions for this problem, the most practical being 
to place the prosecuting attorney upon a salary basis. 26 
Tho the fines under this system are still lost to the city, 
the surplus over the salary will be turned in to the county 
school fund. In Rock Island, in 1908, over $2,000 was se- 
cured for education in this fashion. Another remedy in- 
volves the more difficult task of taking the police out of 
politics. 

Justices of the peace have long been notorious as 
dispensers of justice of a sort which in Chicago brought 
upon them the approbrium of "justice shops". These of- 
ficers in that city have now been abolished in favor of the 
municipal court. The evils of political justices need no 
recital, yet one city, East St. Louis, with over ten thousand 
arrests per year, retains the system. Each morning the 
culprits of the last twenty-four hours are religiously di- 
vided among the city magistrate and a half a dozen jus- 
tices of the peace. In other cities the city cases tried be- 
fore the justices of the peace are almost none, 15 of 1019 
in Quincy, 1 of 1507 in Rockford. 

"Rev. Stat. Ch. 53, par. 8a. 



409] LICENSES AND POLICE FINES 49 

A reference to Table 31 in the chapter on Conclusions 
will show the proportion of each city's revenues which is 
contributed by the police department. This, however, is 
scarcely a just method of comparison, since the importance 
of smaller sums is lost in the larger ones arising from other 
sources. Also, both the opportunities for, and the policy 
of, arresting is different in each locality. In "dry" com- 
munities persons intoxicated are usually apprehended on 
sight, while in others, not until they become decidedly 
offensive. 

That the number of saloons directly influences the 
number of arrests, and hence the police income, is shown 
both by the size of the police forces and the population per 
arrest in the different cities. In the five no-license 
cities the average number of persons per police officer is 
1566 ; for the remaining cities there is an average popula- 
tion of 1168 for each officer. Table 13 also indicates that 
there is some correlation between the population per sa- 
loon and the population per police officer. This relation 
holds true in all but a few instances. 

While the presence or absence of saloons affects de- 
cidedly the number of men required to maintain order, and 
may increase the number of arrests in an individual city, 
on the whole the influence of the liquor traffic is not as 
marked as might be expected, for the reasons already 
stated. In cities having one annual arrest to twenty or 
more inhabitants, there is a saloon for an average of 413 
persons; while in cities making one arrest for less than 
twenty inhabitants, there is a saloon for each 350 persons. 
While the former group contains five no-license cities, it 
also includes LaSalle, which has the largest pro rata of 
saloons of any city studied. Frequency of arrest is hardly 
a mark of good order in a city, or a criterion of an efficient 
police force. A large income from police sources may indi- 
cate that undesirable and unlawful businesses are allowed 
to play their trades thru the payment of fines as tribute. 

Perhaps a more satisfactory method of judging police 
revenue would be a comparison of the income per arrest 



50 MUNICIPAL REVENUES IN ILLINOIS [410 

in the several cities. This sum ranges from nothing in 
Joliet and twelve cents in East St. Louis, to $5.51 in Free- 
port. The method of collection in East St. Louis has been 
commented upon, and furnishes some explanation for so 
small a return. On the other hand, Alton, Aurora and 
Jacksonville must be excluded for purposes of actual com- 
parison since their magistrates are recompensed by salaries 
rather than by fees. 

Aside from the factors of number of arrests, and pay- 
ment of police judges, there remain two others which influ- 
ence municipal incomes from police departments, the dis- 
position of the cases presented to the magistrates and of 
the fees and fines assessed. Owing to the meagerness of 
city reports and the lack of accessible records in the police 
departments there is a limited amount of information upon 
both of these subjects. It has been impossible to obtain 
even the number of arrests in LaSalle and Springfield, and 
in this latter city the desk sergeant professed complete 
ignorance of the number of merchant's police, with whom 
his department presumably co-operates. 

The disposal of persons arrested as reported in five 
cities may be sufficient to show the general tendency and is 
as follows : 

TABLE n. 
DISPOSAL OF ARRESTS IN FIVE ILLINOIS CITIES, 1909. 

Evanston. Ottawa. Peoria. Quincy. Rockford. 

Total No. arrests 734 425 4383 1019 1507 

Fines paid in court 410 64 1218 399 338 

Cases continued 8 9 1218 9 135 

Held to other courts or 

grand jury 28 1 1 277 92 106 

Settled out of court 22 40 3 155 

Discharged on payment of 

costs 79 25 

Served in jail 22 66 531 173 266 

Discharged 158 273 2103 145 542 

Otherwise disposed of 7 2 109 173 5 

Expressed in relation to the total number of arrests 
this table becomes: 



411] LICENSES AND POLICE FINES 51 

TABLE 12. 
DISPOSAL OF ARRESTS IN ILLINOIS CITIES, BY PERCENTAGES. 

Evanston. Ottawa. Peoria. Quincy. Rockford. 

City Income per arrest $4.84 $1.40 $1.36 $4.03 $ .82 

Total no. of arrests 100% 100% 100% 100% 100% 

Fines paid in court 55. 15. 27.8 39.2 22.2 

Cases continued .09 2.1 .018 .884 8.95 

Held to other courts or 

grand jury 3.87 2.6 6.34 9.1 6.7 

Settled out of court 3.8 ... .92 .294 10.25 

Discharged on payment of 

costs 10.8 ... ... 2.45 

Served in jail 3.8 15.5 12.1 17. 17.2 

Discharged 21. 64.4 48. 14.2 35.8 

Otherwise disposed of 955 .02 2.5 17. .035 

In Evanston and Quincy the income per arrest is af- 
fected in one instance by the presence of a salaried judge 
and in the other by heavy automobile speeding fines; but 
from the remaining cases it appears that there is no causal 
relation between the disposal of cases and income. Ottawa, 
which fines only 15% of those arrested receives a per 
arrest income of $1.40, while Peoria with almost double 
the percentage of fines receives a few cents less. 

The most striking feature of the table is the small per- 
centage of the cases which yield a return to the municipali- 
ties. On an average less than one-third of the arrests are 
fined in court, while considerably more than this are dis- 
charged, dismissed, have fines suspended, or are disposed 
of in a fashion which would indicate that the charges are 
not serious or are unsubstantiated. Yet another third 
remains within the grasp of the law, but the prosecution 
does not bring an income to the city. 

Concerning the relation of costs to fines imposed, only 
five cities report other than the final amount turned into 
the city treasury. No two of these municipalities report 
in a fashion sufficiently similar that their reports may 
be tabulated. 

In Aurora the total amount of fines and costs assessed 
was |3,732.70 for the year 1909. Of this sum, |288 or 6% 



52 MUNICIPAL REVENUES IN ILLINOIS [412 

was paid out as witness fees; $1251 or 33% was accounted 
for by labor, confinement, suspension of fines, etc., leaving 
$2273.30 or 61% to be paid to the city attorney. Reports 
of both clerk and treasurer, however, show that only 
$1976.45 was received by the city during the year, or 53% 
of the amount assessed. Against this the city appropriated 
$1124.50 to the police magistrate and $1250 as salary to the 
judge of the city court, which sums are about $400 in 
excess of the income from police sources. 

The amount of fines assessed in Bloomington, for the 
year 1909 was $7214.20, of which $3538.50 or 49% was 
fines, $2766.70 or 38% was magistrates' costs, and $913 or 
13% was police costs. Of the total amount asssessed, 
$2805.83 or 39% was not collected or was offset by con- 
finement ; $2762.70 or 38% went to the magistrate as fees, 
leaving $1645.67 or 23% to the city treasury. 

The Eockford report is for a period of six months 
only, and shows $3907.30 assessed, of which $2859.50 or 
73% was as fines and $1047.80 or 27% was as costs. This 
may be compared with 49% and 51% for these respective 
items in Bloomington. Of the total amount assessed in 
Rockford, $2713.85 or 69.5% went uncollected; $410.40 
or 10.5% was collected as costs, while the share of the city 
was $783.05 or 20%. 

The total amount of fines and costs in Peoria for the 
year 1909 was $19,545.40, of which $10,933 or 57% was 
accounted for by imprisonment, appeals, outstanding or 
suspended fines. The magistrate collected $8612.40 of 
which he turned $5052.10 or 26% of the total amount im- 
posed into the city treasury. In Streator $2,580.94 was 
imposed as fines, of which $1258.46 or 48% was served, 
worked out, or dismissed; while $1280.94, or 52% was 
collected. 

It is of interest to note, that with the exception of 
the last named city and Aurora, the share of the munici- 
palities in the amount imposed did not have a variation of 
more than 6% of the total, being 20% in Rockford, 23% 
in Bloomington and 26% in Peoria. Yet the sum which 



413] . LICENSES AND POLICE FINES 53 

was uncollected was extremely variable, 33% in Aurora, 
39% in Bloomington, 48% in Streator, 57% in Peoria, and 
70% in Rockford. 

Thus to the causes already given for the smallness 
of city returns from fines, may be added those of laxity 
in fining and in the collection of fines by magistrates; in 
some cases the rather large stipends which go to the 
magistrates in the form of fees; and finally the large 
amount of arrests which fail to come within the jurisdic- 
tion of the city courts. While the police are for 
protection and not for revenue, at the same time cities are 
entitled to intelligent annual reports from chiefs of police 
and magistrates which will show the disposal of cases, and 
the amount of fines and costs, assessed and collected. 



54 



MUNICIPAL REVENUES IN ILLINOIS 



[414 



TABLE 13. 
STATISTICS ON STRENGTH OF POLICE FORCE, NUMBER OF ARRESTS, ETC., 1909. 



\ 


Amount to 
Treasury 


Number of 
Arrests 


Number on 
Police Force 


V 

a v 

O <U 

W, 

< 
u 

;- <LI 
U Q. 


No. of Arrests 
per Officer 


Population 
per Arrest 


Is 

! 

o- . 

&l 


% of Force re- 
quired by law 


Alton 


$ 1657 


35 


17 


$4-73 


20 


5o 


IO"?O 


IOO 


Aurora 


1976 


849 


22 


2.32 


38 


14. 


1355 


76 


Belleville 


560 


4^8 


i? 


I. OS 


20 


50 


140^ 


71 


Bloomington 
Champaign 


1,702 
no data 


I3SI 
no data 


36 
8 


1.26 


37 


19 


715 

1550 


144 

66* 


Danville 


7.041 


3655 


45 


1 .92 


81 


7 


6. 19 


166 


Decatur 


5,391 


2601 


27 


2.07 


96 


12 


1160 


87 


E St. Louis 


I.2IQ 


10,000 


75 


.12 


m 


7 


780 


128 


Elgin 


683 


642 


19 


1. 06 


w 


40 


1365 


73 


Evanston 


^.2OV 


714 


20 


4.48 


25 


25 


860 


116* 


Freeport 


4.43T 


804 


12 


5-51 


67 


22 


1465 


70 


Galesburg 


*,IO2 


837 


12 


3.70 


69 


27 


1840 


55* 


Jacksonville 


1,836 


4TI 


8 


4.26 


54 


35 


1910 


53* 


Joliet 


None* 


1836 


39 


None 


47 


19 


895 


115 


LaSalle 


412* 


1OO 5 


o 


i. 40* 


30 8 


33* 


1280 


122 


Moline 


4l6 


022 


10 


45 7 


48 


26 


1273 


79 


Ottawa 


40 $ 


425 


5 


1.40 


85 


26 


1907 


45 


Peoria 


eo8? 


4"?8^ 


05 


1.36 


46 


1C 


7OT 


T/J/l 


Quincv . 


4,io6 3 


IOIQ 


14. 


4. 02 


TO 


35 


107"? 


94 


Rockford 


1,249 


1515 


36 


.82 


'I 2 


29 


I26o 


80 


Rock Island 


1.^64 


IOW 


2O 


3.18 


52 


24 


1216 


77 


Springfield 


?,8oo 


4 


56 








92O 


no 


Streator 


041 


206 


M 


3.18 


22 


5"? 


IIOO 


03 


Urbana . 


328 


ifo 


4 


2.OI 


4O 


50 


2o6l 


50* 



'$1832 of this is auto fines. Average return from these $22.58. 
2 So stated by the Clerk in answer to direct question. No such item 
in report of clerk or treasurer. No explanation offered. 
8 Salary to Judge. 
'See Text, p. 50. 
"Estimated from trial cases. 
"Estimated. 

'Salary limited to $600. 
*No license. 



CHAPTER III 
GIFTS, GRANTS AND SUBVENTIONS. 

SCHOOL REVENUES. 

The most important item of revenue within the group 
of gifts, grants and subventions is the state grants to 
schools. For purposes of convenience the data in relation 
to school revenues will be considered together. Table 14 
is an exhibit of the sums received by the school district or 
districts in which the cities named are located. The cities 
and the school districts are seldom exactly coextensive; 
but the consequent lack of correspondence in the statistics 
is neither large nor important. 

State Grants. 

Each county is paid its proportionate share of the 
state school tax, upon the basis of inhabitants under 
twenty-one years of age. To this is added a share of the in- 
come from the sale of public lands within the state, plus 
a portion of the interest on the surplus of national revenue 
distributed to the states in 1837. Warrants for the share 
of each county in this fund are issued to the county super- 
intendents of schools who present them to the county treas- 
urers for payment. These warrants are turned over to the 
state and apply as cash on the county share of the state 
school taxes. The county superintendents distribute the 
funds to the superintendents of the school districts. 

It is quite possible that the amounts returned to the 
cities are not as large as the sums collected in state taxes 
for these purposes; but the exact situation could only be 
shown by a detailed comparison of city and country wealth 
and population. 

55 



56 



MUNICIPAL REVENUES IN ILLINOIS 



[416 



TABLE 14. 
REVENUES OF SPECIFIED CITY SCHOOL DISTRICTS.* 





c 
C 

O 

Si 

rt 

C/3 


Tuition 


tO 

<u 
X 
rt 
H 


Endowment 
Income 


Other Income 


Total Income 


Amount of 
Endowment 


Alton 


$3391 


$ 1837 


$ 82,27 5 


$ 200 




$ 87, =503 


$4000 


Aurora 


4870 


1622 


113,198 






119,690 




Belleville 


2277 


396 


78,740 




53 


81,467 




Bloomington .... 
Champaign 


4406 
923 


1037 
ii 


123,319 
69,346 


320 


1810 


130,572 
70,600 


6400 


E. St. Louis 
Elgin 


6942 
2872 


763 
497 


255,029 
147,852 




506 
4 2 


263,241 
151,263 




Freeport 


1592 


979 


86,318 




1307 


90,133 




Galesburg , 


3I3 5 ; 


2010 


77,OOO 


200 




82,345 


no data 


Jacksonville 
Joliet 


2403 

7310 


1361 

223 


82,OOO 
IQ7.OOO 






85,764 
204,132 




Moline 


2885 


584 


135,000 




202 


138,670 




Ottawa 


1796 


"M 


40,403 




95 


42,339 




Peoria 


IO.9IO 


608 




6939 


2752 


400,600 


no data 


Rockford 


6118 


3243 


182,908 




541 


192,811 




Rock Island 
Springfield 


3402 
7562 


973 

1739 


114,803 
275,OOO 




1329 
56 


129,106 

2 84,357 




Urbana . 


I70O 


800 


54,000 






56,590 





*No data for Danville, Decatur, Evanston, LaSalle, Quincy, and 
Streator. 

2 Amount extended. 

Endowment Income. 

Income from endowments are found in only four of the 
cities considered, and is an inconsiderable sum in all but 
one of these. Peoria has such an income of nearly $7000. 
The source of these endowments are funds distributed by 
the state to the local districts. Only in exceptional in- 
stances are these monies preserved intact, the income to be 
paid annually to the district entitled to it. 

\Tuition. 

Tuition is in its nature a commercial revenue but is 
mentioned here since it is desirable to consider school reve- 



417] GIFTS, GRANTS AND SUBVENTIONS 57 

niies as an entity. The sums received from this source 
range from almost nothing to over $3000 per year, in Rock- 
ford. Several school districts receive more than $1000 a 
year. The returns are naturally influenced by the presence 
or absence of a township high school, altho the tuition re- 
ceived from the grammar schools is not unimportant. 

Miscellaneous Income. 

The miscellaneous fund of the school districts needs no 
comment since it consists of practically the same revenues 
as does the similar fund in municipal budgets, rebated 
insurance premiums, receipts in error, etc. In addition, 
the school districts receive the fines imposed in the county 
for violations of other than city ordinances. 

GIFTS BY INDIVIDUALS. 

Nearly every city receives occasional donations of 
money or property of considerable value, usually for some 
designated purpose. The gifts for libraries and the reve- 
nue from library endowments are noted in chapter V. 
During the fiscal year 1909 several municipalities received 
gifts for other purposes, or the revenues from gifts of an 
earlier date. To Evanston was donated property for park 
purposes valued at $20,000, and a play ground valued at 
$12,000. Prior to this the city had received a park and 
museum valued at $40,000. Jacksonville was given $100 
as a special memorial fund; while Aurora received the 
income on $6500, to be used towards the establishment of 
an orphanage. 



CHAPTER IV 
REVENUES FOB SERVICES RENDERED. 

DEPARTMENTAL RECEIPTS. 

Table 15 is an exhibit of the collections of the several 
cities in 1909 from miscellaneous sources. The first col- 
umns state the receipts from fees and inspections, tho 
the returns lack absolute accuracy owing to frequent con- 

TABLE 15. 

RECEIPTS FROM FEES, INSPECTIONS, DEPARTMENT RECEIPTS, CHARGES AND 
OTHER MISCELLANEOUS SOURCES, 1909. 





<n 

<u 
<u 

b 


Inspections 


<S1 

*rt 

O 

H 


Charges 


Sale of Public 
Property 


Miscellaneous 


Alton 


none 


none 


none 


none 


none 


232 


Aurora 


none 


none 


none 


4 32Q 


none 


398 


Belleville 


1037 


none 


1037 


413 


none 


none 


Bloomington 


1 022 


1300 


2412 


22 =i6 


476 


3169 


Champaign 


117 


104 


221 


none 


none 


none 


Danville 


363 


none 


363 


none 


none 


46 


Decatur 


166 


1707 


1063 


853 


238 


none 


E. St. Louis 


2087 


1406 


3403 


266 


none 


none 


Elgin 


50 


128 


178 


90 


'H 1 


87 


Evanston 


2370 


1205 


3 : >7 c ; 


7583 


inclu'd 


2377 


Freeport 


none 


none 


none 


1223 


3817 


383 


Galesburg 


none 


no 


no 


13 


400 


602 


Jacksonville 


4=; 


none 


4; 


115 


none 


2115 


Joliet 


186 


107=5 


1261 


338 


1307 


none 


La Salle 


none 


none 


none 


2vt 


28 


none 


Moline 


none 


788 


788 


none 


none 


none 


Ottawa 


none 


343 


343 


none 


none 


1324 


Peoria . . . , 


272S 


1285 


4010 


3135 


1/4 


6=to 


Quincy 


none 


none 


none 


1 08 


1 37 1 


62 


Rock ford 


none 


1510 


1510 


389 


2O7 


15,172* 


Rock Island 


340 


1074 


1414 


none 


none 


5/1 


Streator 


none 


none 


none 


none 


114 


774 


Springfield 


TV14 1 


478 


2022 


388 


72 


no data 


Urbana 


none 


none 


none 


none 


none 


none 

















'Partially included in licenses. 
"Services other than for water 



rendered by water work dept. 
58 



419] REVENUES FROM SERVICES RENDERED 59 

fusion with departmental receipts, or inclusion in the mis- 
cellaneous fund. The table will, however, indicate the rela- 
tively large amounts which may be secured by a systematic 
collection of fees, impositions which incur small com- 
plaint, yet materially assist in the adequate enforcement 
of building ordinances, water charges, etc. 

Bloomington, East St. Louis, Evanston, Peoria and 
Springfield derive an income from fees which very nearly 
equals in amount that secured from general licenses. On 
the other hand seven cities fail to avail themselves of this 
means of income. 1 

Of the cities using fees extensively, Evanston may be 
cited as presenting the most effective system. 2 

'Some revenue from this source may be included in "miscellaneous 
returns" but if so it is of small amount. 

'Sewer permits $5.00 

Reconstruction and alterations 50 

Sidewalk permits 

Water permits 

One-half inch taps 5.00 

Five-eighths inch tap 6.00 

Three-fourths inch tap 8.00 

One inch taps 10.00 

Alterations $1.00 to 4.00 

Street permits 

Electrical construction permits 

New wiring 

Electric signs 

Line construction 

Building permits 

Brick residences 

Frame residences 

Alterations 

Commercial buildings 

Depots 

Sheds and barns 

Miscellaneous 

House movers permits 

One and one-half story frame 10.00 

Two story frame 20.00 

Moving in same block 2.00 

Electrical inspections 



60 MUNICIPAL REVENUES IN ILLINOIS [420 

There is a tendency to make the stipend of certain 
offices the amount of fees collected. In such cases, the 
total amounts collected are seldom included in the financial 
statements of the cities; and these are to that extent in- 
complete. 

Usually in compliance with an ordinance, the holders 
of fee offices render an annual report to the city clerk, stat- 
ing the amount of the collections, and surplus over the 
amount retained as remuneration. Barely, however, do 
these reports comply with the constitutional requirement 
that they be made semi-annually, and state the amounts 
received. 3 Table 16 is a partial list of the fee offices in 
some of the larger cities, indicating the extent to which 
fees are employed in the payment of officers, and the man- 
ner in which reports are made. 

TABLE 16. 

FEE OFFICES AND METHOD OF REPORTING. 
City. Office Income. Payments. Salary. 

Aurora Boiler Inspector No report for these officers in the 

Plumbing Inspector annual report. Statement of in- 
Oil Inspector spections but not of cash received. 

Bloomington . . . Oil Inspector 

Weigher No report for these officers in the 

Poundmaster annual report of the city. 

Ottawa Plumbing Board No report of cash taken in. 

Peoria City Collector No report published. 

Oil Inspector No report published. 

Boiler Inspector $1039 $103 $935 

Weights and Measures 

Inspector No report published. 

Exam. Electrician $ 501 $410 $ 90 

Exam. Elevator 
Operators $ 117 $ 51 $ 66 

Quincy Weights and Measures 

Inspector No report. 

Joliet City Collector } Extensive report published but no re- 

Oil Inspector fport of income. 

Rockford Plumbing Board $481 $ 39 $449 

'Const, of 1870. Art. 10, par. 13. 



421] REVENUES FROM SERVICES RENDERED 61 

Income from departmental charges and the sale of 
public property is offset by the cost of the services rendered 
or by the value of the property disposed of, and does not 
directly increase the spending power of the city. Among 
the most important charges made are those for openings 
in pavements, sale of crushed stone, meters, etc., altering 
water and sewer pipes, caring for prisoners of other dis- 
tricts; and the sale of junk and obsolete machinery. 

Miscellaneous receipts include in some instances fees, 
charges, and income from the sale of property, or portions 
of these funds. The major proportion of the receipts, 
however, consists of the odds and ends of city revenues, 
refunded insurance premiums, over-charges returned, cor- 
rected errors in the pay rolls, etc. None of these funds are 
open to increase except that which might arise from a more 
thoro reckoning of accounts receivable. 

SERVICE PRIVILEGES. 

Fourteen of the twenty-four cities here discussed re- 
ceive remuneration in some measure for public service 
franchises granted. No municipality taxes all of the fran- 
chises in force within it; and in all, only twenty-six fran- 
chises out of over one hundred and fifty, or about seventeen 
percent, yield payments to the grantors. Of this number, 
five are street railway privileges on which the tax is only 
from $5.00 to $25.00 per car in continuous operation, 
amounting with one exception to only a few hundred dol- 
lars per year. East St. Louis, however, receives $1600 
from this source. 

Nine of the franchise payments are based upon a per- 
centage of income, the lowest being one percent of the net 
city telephone receipts in Quincy, and the highest, five per- 
cent of the gross interurban receipts in Belleville. The 
predominant figure, which prevails in seven cases, is two 
percent of the gross receipts. In two of these instances it 
will become four percent after ten years of operation. Sim- 
ilarily, two of the telephone franchises pay on a revenue 



62 MUNICIPAL REVENUES IN ILLINOIS [422 

basis, that is, one dollar per telephone, which amounts 
roughly to five per cent of the gross income. 

Some of the utility companies pay a fixed sum ranging 
from $500 to $2000 per year. Such payments do not allow 
for the growth in value of the franchise and probably are 
not as large as would be realized by a percentage tax. 
For example, Bloomington (26,000 pop.) receives by a two 
percent tax upon the gross receipts of the street railway, 
$3400 ; Joliet (35,000 pop.) receives a cash payment of only 
$1000. Peoria (67,000 pop.), the largest city of the group, 
receives a fixed amount of $500 a year from the telephone 
company, a sum which is exceeded in all other cases except 
in one city, Alton. 

Three municipalities, Aurora, Joliet, and Rockford, 
have recognized the importance of franchises as a source of 
revenue by each assessing three or more utilities, with a 
resulting income of over $3000 to each city. Springfield 
receives a similar sum as two percent of the street railway 
receipts. The remaining cities have provided for fran- 
chise payments in a desultory fashion. Having no 
knowledge of what constitutes a reasonable rate and guided 
by a desire to increase property values and build up the 
city, the greater part of the franchises have been given 
away for long terms and almost without payment. 

A marked exception to the above statement is Aurora, 
which in addition to the annual charges noted in table 17 
made the following initial charges for franchises granted : 
street railway $30,000 plus $3641 as damages and attor- 
ney's fees; gas and electric, $25,000 to a fund for the erec- 
tion of a new bridge; and interurban, $25,000. That pub- 
lic service corporations can afford to pay as large sums 
as these in addition to a proportion of their annual receipts, 
for the privilege of operation, is evidence of the reason- 
ableness of any franchise payments noted in the following 
table : 

Under an effective system of legislative regulation, by 
which the price of a public utility commodity would be 
such as to pay only the cost of production and a reasonable 



423] 



REVENUES FROM SERVICES RENDERED 



63 



TABLE 17. 
RATES, AND INCOME FROM FRANCHISES, 1909. 





Utility 


Basis of Payment 


Income 


01 

ai 

! 


Alton 


Telephone . . . 

Gas 
St. Railway . . 
Telephone . . . 
Interurban . . . 

St. Railway . . 
Interurban . . . 

St. Railway . . 

St Railway .. 
St Railway . . 
Telephone . . . 
St. Railway .. 

Telephone . . . 
Gas . ... 


i% net city receipts 


|> 221 


$ 221 

4037 
1158 

3400 
ISO 
1600 


Aurora 
Belleville 


$1000 per year 


IOOO 
1000 

1537 
500 


$1000 per year 


$i per phone 


$500 per year 


$=; per car. . 


55 
1103 


Bloomington . . 
Decatur 


5% gross receipts 


2% gross receipts for 10 
years, minimum amount to 
be next ten years at 4% . . 

$10 per car 


3400 


150 


E. St. Louis . . 
Elgin 


$25 per car 


1600 


$i per phone 


612 

no 
data 


Joliet . 


$10 per car 


$i per phone 


3317 
2OOO 

500 

1283 
3320 


1317 

IOOO 
IOOO 


Ottawa 


$1000 per year 


St. Railway . . 
St. Railway . . 

Telephone . . . 
Interurban . . . 

Telephone . . . 
St. Railway .. 

Electric Co... 
Telephone ... 
Interurban ... 
[Heat 


$1000 per year 


$2000 per year 


200O 


Peoria ... . 


$500 per year 


500 


Quincy . 


Five cents per car entering 
terminal 1 


2% gross receipts 


963 

320 


Rockford 


$20 per car 


2% gross receipts 1 


(900) 

760 

2OOO 

560 


2% gross receipts 


[$2OOO per year 


\2% cross receints 





'Not enforced in 1009. 



64 



MUNICIPAL REVENUES IN ILLINOIS 



[424 



TABLE 17. Continued. 
RATES, AND INCOME FROM FRANCHISES. 





Utility 


Basis of Payment 


Income 


u 
SI 

H * 


Streator .... 


Electric 


2% gross 


172 


172 












Springfield .... 


St. Railway . . 


$10 per car... 


loo 








2% gross receipts for ten 
years ; 4% for second ten 
years ; for sewers and 
bonded indebtedness 


3319 


3619 













return upon the actual capital invested, any payment for 
the privilege of operation would only increase prices to the 
consumer. Under the present system in Illinois, except for 
a very limited and unscientific control by city councils, the 
price of a utility commodity is "all that traffic will bear" : 
that is, where the units consumed multiplied by the 
margin of profit will give the greatest return; and if the 
price is lowered it is because an increased consumption will 
more than offset the lower price. Under such methods of 
price fixing, anypayment required fojLlhe franchise will 
be upon the profits of the company and cannot cause an 
mcrease^in-jCflst^a-thfi consumer. 

In addition to the payments mentioned, some public 
service corporations are required to furnish limited free 
service to the cities in which they operate. Electric light 
companies usually give free light to the city hall, and oc- 
casionally to the fire stations. Telephone companies fur- 
nish from six to eighteen free instruments and charge for 
any number over that stipulated in the franchise. In 
addition to paving within their tracks and sprinkling the 
right of way, street car companies usually extend free 
transportation to numerous city officials. It is difficult to 
estimate the value of such services, but they exist in every 
municipality, and are perhaps worth from flOO to $500 
per year, but have a much greater apparent value. 



425] 



REVENUES FROM SERVICES RENDERED 



65 



Table 18 is a statement of the dates of grant and ex- 
piration of the larger proportion of the franchises in force 
in the cities under consideration, and from it may be 
estimated the possibilities of franchise revenue being se- 
cured. Cities renewing franchises are likely to give more 
attention to this than when making the original grants. 
The inclination to encourage new enterprises by liberal 

TABLE 18. 
DATES OF GRANT AND EXPIRATION OF FRANCHISES. 





Gas 


Water 


Electric 


St. Railway 


i 




(/i 

c 

'5. 

X 

W 


c 
g 

o 


en 


'a. 

X 

W 


CO 

6 


H 
B 

*S 

X 

H 




uj 


<n 
9 

"B> 

X 

W 


Alton 


1908 
1868 
1889 
1868 
1870 
1806 
1868 
1868 

1898 
1910 
1868 
1008 
1 002 
1909 
1910 
1907 

1868 
1890 

1910 
1868 


I9U 
1958 
Perp. 
Perp. 
-Perp. 
Perp. 

1995 
Perp. 
1909 

1928 
I930 1 
Perp. 
1958 
1932 
1929 
1960* 
1947 

Perp. 
1910 

1960 
Pero. 


1907 

Mun 
1907 
Muni 
1909 
1907 
Mun 
1885 
Muni 
Muni 
1882 
Muni 
Muni 
Muni 
Muni 
Muni 
Muni 
1889 
1904 
Muni 
Muni 
Muni 
1886 


1957 
cipal 
1932 
cipal 

1939 
1932 
cipal 

1915 
cipal 
cipal 
1912 
cipal 
cipal 
cipal 
cipal 
cipal 
cipal 
1919 

1934 
cipal 
cipal 
cipal 
1916 

IOI* 


1908 
1889 
1909 

w 

1884 
1893 

1895 

1907 
1890 

1897 

1902 
1910 
1910 
1906 

1882 
1882 

1889 

1008 


1913 
1958 
Perp. 
1929 
thout 

1913 
1920 

1937 
1910 

1947 
1932 
1930 
1930 
1926 

Perp(?) 
Perp(?) 

1924 
1028 


1909 

1893 
1909 

1898 
1901 
1894 
1893 

1907 
1890 
1868 
1898 
1904 
1910 
1910 
1906 

1898 
1899 
1907 
1889 


1929 

1919 
1929 

1928 
1921 
1914 
1913 

1937 
1910 
Perp. 
1948 

I9S4 
1930 
1930 
1926 

1923 
1924 
1927 
1924 


Aurora 


Belleville 


Bloomington . . 
Champaign . . . 
Danville 


Decatur 


E. St. Louis 
Elgin 


Evanston 
Freeport 


Galesburg 
Jacksonville . . . 
Joliet 


La Salle 


Moline 


Ottawa 


Peoria 


Quincy 


Rockford 
Rock Island . . . 
Springfield 
Streator 


Urbana . 



'Price regulated every 5 years. 
'Price regulated every ten years. 
'Cancelled franchises for 25 years (1902). 



66 



MUNICIPAL REVENUES IN ILLINOIS 



[426 



TABLE 18. Continued. 
DATES OF GRANT AND EXPIRATION OF FRANCHISES. 





Interurban 


Bell 
Telephone 


Ind. 
Telephone 


Heat 


e 

a 

E 

o 



V 

C 

'S, 

X 

W 


M 
i 




i/> 

4> 

'5. 

X 

W 




O 


1/3 

V 

'a. 

X 

W 




c 

O 


tn 

V 

C 

"a. 
X 

W 


Alton 


1909 
1893 

1905 
1902 

Wit 
Wit 


1929 
1918 
1955 

1922 

lOUt 
lOUt 


Wi 

1882 
1892 


thout 
Perp. 
Perp. 
1912 


1899 
1899 
1896 

1902 
1893 

1901 
1905 

1899 


1919 
1924 
1921 

1932 
1913 

1921 
1924 








Belleville 




Bloomington . . 
Champaign .... 


1900 
Wit 

1895 
1903 


I92O 
lOUt 

1945 
1933 


Decatur 


1892 
1897 
1894 

1910 
1882 

1897 
1901 
Wi 
1893 
1898 

1891 
1910 


1912 
1917 
1924 

1930 
Perp. 

1947 
1921 
thout 
Perp(?) 
1918 

Perp. 
1933 


E. St. Louis 
Elgin 


1900 


1925 


Evanston 


Galesburg 


1903 


Perp. 


Jacksonville . . . 
Joliet 


1906 
1904 
1910 
1906 


1956 
1954 
1930 
1926 




La Salle 


1902 


1932 




Without 


Ottawa 




Peoria 


1902 
1904 
1901 
1908 

1900 

IQO3 


1922 
1929 
1921 
1933 

1921 
I (m 


1907 

1902 


1947 
1927 


Ouinrv 


Rock ford 
Rock Island . . 
Springfield 
Streator 


1907 


1957 


1910 

1008 


1935 
1028 


Urbana , 




Pero. 



terms is instanced by the large number of interurban fran- 
chises which have been issued in the last few years, the 
majority of which extend for fifty years and are not sub- 
ject to any special franchise payment. 

Of 178 public utilities operating in 24 cities, data was 
secured on the length of franchise in 111 cases. In addi- 
tion, 14 plants were municipal ; seven were operating with- 
out a franchise, either normally, or pending settlement with 
the city; and in five cases only, the date of expiration was 



427] REVENUES FROM SERVICES RENDERED 67 

not ascertained. Of the 111 franchises, 19 are perpetual, 
one is for ninety-nine years; 15 are for fifty years; three, 
for forty years ; two are for thirty-five years ; 16 for thirty 
years ; 19, for twenty-five years ; one for twenty-three years ; 
and 35 are for twenty years. 

The statement that nineteen of a possible 111 fran- 
chises are perpetual must not go unqualified. In several 
instances the franchises do not state the date of termina- 
tion and will probably sooner or later be brought into the 
courts for interpretation. In at least one instance a gas 
franchise granted in perpetuity by the state legislature, 
has been challenged by the city in which the plant is oper- 
ating. The legal department of the municipality maintains 
that the state grant applied only to gas for lighting pur- 
poses, and that its transmission for heating is without 
legal authority. In consequence an ordinance was passed 
regulating the sale of all gas, giving the company the choice 
of acceptance or of ceasing to sell for the purpose of heat- 
ing and for power. The decision of the case will have an 
important bearing upon the remaining legislative fran- 
chises. 

It is in relation to gas franchises that the interests of 
the municipalities have suffered most. Of 24 cases, eight 
franchises are perpetual ; one is for 99 years, four for fifty 
years, and two others are for forty years. Five franchises 
are for a reasonable term, and in four instances data is 
missing. The telephone industry is a close second in this 
way, for out of fifteen "trust" franchises, five are perpetual. 

Also, in certain cities there is an inclination to grant 
franchises for long terms. In Joliet, five out of six utilities 
may operate for fifty years, for which permission is paid 
$2000 annually, plus a percentage of receipts, which last 
year amounted to $1317. Aurora has two fifty year fran- 
chises granted as recently as 1908. Several cities have 
fifty year franchises granted since 1904, one of them (in 
Ottawa) cancelling a franchise for a shorter term to give 
the longer one. 



68 MUNICIPAL REVENUES IN ILLINOIS [428 

The cities which have not qualified their franchises 
with provisions for payments will have an opportunity to 
do so within the reasonably near future. Out of 96 fran- 
chises to expire, 24 will end before 1921; during the next 
decade 38 of the remainder will terminate; from 1930 to 
1940, 15 will be terminated; from 1940 to 1950, six. The 
13 remaining franchises in operation, extend beyond the 
middle of the century. This number, considered with the 
nineteen perpetual franchises, places fifteen percent be- 
yond the reasonable control of the municipalities. 

Items of revenue from minor public privileges, bay- 
windows, sub-sidewalks, etc., are absent from the budgets 
of the smaller cities. The revenue from the use of city 
streets and alleys has been spoken of in the consideration 
of the income from the use of public property. 

SPECIAL ASSESSMENTS. 

Special assessments are not in the usual sense city 
revenues since they are raised for a specific purpose and are 
kept separate from the general fund in the city treasury. 
They do, however, form an important part of the aggre- 
gate financial transactions of the municipalities ; and their 
extent and significance should be noted. 

A thoro consideration of special assessments would 
require an extensive study both of amounts expended and 
purchases, as well as the amounts delinquent, methods of 
assessment, interest, cost of collection, etc., matters which 
can only be mentioned here. 

Pursuant to the constitution 4 the assembly has passed 
a series of acts permitting improvements by special assess- 
ment or special taxation to comprehend the following sub- 
jects: bridges, viaducts, water reservoirs and works, 
hydrants, water mains, drains, pumping stations, parks, 
boulevards, streets, alleys, and other public places. All 
or part of the cost is assessed upon the property benefitted 
in proportion to the benefit received, the residue of the cost 

*Const. of 1870. Art. 9, par. 9. 



429] REVENUES PROM SERVICES RENDERED 69 

being raised by uniform taxation. 5 The further restric- 
tions are that the purpose be public; that the apportion- 
ment be in accordance with some general rule; and that 
no assessment be levied for repairs, since they contain no 
element of permanency, with the exception that repair 
assessments are permitted on drains, ditches, and levees. 6 

The determination of the basis for apportioning the 
cost of such improvements is left to the city, and the courts 
are reluctant to inquire into the equity of the decision. 
The more usual schemes of assessment are based upon 
superficial area, actual value of the property, and frontage, 
the preference being with the latter method. In street pav- 
ing if the corner lots face the paved street the narrow 
way, no assessments is made upon the lots fronting upon 
the side streets; otherwise the first three lots on the side 
street usually are assessed sixty percent, forty percent, 
and twenty percent of what would be the normal cost of 
paving in front of them. These percentages vary slightly 
in different localities. 

The proportion of the cost borne by the municipality I 
differs widely in the construction of sewers and other I 
works, the determination of the public benefit being left tolf 
the boards of local improvement. In the building of streets* 
it is customary for the city to assume the cost of the inter- 
sections. The percentages of the total cost borne in sev- 
eral cities ranges from 11.3% to 20%, depending upon 
the nature of the improvements. The intersection rule re- 
garding streets places about 14.3% of the cost upon the city 
corporation. 

In the process of local assessment the most prominent 
part is played by the board of local improvement, a board 
whose technical officers are always the superintendent of 
streets and the city engineer. The ordinances to improve 
by special assessment or taxation originate in this body, 
either by petition or upon their own initiative. Public 

'Chicago v. Larried, 34 111. 203, 282. 

'Crane v. West Chicago Park Commissioners, 153 III. 348. 



70 MUNICIPAL REVENUES IN ILLINOIS [430 

hearings are held upon any contemplated action, except 
the laying of house drains, sewer service pipes and side- 
walks, which hearings consider the necessity, character, 
and cost of the improvement. Except in cities of over 
100,000 population remonstrance petitions may be filed 
within thirty days suspending action for one year. The 
ordinance of improvement with estimated cost is then 
passed. Apportionment of the cost is made and the as- 
sessment roll drawn up, the latter being open to court re- 
views and revision. Supplementary assessments may be 
levied if the original sum is insufficient, provided that if 
the increase is more than ten percent the entire process of 
assessment must be repeated. 

The collection of assessments is in the hands of the 
city collector until March 10th. He has no power to en- 
force payment; and the collection of delinquent sums is 
assumed by the county treasurer. After preliminary no- 
tices, these delinquencies are collected in substantially the 
same manner as delinquent property taxes, already de- 
scribed. 

Contrary to what might be anticipated with taxes of 
this nature, the amount returned to County Collector for 
collection is considerably less proportionately than is the 
case with property taxes. For example in LaSalle only 
12.4% of the total was returned to the county collector; 
in Peoria, 19.6%; Bloomington, 28.8%; and in Evanston, 
42.5%. 

The difficulties met in correlating the assessment to 
the actual cost of the improvement is apparent, and in con- 
sequence in practically every instance rebates are paid or 
new assessments are levied. The matter of rebating is of 
easy solution since the actual cost of the construction is 
known before even a few installments are paid, and any 
rebate may be prorated on future installments. 7 This 
naturally involves increased clerical cost. Deficits in the 

'In Evanston the rebates on thirteen assessment funds were 3.5% ; 
2.8%; 6%; 11%; 11.5%; 10% ; 25%; 30%; 14%; 14%; 24% and 
20%. The largest percentages were upon sewer constructions. 



431] REVENUES FROM SERVICES RENDERED 71 

fund are more serious and may be either the result of 
underestimates or of uncollected payments. In Freeport 
the liabilities are $38,552 in excess of the special assess- 
ment assets, or 13.3% of the total. The Mayor of Peoria 
in an annual address to the city council 8 remarked that the 
"amount of improvement bonds outstanding is many 
thousands of dollars in excess of special assessments re- 
maining uncollected". 

The extensive precautions taken to protect the rights 
of the property owner have been mentioned, and these safe- 
guards add a considerable cost to the assessment work. In 
Urbana, newspaper advertisements costs $75 for each job, 
in addition to the printed notices sent to each person con- 
cerned. By statute the preliminary expense is limited to 
six percent of the total, and this allowance is entirely con- 
sumed in the smaller constructions. In cases involving 
larger amounts these preliminary expenses fall to three or 
four percent. An example of the costs involved in extend- 
ing assessments may be taken from the collection returns in 
Evanston. Of $126,144 expended, bonds, coupons, war- 
rants, and miscellaneous funds took $122,446, or 97%. Re- 
bates amounted to $1,061, or .08%, while the expenses in- 
cidental to collection, etc., took $2,618, or 2.2%. 

The surest criteria of the extent to which special as- 
sessments are used would be the amounts of improved 
streets, sewers and other public constructions in each city. 
Unfortunately not all city engineers are familiar with the 
total amounts of these works in their municipalities so a 
complete comparison is impossible. Of eight cities, how- 
ever, the largest proportion of paved streets was in Free- 
port, being 45.3% of the total; Springfield followed with 
45% ; and Rockford with 44%. The smallest percent is 
in Galesburg which has only 21.4% improved; the next 
lowest being Decatur with 28.7% improved. 

Regarding sewer construction, Danville has one mile 
for every 490 inhabitants, Bloomington and Freeport fol- 

"E. N. Woodruff, in the City Comptroller's Report, 1909. 



72 MUNICIPAL REVENUES IN ILLINOIS [432 

lowing with 500 and 515 persons per mile. The largest 
population per mile is in East St. Louis, which city has 
1310 persons for each mile of sewer. In the larger cities, 
however, there is a tendency to have fewer sewers in pro- 
portion to the population, as the per mile population in 
Springfield is 850, in Rockford is 835, and in Gales- 
burg 720. 

The contractor for special assessment work receives 
as payment bonds payable in five or ten annual install- 
ments (thirty in the case of water works), bearing interest 
at 5%. Such bonds are not a lien upon the city, but upon 
the property of the individual, altho the municipality 
undertakes and guarantees the collection. The amount of 
bonds outstanding in the cities, would, however, fail to 
indicate the extent to which assessments are used since 
the amount is decreased by one-tenth each year, and the 
constructions doubtless have a longer life than this period. 
This statements is supported by a comparison of the per 
capita special assessment bond indebtedness in a few cities. 
Aurora has such per capita indebtedness of $5.35 ; Decatur 
of $3.00; Elgin, $6.40; Freeport, $14.70; LaSalle, $4.00; 
and Peoria, $6.30, a considerable variation compared 
with the paved streets to total streets, which range from 
20% to 40%. 

For the same reason the amount of cash collected each 
year to retire bonds, or the amount of bonds issued, is a 
false indication of the importance of assessments in mu- 
nicipal finance, the latter sum even more so than the 
former, since the amount of construction work fluctuates, 
widely from season to season. 



CHAPTER V 
MUNICIPAL INDUSTRIES AND PROPERTY. 

Judged by the gross revenue received, municipal in- 
dustries rank third in importance as sources of municipal 
income. But the gross income from such sources is largely 
if not wholly absorbed by the expenses, and in most of the 
cities under review municipal industries are conducted at 
a loss. The net income from such sources and its per- 
centage of the total revenue for general purposes, as shown 
in the concluding chapter, is of small importance. 

By municipal industries are meant those undertak- 
ings which involve the distribution of economic goods 
for a price, thus excluding such functions as police, fire 
protection, and schools, all of which are contemplated if 
not distinctly recognized in the present state constitution. 
There is no distinct constitutional provision authorizing 
municipal industries; and most undertakings are of later 
origin than the present state constitution, resting on legis- 
lative grants under the residual powers of government. 

The municipal industries conducted by the cities 
studied are of three main classes: water works, electric 
light plants and cemeteries. Water works and cemeteries 
may produce a net revenue. Electric light plants in the 
cities studied have no income, as they are used only for 
public lighting. But they are considered here because of 
their close relation with the operation of municipal water 
works, of which they are usually a part. 

Some incidental income is also derived from libraries, 
hospitals, sewers, real estate and other property. 

WATER PLANTS. 

Legislative enactments of 1873 and 1879 1 authorized 
the establishment of municipal sewers and water works, 
tho both of these might have been constructed under the 

Curd's Revised Statutes (1908), ch. 24, pars. 254 and 323. 

73 



74 MUNICIPAL REVENUES IN ILLINOIS [434 

police powers of the cities. 2 Earlier legislation relative to 
waterworks provided for the lease of plants, and for mak- 
ing contracts for a supply of water from private firms for 
a period of not more than thirty years. In case of leasing 
any surplus over the cost of operation might be applied to 
the erection and extension of a municipal plant. An 
act of 1905 3 provides that plants may be bought or erected 
upon a favorable three-fourths vote of the citizens, a 
direct tax of not more than one percent defraying the cost. 
Bonds may be issued against these taxes bearing interest at 
six percent. The water rates must be sufficient to provide 
for payment of the bonds, interest, maintenance and opera- 
tion of the works, extensions and repairs. Thus Illinois has 
gone far in the protection of the taxpayer from impositions 
in the interest of the water consumer. There are no good 
reasons for, and many against paying for extensions from 
the water rates. These should be charged to capital ac- 
count, and made neither a burden upon the tax payer, nor 
upon the present consumer. 

Should the preceding provisions prove inadequate to 
public need, there are other provisions which authorize a 
one mill tax for the extension of mains, maintenance of 
plant, or for refunding debt. 4 By a two-thirds vote, this 
tax may be advanced to three mills. Cities when buying 
plants may also pledge the revenues as security for the 
bonds issued, and may execute a mortgage or trust deed for 
the property. 5 In case of reversion to the original owner, 
any franchise rights pre-existing become operative. 

Of the twenty-four cities which were investigated, 
fourteen have availed themselves of the privilege of estab- 
lishing water plants; and data concerning the operation 
has been secured from thirteen of these. 

In table 22 is shown the amount of money derived an- 
nually from water rents in the several cities; but such 

*Goodnow, "City Government in the United States", p. 165. 
*Rev. Stat. ch. 24, par. 27oh-q. 
*Ibid. ch. 24, par. 281. 
'Ibid. ch. 24, par. 2;od. 



435] MUNICIPAL INDUSTRIES AND PROPERTY 75 

revenue should be offset by the operating expenses, interest 
on the value of the plant and depreciation allowances. 
When this has been done the revenue usually becomes a 
deficit, which sooner or later, must be made up from the 
general fund of the city, by the,issue of bonds or by taxes. 
This deficit may be considered the amount which the 
municipality contributes in payment for the water pumped 
for public buildings, and as rental for fire hydrants. Such 
accounting contemplates the city water plant operated as 
a separate and distinct institution, earning its own way in- 
dependently of the city treasury, charging the water con- 
sumer for his benefits, and the tax payer for the benefits 
rendered to the city at large. 

It is sometimes assumed that the water consumer and 
the taxpayer are identical, and that the separation of the 
two for a study of water revenues is unnecessary. Such 
is not the case, nor can a practice followed uniformly by 
public utility commissions be renounced by such argument. 
There is ample evidence that not all urban inhabitants are 
direct water consumers. Not only are there sparsely set- 
tled sections which are not reached by the water mains, 
but limited sections of the more densely parts are not 
served. If we may estimate that five persons ( the ordinary 
family) are served by each water service, then in Rockford, 
35,000 out of a population of 42,000 are water consumers; 
in Bloomington, 10,000 of 26,000, etc. Roughly, twenty 
percent of the people receive benefit from water works, 
who do not contribute to their support by domestic con- 
sumption. But should it appear that the tax payer and 
the water consumer become largely the same persons, this 
fact does not justify an unbusiness like management of 
waterworks. 

The Wisconsin Railroad Commission has a system for 
the separation of the cost of the public from the domestic 
service which is preferable to one based on the above men- 
tioned distinction. 6 Each water plant has an investment 

'Wisconsin Railroad Commission. Pub. U. 52. (City of Ashland v. 
Ashland Water Company.) 295. 



76 ' MUNICIPAL REVENUES IN ILLINOIS [436 

above that required for domestic purposes, which is occas- 
ioned by the necessity of fire protection and other public 
needs. The commission therefore divides the investment 
for these two purposes, and upon this basis estimates the 
cost of depreciation, interest and maintenance chargeable 
to each. While this is of course the correct method its 
use is only possible by means of a detailed engineering valu- 
ation. However, it is not here the purpose to determine 
the equitable charges for the taxpayers and water con- 
sumers of Illinois cities, but rather to compare the different- 
costs of operation, and to point out in certain cases mat- 
ters which are worthy of explanation or investigation by 
the individual superintendents. 

It may be necessary to defend the view that a munici- 
pal water plant should earn a reasonable rate of interest 
upon the amount invested. If, however, we are willing to 
divorce the personality of the water consumer from the 
taxpayer, the justice of such a demand is apparent. While 
the value of the plant is represented by bonds, the necessity 
of the plant earning interest upon these bonds will hardly 
be questioned. When such bonds have been refunded, or 
have been retired through the exercise of the taxing power, 
it would seem that a sum equal to the original interest 
should still be turned into the city treasury, in one case 
to pay the interest on the new bonds ; in the other to recom- 
pense the tax payers for the use of the funds. It may be 
argued that the state law already mentioned requires that 
the erection bonds be retired from the earnings of the 
plant. One looks in vain, how r ever, either for any author- 
ity to put such a requirement into effect, or for evidence 
of its enforcement, as exhibited by a statement of municipal 
indebtedness. 

The major proportion of municipal bonds are out- 
standing at from four percent to four and one-half percent 
interest. 7 Four percent has been taken as reasonable for 
a plant to earn, without regard to the rate in any particular 

T See Table 29. 



437] MUNICIPAL INDUSTRIES AND PROPERTY 77 

city. Such a rate is conservative, and makes some allow- 
ance for the uniformly excessive valuation of the proper- 
ties. 

The necessity of charging depreciation against a plant 
is more apparent, and only one instance will be presented 
as evidence. Springfield found itself at the beginning of 
1909 with a badly delapidated plant, capable of maintain- 
ing at times only twenty pounds of pressure. Repairs and 
renewals were badly needed, but since the city had reached 
the debt limit no bonds could be issued; and since no de- 
preciation fund had been maintained the money must first 
be earned by the plant itself. The results of such methods 
are wasteful operation, high charges and poor service. The 
estimated life of four municipal water plants in Wisconsin 
was 65.25 years or a depreciation of something less than 
two percent per year. 8 This latter rate might be assumed 

*The calculations of the lives of the various units of utility equipment, 
upon which this estimate was based, were kindly furnished by Mr. Edwin 
F. Gruhl, Statistician for the Railroad Commission of Wisconsin, and are 
as follows : 

Wells, driven or drilled roo years. 

Wells, large open, stone or brick walled 50-100 " 

Suction pipes and intakes 50-100 " 

Stand pipes 50- 75 " 

Reservoirs 75-100 " 

Filter beds 100 

Cast iron mains, fittings, valves 100 " 

Hydrants 50 " 

Wrought iron mains, services 

galvanized 50 " 

black 35-40 " 

Services, lead 100 " 

Fittings and valves in service given a life as in pipe lines in which 
located. 

Meters 25 " 

Using lives similar to these, the average rates of depreciation for 
entire waterworks systems were computed as follows : 

Antigo Water Works 60.03 years. 

Manitowoc Water Works 66.16 " 

Superior Water, Light and Power Co 67.29 " 

Chippewa Falls Water Works and Light Co 67.60 " 

Average 65.25 " 



78 MUNICIPAL REVENUES IN ILLINOIS [438 

were the depreciation fund to lie idle and earn no interest. 
In private plants depreciation funds may be reckoned as 
earning 4% compound interest. In the case of public 
plants the funds will possibly be idle, or even more prob- 
ably spent. In this latter case we may assume that the 
fund becomes a debt of the city and is worth at least four 
percent simple interest. The rate of depreciation may then 
be said to lie between one-half percent and two percent of 
the depreciable value, and by depreciable value is meant 
the cash value, less real estate, paving, services where paid 
for by the consumer, and extensions made during the cur- 
rent year. The mean figure of one percent is usually al- 
lowed by engineers as a reasonable depreciation upon this 
value. Tho this latter amount cannot be known for the 
plants here in question, we will assume that this depre- 
ciation applies to the total value. 

In the following table is shown for thirteen cities, the 
estimated value of the plant, interest, depreciation and 
cost of operation, making a total of all costs; and the ex- 
cess of this sum over the revenue received, which may be 
taken as the amount paid by the city for the public service 
of the plant. In the last column this deficit is shown as 
cost per hydrant. In the second table is presented the 
average daily pumpage of each city ; the total cost (interest, 
depreciation and operation) for pumping each million 
gallons; the actual cash income from water rents for each 
million gallons ; and the actual cost of operation per million 
gallons. 

These tables are self-explantory and carry in some de- 
gree their own criticism. While it is unfair to criticise the 
administration of any particular city because of high cost 
of operation, since the conditions of operation in different 
cities are decidedly different, yet taken as a whole the 
tables may indicate the general tendencies of municipal 
management. 

It will be noticed that three of the thirteen cities, 
Decatur, Evanston and Springfield, are operating water 
works with a distinct surplus above a liberal estimate for 



439] 



MUNICIPAL INDUSTRIES AND PROPERTY 



79 



all expenses. In such instances the consumer is not only 
paying for his own water, and for the service to the city, 
but is turning considerable profit into the city treasury. 
In Springfield the conditions make such results necessary, 
for reasons already stated; but in the two other munici- 
palities, it appears that the water rates might reasonably 
be lowered. 

On the other hand, two cities, Joliet and LaSalle, are 
evidently operating their plants at a loss. The public 

TABLE 19. 

STATISTICS OF MUNICIPAL WATER PLANTS AND COST PER HYDRANT IN 
ILLINOIS CITIES, 1909. 





Estimated 
Value of 
Plant 


U 


Depreciation 
at i% 


c 
_o 

rt 

4,, Ui 

in 4> 

o a 
U O 


H 

| 

"a U 
"o 
H < 


Income from 
Water Rents 


Deficit over 
Income 


in 

"c 
C 

T3 
ffi 
O 



Cost per Hydrant 


Aurora .... 
Bloomington 
Decatur . . . 
Elgin 


$500,000 
350,000 
450,000 
585,000 


$20,000 
14,000 
18,000 
23,400 


$5,000 
3,500 
4,5oo 
5,850 


$26,000 
25,268 
28,000 
19,488 


$51,000 
42,768 
50,500 
48,738 


$45,032 
34,307 
60,000 
42,000 


$5,968 
8,461 

6,738 


517 
506 
540 

4 -JO 


$11.50 
16.72 
Profit 
15.67 


Evanston . . . 
Galesburg . . 
Jacksonville 
Joliet 


600,000 
285,000 
225,000' 
600,000 


24,000 
11,400 
9,OOO 
24,OOO 


6,000 
2,850 
2,250 
6,000 


27,873 
19,530 
I I,OO2 4 
34,985 


57,873 
33,780 
22,252 
64,985 


93,697 
24,614 
16,554 
32,000 


35,824" 
9,066 
5,698 
32,985 


578 
386 
205 


Profit 
23-49 
27,79 
06.7^ 


LaSalle .... 
Ottawa 
Rock ford . . 
Rock Island 
Springfield . 


250,000 
235.000 
849,094 
900,000 
707,811" 


IO.OOO 
9,400 

33,963 
36,000 
29,750' 


2,500 
2,350 
8,490 
9,000 
7,078 


15,297 
8.OOO 
31,833 
28,000 
54,258 


27,797 
19,750 
74,286 
73,000 
91,086 


15,694 
14,266 

64,449 
64,700 
123,083 


12,103 
5,484 
9,837 
8,300 
31,997" 


105 
167' 
519 
254 
906 


115.26 
32.83 
i8.95 
32.68 
Profit 



'Actually used by water plant. 

'Estimated. 

*It is estimated that $850,000 of the banded debt of the city is 
chargeable to the water works. The interest is at 3 l /2%. 

4 8 mo. -f- pay roll for 4 mo. 

To be accurate an estimate of the taxes should be included in this 
cost. Owing to the different rates of assessment and taxation, the item 
of taxes is omitted. 

"Surplus of income over all costs. 



80 



MUNICIPAL REVENUES IN ILLINOIS 



[440 



TABLE 20. 

STATISTICS RELATIVE TO COST OF OPERATION PER MILLION GALLONS PUMPED 
BY MUNICIPAL WATER PLANTS. 





Average Daily 
Pumpage, Gals. 


Total Cost per 
Million Gallons 


Income per 
Million Gallons 


Cost of Operation 
per Million Gals. 


tn 

O 
to 
Jii 

I 


u 
9 
A 

"c 

rt 

-O v 

is 


Average per Cap. 
Daily Consumption 


w 
"> 
C/3 
O 


Aurora 


1,789,000 


$78.30 


$69.00 


$40.00 


61 


85 


60 


Metered 


Bloomington .... 
Decatur 


1,750,000 
3,000,000 


67.00 
46.00 


53-75 
92.00 


39-6o 


46.75 


10.8 
108 


67 
06 


Metered 
Metered 


Elgin 


2,292,000 


=58.00 




22.1=5 


56 


7.6 


88 


53%' 


Evanston 


6,056,000 


26.00 


42.20 


12.60 


7=5.067 


7.7 


148" 


Partly ? 


Galesburg 


2,000,000 


46 20 




2680 








Metered 


Jacksonville 
Joliet 


800,000 
4,500,000 


77.10 
39.4O 


56.75 


37.65 
21.12 


30 
39.38 


6.8 

8.6 


52 

129 


Metered 


LaSalle 


2,500,000 


32.OO 


17 20 


l68o 


16 


6=; 


216 


None^ 


Ottawa 


600,000 


00 20 


65 oo 




27 


62 


=54 


Metered 


Rock ford 


3,612,000 




48.90 


24.2O 




=5 7 


85 




Rock Island .... 
Springfield 


3,500,000 
4,678,000 


55-80 

53-50 


48.50 
72.00 


2I.4O 

31.80 


37 
97 


6.8 

8-3 


134 
00 


lw 



*Of the water revenue is from metered services. 
2 Of the services are metered. 
3 Supplies a suburb at a flat rate. 

cost of maintaining hydrants in these corporations is esti- 
mated at $96.73 and $115.26 respectively, which based upon 
the rates charged by private plants is excessive. The aver- 
age rate charged by water companies in seven cities of the 
state (without reference to the number of hydrants in each 
city) is $47.66, 9 the range being from $25 in Peoria to 

"Alton 276 hydrants @ $50.00 

Champaign 172 @ 40.00 

Danville 440 " @ 40.00 

Freeport 190 " @ 50.00 

E. St. Louis 125 " @ 80.00 

150 " @ 70.00 

Peoria 1000 " @ 41.60 

113 " @ 25.00 

Streator 1 12 " @ 45.00 

161 @ 50.00 



441] MUNICIPAL INDUSTRIES AND PROPERTY 81 



in East St. Louis. The normal rate is between 
and $50 per hydrant. The unweighted average cost per 
hydrant in the ten municipal plants not operating at a 
profit is $44.97, while in most of the cities the cost is 
between $15 and $33. A more exact statement would be to 
say that the whole public service, cost this much per 
hydrant, since no allowance has been made for water con- 
sumed for other public purposes. 

If two cities are operating municipal plants to their 
direct financial detriment, to what causes may this loss be 
ascribed? In both Joliet and LaSalle the amount of water 
pumped is large for the amount of capital invested, so ex- 
cessive interest and depreciation charges may not be ad- 
vanced as reasons. The two remaining factors which 
influence the charge to the municipality are the cost of 
operation and amount of income from water rents. In 
both cases under consideration the former charges are low, 
being $21.12 per million gallons in Joliet, and $16.80 per 
million gallons in LaSalle. At the same time, the amounts 
received for water in these cities are relatively small com- 
pared with the sums received in neighboring municipalities, 
being under $20.00 per million gallons in both instances. 
Since the loss can neither be ascribed to the fixed charges 
nor extravagant operation, it follows that the rates charged 
in these cities are too small for successful operation of the 
plants. In these two instances the water consumer is 
profiting decidedly at the expense of the tax payer. 

In other instances the reverse is true. For example, 
Aurora receives $69.00 per million gallons pumped; De- 
catur, $92.00; Ottawa, $65.00; an Springfield, $72.00; 
while the incomes of several other cities ranges above $50.00 
per million gallons. In all of the above mentioned cities 
except one (Ottawa), the cities are receiving fire protection 
free, or at a cost of less than $17.00 per hydrant ; and this 
in spite of the fact that two of the municipalities (Aurora 
and Bloomington) have high operating costs. Under such 
conditions the taxpayer profits at the expense of the water 
consumer. 



82 MUNICIPAL REVENUES IN ILLINOIS [442 

It has been mentioned that in two cities the cost of 
operation was high compared with the other plants of the 
state. Conditions of operation vary widely in different 
localities, and it is unfair to make a hurried judgment 
concerning the efficiency of management in any particular 
city. We may, however, compare the cost of operation in 
the municipal plants of the state with similar items of 
typical private plants. The operating expenses per mil- 
lion gallons for nine private plants in Wisconsin, were 
during recent years, as follows : Appleton, $36.73 ; Beloit, 
$23.35; Eau Claire, $18.24; Fond du Lac, $20.31; Green 
Bay, $48.79; and Sheboygan, $24.74. An average for the 
nine plants is $29.78 or allowing for pump slip (which 
was done in the figures for municipal plants) is $33.08. 10 
The average cost of operation per million gallons for 
thirteen municipal plants in Illinois is $27.38 per million, 
and eight of the number fall considerably below this figure. 
This would seem to indicate that municipally operated 
plants compare successfully with those in private hands. 
It must be remembered, however, that municipal plants 
pump large quantities of free water, and frequently have 
unmetered service, in which events the favorable showing 
of public plants might be accounted for by the law of 
decreasing costs, with cheapened increased production, 
rather than thru any retrenchment or economical adminis- 
tration by public officials. Caution would commend this 
latter view. 

The situation may be further analyzed by comparing 
the ratio of operating expenses to revenues in public and 
private plants. In Wisconsin private plants are allowed to 
earn operating expenses, plus a reasonable profit, and 
depreciation. The "total of all costs" shown in table 21 
represents the same earnings for municipal plants. For 
ten private plants the percentages in 1908 were: 11 

M R. R. Com. of Wis., supra cit., 283. 
"Supra cit. p. 282. 



443] MUNICIPAL INDUSTRIES AND PROPERTY 83 

TABLE 21. 
RATIO OF OPERATING COSTS TO RECEIPTS IN PRIVATE WATER PLANTS. 

Appleton Water Works Co 63.04% 

Beloit Water, Gas & Electric Co 41.01 

Eau Claire Water Co 38.04 

Fond du Lac Water Co 33.69 

Green Bay Water Co 42.73 

Janesville Water Co 47.40 

Manitowoc Water Co 46.99 

Marinette City Water Co 34.57 

Sheboygan City Water Co 27.34 

Average 39.34 

For thirteen municipal plants in Illinois the ratio of 
operating costs to revenue and to "total of all costs" is : 

TABLE 22. 

RATIO OF OPERATING COSTS TO RECEIPTS AND "TOTAL OF ALL COSTS" 

IN MUNICIPAL WATER PLANTS. 
City. Revenue "Total of all Costs." 

Aurora 57-8% 52.1% 

Bloomington 740 59.2 

Decatur 46.7 55.4 

Elgin 46.4 40.0 

Evanston 29.7 48.3 

Galesburg 79.1 58.0 

Jacksonville 66.5 49.4 

Joliet 109.2 54.0 

LaSalle 97.5 53.0 

Ottawa 56.0 40.5 

Rockford 49.5 43.0 

Rock Island 41.7 38.4 

Springfield 44,1 59.6 

Average 61.3 50.2 

From these two tables it appears that one city is 
operating its water works at a net loss, another within 
2.5% of its income, and seven spend more than one-half 
of their income for operating expenses. Either the oper- 
ating expenses of municipal plants are too high or the 
charges for water are too low. The second column of the 
second table shows operating expenses in relation to the 
"total of all costs". A liberal allowance has been made 



84 MUNICIPAL REVENUES IN ILLINOIS [444 

for interest and depreciation, yet the percent for operation, 
with one exception, is higher than the average for private 
plants. On the average the ratio is ten percent higher. 
While these figures are not favorable to, they are not an 
arraignment of municipal ownership. As counter argument 
it may be advanced that low rates are accompanied by lib- 
eral use of water, which is a matter of city policy and not 
of plant management. 

Meter or fixture rates have a decided influence upon 
the net revenues of a water plant. A metered plant may 
operate at a loss thru extravagance or low rates; a fix- 
ture plant has the handicap of wasted water in every case. 
In table 20 is stated the per capita daily water consump- 
tion of the cities under consideration. The metered plants 
have an average daily consumption of 69 gallons per per- 
son, while the average for the remainder is almost double 
or 132 gallons. The purpose of the meter is not to require 
excessive payment, but to regulate the consumption of 
water. In fact, in Springfield, the consumer saved from 
25% to 50% by the adoption of meters. 12 The sudden 
adoption of meters, because of the large decrease in con- 
sumption means a temporary dimunition of the city in- 
come until the saved water is purchased by new users. The 
saving in the cost of operation, however, is noticeable from 
the beginning. In Elgin with only one-half of the taps 
metered, the saving in one year (1907-08) was $6,000, the 
annual pumpage being reduced 50,000,000 gallons. The 
wasted water is paid for, not in proportion to what is 
wasted by the individual, but in proportion to what is 
wasted on the average. It is only equitable that each con- 
sumer should pay upon a graduated scale for the water 
which he consumes, plus a fixed charge for booking, re- 
pairing, cost of meters, meter reading, and other inci- 
dental expenses. 

"Springfield, 111. Annual Report of Water Works, 1910, p. 7. In 
this excellent report upon a rather inadequate plant, Mr. Willis J. Spauld- 
ing presents some very reasonable arguments for metered service and for 
the payment of extensions by the property frontage owner. 



445] MUNICIPAL INDUSTRIES AND PROPERTY 85 

A further immense loss to commercial revenues is due 
to the loss of water by leakage. An investigation of the 
municipal plant at Madison, Wis., showed that only 
45 % of the water pumped reached the consumer. A very 
conservative estimate for the city of Springfield was that 
22% of the pumpage was being lost. The estimated life of 
water pipes is one hundred years. In heavy soils mains 
may last longer than this; but in light or stony ground, or 
where there is action by electrolysis, the duration cannot 
be estimated. Perhaps several municipalities which are 
contemplating new wells and enlarged plants to supply the 
demand for water, might find it cheaper to rent a pitometer 
and investigate the conditions of mains lying parallel to 
street car tracks, or which have been long in the ground. 

In connection with water mains a word may be added 
concerning the extension of the distributing system. It 
has been urged that the cost of laying new pipes be charged 
to frontage by special assessment rather than paying it 
from the water fund or from general taxes. Nearly one- 
half the cities mentioned here have adopted this method in 
whole or in part, altho many miles of mains have been pre- 
viously laid out of the water fund. 

Under the water fund plan of extensions there is a con- 
stant rivalry of different sections of the city to secure 
water services. Since the funds are limited, favoritism 
and ill feeling may be expected, combined with an absolute 
restriction upon the growth of the city. Moreover, when 
pipes are laid in sparsely settled districts, there is a distinct 
rise in property values to which the owner has contributed 
nothing, the water consumer bearing the cost. Under the 
old system the consumer, in the end, not only paid for his 
own frontage, but also for the frontage of the vacant 
property owner. The change to the special assessment 
method would mean that the consumer would pay for his 
own frontage in a lump sum, and be relieved from paying 
the cost of his neighbor's improvement. 



86 



MUNICIPAL REVENUES IN ILLINOIS 



[446 



LIGHTING PLANTS. 

Municipal lighting plants in Illinois yield no direct 
revenue to the city treasury, since they are not permitted 
to undertake commercial lighting; yet they should be con- 
sidered owing to their close relation to municipal water 
plants. In all the cases of public lighting systems con- 
sidered the lighting plants are a part of the water works, 
and are charged a fixed proportion of the costs of operation. 

An act of the legislature of 1883 13 permits cities to 
levy a three mill tax to be used exclusively for the purpose 
of lighting streets. Under this act, six cities do their 
own public lighting, a statement of their costs being pre- 
sented in table 23. 

TABLE 23. 

STATISTICS RELATIVE TO COST OF OPERATION IN MUNICIPAL LIGHTING 

PLANTS. 













en 


en 






<u 








tn 


0. 






3 

13 


* 


c 






U 


J 


O, 
I 




^ 


^W 


o 




~ 


4H 


C] 




n 


rt 


' 


_ o 


*< 


O 


*J 




+ J C 


B 


'G 



O -4- 


o 


U 


3 






U 


W 


u rt 






a. 




SI 
.- 


u 

V 






* 


"I 






t/) ... 




8* "^ 


0, 


o 


3 


o 




w ^ 


C 


13 


u o 


H 





U 


Aurora 


$40,000 


$1,600 


$1,200 


$IO.OI4 l 


$12,814 


$4l8 


$^06=; 


Bloomington 


T- > *"* 

100,000 


4,000 


^.ooo 


v > ^ 
I7.2OI 


24,201 


T 7 " ^^ 

442 


*fO^-" v 'J 


Decatur 


85,000 


J.4OO 


o**-'*- 


* / >**;#* 

I4.OOO 


* - *T>*';y * 
IQ QS.Q 


*T*T** 

3O0 2 


66.50 


Galesburg 


4=1,000 


*Jt*T^" 

1 ,800 


1 .35^ 


"t^*"" 
IO,OOO 


:fryj^ f 
13,150 


776 


TO.! 1 ! 


Jacksonville 


T^*^^ 
25,OOO 


1,000 


750 


8,OOO 




jj x ' 

226 


jy j 

4^.14 


LaSalle 


5O,OOO 


2,000 


/ <J V 

1,500 




O.OOO 


114 


"J* "T 

70.82 












^,vw 


^ 


/ y-"* 



'$5842 for seven months. 

2 Is rapidly increasing number to a maximum of 700. 

The matter of interest on the value of public plants 
has been previously discussed, the rate taken being four 
percent. The rate of depreciation is much higher in elec- 
tric plants than in water works. From data furnished by 
the Railroad Commission of Wisconsin the average life of 

"Rev. Stat. (1908), ch. 24, par. 281. 



447] MUNICIPAL INDUSTRIES AND PROPERTY 87 

a complete electric light plant has been estimated at 17.46 
years. 14 In municipal plants, maintaining only an arc 
system, the average life would be a trifle longer. The Wis- 
consin Commission estimate, in the case of the Menominee 
and Marinette Light and Water Co., was 19.72 years. This 
would require a simple depreciation charge of five per 
cent per annum ; or allowing four percent compound inter- 
est upon the depreciation fund, the necessary rate would 
be 2.42%. At three percent interest, the rate would be 
2.85%. Between these limits three percent may be con- 
sidered as a fair rate of depreciation. 

In Table 23 is shown the estimated value of the public 
lighting plants; the interest on these sums at four percent; 
depreciation at three percent; cost of operation for the 

"The unit lives involved in municipal lighting are : 

Generators and rotaries 20 years 

Static transformers 20 " 

Steam turbo-generators 20 " 

Switchboard and wiring complete 20 " 

Lightning arresters 10 " 

Weather proof copper wire installation 16 " 

Underground cable 25 " 

Aerial cables 15 " 

Manholes 50 " 

Conduits 12-18 " 

Cedar poles in earth 20 " 

Cedar poles in concrete 40 " 

Pole anchors and guys 12-15 " 

Service transformers 15 " 

Arc lamps and span equipment 15 " 

With unit lives similar to these, the composite life of complete electric 
systems was computed as follows : 

Madison Gas & Electric Co 17.2 years 

Ripon Light and Water Co 18.24 " 

Superior Light & Power Plant 17.91 " 

Chippewa Falls Water Works & Light Co 15.60 " 

Green Bay Traction Co 16.73 " 

Ashland Light, Power & Traction Co 17.04 " 

Wisconsin Traction, Light and Power Co 20.59 " 

Menominee Light & Traction Co 17.54 " 

Average 17.46 " 



88 



MUNICIPAL EEVENUES IN ILLINOIS 



[448, 



last fiscal year ; "total of all costs" ; number of lamps and 
the estimated cost per lamp. 

The figures for the total cost per lamp may be com- 
pared with the prices paid to private plants in the cities 
not having municipal plants. In table 24 these are given 
with the number of lights and the schedule upon which they 
are run. 

TABLE 24. 
CHARGES BY PRIVATE ELECTRIC LIGHT PLANTS FOR ARC SERVICE. 



City 


No. of Lights 


Charge 
per Year 


Schedule 


Alton 


250 


$6g 


Philadelphia 


Belleville 


351 


70 


Complete 


Danville 


cc 


60 


Complete 


Elgin 


425 
24.7 


40 
58 


Philadelphia 
Complete 


Evanston 1 


103 

43 
386 


48 
42 
60 


Limited 
Limited 
Philadelphia 


Freeport 


1 10 


70 




Rockford 2 


W 


^2 


Complete 


Rock Island 


287 


60 




Streator . 


161 


6< 


Philadelohia 



*New schedule now in force, $62.50 for overhead service; $72.50 for- 
conduit services, all complete. 

2 City owns the means of distribution. 

Such a comparison is, however, of limited value. In the 
first place municipal plants do not adopt a steady schedule, 
but burn their lights as the circumstances require. 
Further, no great dependence can be placed upon the valu- 
ation of the plants or upon the costs of operation which are 
given. In most cases the estimated values are percentages 
of the total figures for the municipal water plants. The 
lighting plants could probably be duplicated in every case 
for the amount stated; but the operating costs cannot be 
accurately checked against them since these are frequently 
given as one-third of the combined costs of operating the 
light and water plants. 



449] MUNICIPAL INDUSTRIES AND PROPERTY 89 

Remembering these limitations upon the accuracy of 
our figures, it appears that three cities, Aurora, Gales- 
burg and Jacksonville, are securing light at a less cost 
than could be done by private contract. In the other three 
cities the cost of municipal lighting appears to be more than 
the lowest charge made by private plants, but in two cities 
the circumstances point to an actual cost which is lower 
than that shown here. Galesburg is rapidly extending to 
a 700 light system; while the figures from Bloomington 
appear to be purely guess work rather than a careful esti- 
mate. When lighting plants are operated in combination 
with municipal water works, using boilers which otherwise 
would stand idle at night, the result should be lighting at 
a small cost. Some superintendents complain that since 
they are not allowed to sell commercial power and light, 
the plants are at a disadvantage. Such permission would 
put into usefulness valuable machinery which is now idle 
during the day time. In small cities where municipal light- 
ing is the principal item of light, the erection of a private 
plant in addition to a municipal plant is a useless duplica- 
tion of works ; or the introduction of modern lighting is de- 
layed until the private industry can be supported without 
the public contracts. 

CEMETERIES. 

Public cemeteries are authorized by an act of the 
legislature of 1874, which permits cities and villages to 
acquire property, sell lots, and provide a board of control 
for burial grounds. 15 Burial grounds are owned by seven 
of the municipalities visited and in an eighth (Moline) 
they become public in 1912. These undertakings, however, 
are of small importance, as sources of revenue. The 
charges are not such that public operation can be compared 
with that of privately owned grounds. From the point 
of revenue the possession of these grounds is a decided loss. 
Omitting from consideration, both the interest on the 

"Rev. Stat. (1908) ch. 21, par. 5. 



90 



MUNICIPAL REVENUES IN ILLINOIS 



[450 



original investment, and the constant depreciation from the 
sale of lots, the cost of operation and maintenance exceeds 
the income in three of the five cases in which the costs 
were obtainable. The sums involved, however, are incon- 
siderable. The following table shows the revenues as well 
as the cost of operation where this item could be secured. 

TABLE 25. 
INCOME AND COST OF OPERATION OF MUNICIPAL BURIAL GROUNDS. 










cn 




V 


*-, 




E 





- 3 

n 


s 


o *i 


rt* 


^ t/3 


V) 




03 ^ 


w *^ 


u 


" 


"rt O 


- 5 


O <U 


11 




42 fe 


C/3 J 


S Pi 


H OH 


u o 


Aurora . . 








$2646 


$1296 


Belleville 


$2266 


$1455 




3721 


3500 


Bloomington 




"^04 


4 


638 


841 


Elgin 


1420 


4177 


1141 


6738 


7220 


Freeport 




2^0 


238 


497 


1697 


Galesburg 








1487 




Jacksonville 








2160 

















PUBLIC LIBRARIES. 

The income accruing to libraries might be tabulated 
with other city revenues, according to its source, as fines, 
rents, etc. For purposes of comparison, however, and since 
these sums seldom reach the city treasury, it is preferable 
to treat library revenues as distinct from those of the city. 

In Table 26 is shown the miscellaneous income from 
twenty-two public libraries. The latter part of this table 
refers to book circulation which more or less influences the 
amount of income. 

Two libraries, in Alton and Ottawa, are dependent 
upon endowment for practically their entire support, the 
latter receiving a city appropriation of only $500 per year; 
Champaign is partially independent of municipal support. 
Evanston has two small funds, the interest of which is ap- 
plied to the purchase of books upon medicine and music. 



451] 



MUNICIPAL INDUSTRIES AND PROPERTY 



91 



Quincy has for general purposes the income on a very small 
amount of money. Even aside from the gift of library 
buildings by one individual, public libraries are the most 
favored of city institutions by private benefactors. In 
Alton, Champaign and Ottawa, the libraries are housed in 
buildings furnished by the donor of an endowment; while 
in Alton and Ottawa, the endowment is sufficient to place 
the management independent of city control. 

TABLE 26. 
STATISTICS OF PUBLIC LIBRARIES. ILLINOIS CITIES, 1909. 





V 

c 



Renting 
Collection 


tn 

e 


Endowment 
Income 


Other Misc. 
Revenue 


Total Misc. 
Revenue 


Endowment 


Av. Daily 
Circulation 


u u 

a U 


Alton 


$ 253 


none 


none 


$2,400 


none 


$2,6 51 


$50,000 


284 


61 


Aurora 


396 


none 


none 


none 


none 


306 


none 


112 


95 


Belleville 


97 


T en 


none 


none 


none 
jen 


128 


none 


ISO 


140 
80 


Champaign . . . 


243 


none 


10 




none 


753 


10,000 


160 


77 


Danville 
Decatur 


239 

358 


none 
none 


none 
none 


none 
none 


none 
none 


239 

358 


none 
none 


270 
162 


103 
86 


E. St. Louis . 
Elgin 1 


238 

220 


none 
none 


none 
none 


none 
none 


30 
none 


268 

220 


none 
none 


352 
681 


166 

t 




5&T 


















Freeport 


79 


2 35 
18 


none 


none 


252 
none 


.730 

97 


0,925 
none 


353 
214 


82 


Galesburg 
Joliet 


370 


34i 


none 


none 
none 


179 
670 


890 
I 042 


none 


505 
186 


43 
80 


Ottawa 


89 


none 


75 


4,718 


e 


4,887 


75,000 


71 


114 


Peoria 


1,017 


none 


188 


none 


none 


1,205 


none 


679 


9 


Quincv . 


24 


none 


2? 


65 


none 


114 


none 


110 


no 


Rockford 


398 


220 


430 


none 


none 


1,048 


none 


537 


84 


Springfield . . . 
Streator 


476 
181 


none 
none 


none 
none 


none 
none 


41 
25 


517 
2O6 


none 
none 


337 
173 


153 

82 


Urbana 


40 


none 


none 


none 


none 


40 


none 


108 


76 























^Township library. 

Fines, which are first in importance of the incidental 
revenues, bear some rough relation to the number of books 
in circulation. This relationship is, however, far from 
exact, indicating probably, not a difference in the prompt- 



92 MUNICIPAL REVENUES IN ILLINOIS [452 

ness of book borrowers, but rather a variation in the en- 
forcement of library regulations. 

Six libraries rent portions of their buildings, gaining 
in two instances a considerable income by this means. 
Carnegie-built libraries are frequently larger than is now 
needed for library purposes, affording space which may be 
rental to clubs, or occasionally is occupied by the per- 
manent offices of the school board. 

It is somewhat surprising to find that only six libraries 
have introduced the "renting collection". 16 While this field 
is limited to the newest and most popular fiction, the books 
are put in circulation as soon as paid for by the rent se- 
cured, permitting the general revenues to be applied in a 
more profitable direction. The figures on the relation of 
circulation to population indicate the wide range of library 
effectiveness in the several cities. This may be due in part 
to the variation of types of population; but the library 
management cannot be entirely exonerated. 

CITY HOSPITALS. 

Public hospitals may be established upon a majority 
vote of the citizens, on a proposal initiated by one hundred 
petitioners. Except for paupers reasonable compensation 
must be exacted for services rendered. 17 An examination 
of the city reports shows no returns from this source paid 
directly to the city treasury, altho in Ottawa the sum 
of the collections was reported to the city council. The 
public hospitals in Illinois are quasi-private institutions, 
to which appropriations are made by the city, or financial 
provision is made for the care of cases for which the city 
is responsible. 

Recent legislation has also provided for the establish- 
ment of tuberculosis sanitariums and legalized a four mill 
tax for their support. 18 Services are to be free except for 

"Books rented at norninal charges. 
"Laws of 1909, p. 308. 
"Rev. Stat. ch. 24, par. 685. 



453] MUNICIPAL INDUSTRIES AND PROPERTY 93 

medical attendance and similar charges. Several cities 
have authorized such institutions but their erection is de- 
layed until financial difficulties can be cleared up. 

STREET RAILWAYS. 

There are no municipal traction systems in operation 
within the state, tho such are authorized under certain 
conditions. 19 Cities may organize and own street railways 
upon approval by a majority of the voters voting on such 
a proposition and may operate such railways when ap- 
proved by three-fifths of those voting; or the city may 
include in a franchise granted, the right to take over the 
system upon specified terms. A municipality may also 
transfer privileges acquired in one company to another, 
tho any lease of public property for longer than five 
years must be sanctioned by popular vote. In the case 
of municipal operation the charges must be sufficient to 
cover the cost of maintenance, interest charges, and to 
create a sinking fund. 

By a two-thirds vote, a city may issue bonds for the 
purchase, or the construction and equipment of street rail- 
ways; or may acquire the same by condemnation. In the 
latter case, compensation must be allowed for the value of 
existing franchises. If the system is owned by the city and 
leased to a private corporation, the rental must include at 
least interest upon the investment and a return for the 
franchise value. 

By a majority vote, the municipality may in lieu of 
bonds, issue street railway certificates running for not to 
exceed twenty years, payable only from the net income of 
the railway, and bearing interest at a rate not specified. 
These certificates may be secured by the issue of mort- 
gage or trust bonds, which can be foreclosed after default 
of interest for one year. Foreclosure carries the privilege 
of operation by the private company for not exceeding 
twenty years. Under the Mueller Law, it was provided that 

"Rev. Stat. (1908) ch. 24, par. 655 et seq.; Laws of 1903, p. 285. 



94 MUNICIPAL REVENUES IN ILLINOIS [454 

loans secured by mortgage certificates could be issued out- 
side of the debt limit ; but the supreme court has beld that 
this may not be done under the present constitution. 

Should the city operate a street railway system, there 
must be kept separate accounts showing the actual cost to 
the city, cost of maintenance, extensions and improvements, 
operating expenses of every description, sinking fund, free 
water, and free services rendered by the railway, interest, 
depreciation, insurance and exemption of taxes, of which 
an annual printed account, examined by an expert account- 
ant, is required to be made to the city council. The ac- 
counting of these various items presages the time when 
city utilities will be conducted separately and distinctly 
from one another, and independently of the city treasury; 
and when any surplus created will be devoted to the use 
of the consumers who have produced it. The rule which 
forbids cities engaging in private business for a profit, 
should enjoin their engaging in public enterprises for the 
same purpose. 20 

SEWERS. 

Sewer systems may be constructed under an act of 
1883 permitting the levying of a three mill tax for that 
purpose, 21 or they may be created under the local improve- 
ment law which permits them to be paid for by special 
assessments or general taxation. 22 There is no city in 
which a revenue is derived from the operation of sewers; 
and the method of extending the systems has been con- 
sidered under the subject of "Special Assessments". 23 

REAL ESTATE. 

Cities owning landings on navigable rivers may lease 
portions for wharfage for a period not exceeding twenty- 

"See ch. IV for tax on franchises. 
*Rev. Stat. (1908) ch. 24, par. 280. 
"Ibid. ch. 24, par. 507 et seq. 
"See chap. IV. 



455] MUNICIPAL INDUSTRIES AND PROPERTY 95 

five years. 24 Quincy has four such leases, one terminable 
by either party upon sixty days notice; one to expire in 
1912; and two to expire in 1934. The income from the 
entire number is $320 per year. Rock Island also has 
f 200 per year income of a similar nature. 

Several other cities receive a small revenue from the 
lease for space in municipal buildings, pasturage on land 
used for garbage disposal, etc. A list of these with the 
source of the income is given below: 

TABLE 27. 
RECEIPTS FROM CITY REAL ESTATE. 

Alton $167. Ground rent. 

Aurora 375. Office rent and use of polling places. 

Champaign 265. Building rent. 

Elgin 189. "Rents, etc." 

Freeport 184. "Use of polling places." 

Galesburg 231. Alley, land, and pasture rent. 

Moline 250. "Use of city real estate". 

Rock Island 1530. Rents and ground leased to railway. 

Springfield 540. "Use of city real estate". 

Urbana 52. Pasturage. 

Such small returns from city property might be con- 
trasted with the large revenues from the public domains of 
some European cities where the management of real estate 
is often an important corporate function. 

! 

OTHER CITY PROPERTY. 

Aside from the interest on city funds, a small income is 
derived from the occasional use of other city property. 
Cities may own and operate bridges and ferries, 25 charging 
a sufficient toll to cover interest, repairs, sinking fund and 
operating expenses. In Ottawa the ferry tolls amount to 
$3248 per year, while the city of Rock Island received 
until 1908 about |4000 per annum from bridge tolls. The 
bridge is now free. An obsolete provision of the statutes 

M Rev. Stat. (1908) ch. 24, par. 247. 
"Ibid. ch. 24, par. 194. 



96 MUNICIPAL REVENUES IN ILLINOIS [456 

permits cities coming into the possession of toll roads to 
continue to collect a reasonable toll, tho no new toll roads 
may be created. 

More frequent sources of revenue of this sort are from 
public markets (scale fees), use of ambulances and of city 
machinery. The following cities report incomes of this 
nature: Alton, |810, city scales; Aurora, $204, use of 
ambulance ; Belleville, $480, use of city machinery ; Bloom- 
ington, $300, from McLean County for tramp house ; Joliet, 
$84, use of steam roller; LaSalle, $112, "use of city prop- 
erty" ; Moline, $112, use of city scales ; and Streator, $18, 
for ambulance hire. Doubtless most cities have items of 
this nature, but have reported them as miscellaneous re- 
ceipts. Those given are sufficient to show the amounts and 
nature of this income. 

INTEREST ON CITY FUNDS. 

Interest on city funds is an almost unutilized source 
of city income, as a rule such revenue being considered as 
a perquisite of the city treasurer. The few cities having 
permanent funds usually receive interest at some rate, but 
the amount lost thru failure to receive interest upon cur- 
rent funds is large. Such funds, however, vary in amount, 
and their size is reduced by the gradual payments of tax 
warrants and floating indebtedness. 

In Chicago, bids are made upon the city funds and the 
council awards to the highest and best bidders in sufficient 
numbers to insure safety, bonds being given by the banks 
as security. 26 A special scheme is adopted by which each 
bank is checked against for only two months in the year 
thus permitting an uninterrupted use of city funds for at 
least five months. But by this plan only one and one-half 
percent per annum is secured. Any law relative to the 
smaller cities of the state should be sufficiently compre- 
hensive to permit the cities to borrow money for corporate 
purposes from such permanent funds as may be available, 

"Merriam, Municipal Revenues of Chicago, p. 103 et seq. 



457] MUNICIPAL INDUSTRIES AND PROPERTY 97 

from sinking funds, water funds, permanent improvement 
funds, etc. 27 Such a move would secure five or six percent 
upon these permanent funds, the present rate being about 
three percent. Or if only the varying current funds are 
available, arrangements might be made with banks, by al- 
lowing the free use of city funds during the early part of the 
calendar year, the municipality might borrow without in- 
terest when the treasury is depleted. In Elgin, by such a 
plan an average of $25,000 is borrowed each year. 

Of the twenty-four cities, only seven receive interest 
upon funds of any kind, the largest amount being $16,306, 
which is returned to Quincy upon sinking funds aggregat- 
ing $354,789. This is at a rate of about four and one-half 
percent. Five percent is received upon the larger part of 
this fund. All the interest accruing is reapplied to the 
sinking funds. On May 1st, 1909, there was a general bal- 
ance of $71,037 upon which no interest was noted. Evans- 
ton received $3063 as "interest on city funds" the same 
being applied to the salary fund. Freeport received $1916 
as "interest on bank balances." On April 1st, 1910, such 
balances were $67,534 for special assessments, plus $13,270 
for general cash on hand. As "interest on sinking funds", 
Galesburg received $1667 per year. As interest upon a "spe- 
cial bridge fund" balance of $57,101, Peoria added to that 
fund $1,001 during 1909; the interest upon a "bridge bond 
sinking fund" of $8750 was $417. As the total income of 
the city for the year is nearly a million dollars the interest 
return is inconsiderable. In Alton the city finances are 
in such excellent shape that the city was able to loan 
$30,000 of the general fund at three percent interest. In 
the above list, however, it will be noted that the return 
from interest on current funds is inconspicuous. 

The following table represents an estimate of the nor- 
mal amount of funds which lie idle in the city treasuries. 
There is shown the entire amount received during the year 
for all purposes, as well as the balance on hand at the 
beginning and at the end of the fiscal years. 

"Cf. Laws of 1911, p. 150. 



98 



MUNICIPAL REVENUES IN ILLINOIS 



[458 



TABLE 28. 

BALANCES AND RECEIPTS FOR GENERAL FUNDS, SPECIAL ASSESSMENTS AND 
SPECIAL FUNDS FOR THE YEAR 1909. 

General Funds. 1 

Balance at beginning Receipts, Balance at end 

of fiscal year. 1909. of year. 

Alton $14,286 $214,377 $69,39i 2 

Aurora 23,750 220,334 18,870 

Belleville 1,764 137,824 4J33 2 

Bloomington 21,461 265,723 19,440 

Danville 75,843 21 1,193 68,190" 

Evanston 115,412 461,875 96,576 

Freeport 6,368 111,696 13,270 

Joliet 55,062 451,238 80,090 

Ottawa 43,395 134,754 1,365 

Peoria 14,024 576,694 21,942 

Quincy 71,604 217,292 67,346 

Rockford | 17,223 494,475 21,125* 

Rock Island 6,775 "8,673 io,668 3 

Urbana 5,718 85,059 276' 

Special Assessments. 1 

Aurora see above $146,000 see above 

Bloomington $38,072 1 15,397 $69,333 

Evanston see above 126,180 7,288 

Freeport 82,230 98,414 67,534 

Ottawa 13,644 43,269 23,920 

Peoria 2,006 315,693 385 

Quincy 1,632 27,009 6,597 

Rock Island 4,520 14,491 7,097 

Special Funds- 1 

Aurora see above $69,273 see above 

Bloomington $7,392 722 $i,35o 

Joliet 78 25,574 15,552 

Peoria 66,431 12,1 13 20,603 

Quincy 354,789 16,304 37LO93 

Rock Island 24,831 63,922 24,51 1 

Grand Totals. 1 

Alton $14,286 $214,337 $69,391 

Aurora 23,750 435,607 18,870 

Belleville 1,764 137,824 4,133 

Amounts of less than one dollar not considered. 
'Includes all funds. 
*Fiscal year, 1907. 



459] MUNICIPAL INDUSTRIES AND PROPERTY 99 

TABLE 28. Continued. 

BALANCES AND RECEIPTS FOR GENERAL FUNDS, SPECIAL ASSESSMENTS AND 
SPECIAL FUNDS FOR THE YEAR 1909. 

Balance at beginning Receipts, Balance at end 

of fiscal year. 1909. of year. 

Bloomington 66,925 381,842 90,223 

Danville 75,843 211,193 68,540 

Evanston 115412 588,055 103,854 

Freeport 88,598 210,1 10 80,804 

Joliet 55, 140 476,812 95,642 

Ottawa 57,059 178,023 25,285 

Peoria 82461 904,500 42,930 

Quincy 425,826 260,605 445,036 

Rockford 17,223 494,474 21,125 

Rock Island 36,106 197,086 42,276 

Urbana 5,718 85,059 276 

These figures do not show the maximum or minimum 
amounts in the treasuries, and no general rule concerning 
the average amounts can be formulated, since the conditions 
in each of the instances are radically different. In the 
sixteen cities 28 issuing tax warrants it must be assumed 
that the treasuries are practically empty for a part of the 
year, and it is safe to conclude that a share of the sums 
paid in as special assessments are almost immediately used 
to retire assessment bonds. Delinquent assessments would 
be an exception to this rule. Of taxes and licenses, which 
form the working balances of the cities, the former come 
in over a period of the five months from January to June, 
while the latter are paid quarterly or semi-annually. 

Under the recent commission government law for 
cities, treasurers in such cities are compelled to return in- 
terest at three percent on city funds. A review of the 
workings of these cities at the end of the first fiscal year 
will give a more certain clue to the interest loss of the other 
cities of Illinois. Judging from the facts at hand, such loss 
is not less than $500 in the smaller towns; increases to 
f 1000 in cities of very moderate size ; and probably rises to 
$5000 or more in the larger cities of the state. 

"See Table 29. 



100 



MUNICIPAL REVENUES IN ILLINOIS 



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CHAPTER VI 

LOANS. 

Municipal indebtedness is of four kinds, (1) city 
bonds, for the payment of which are pledged the faith and 
credit of the city; (2) interest bearing certificates issued 
in anticipation of the collection of taxes; (3) floating debt 
in the nature of unpaid bills, cash paid by individuals in 
advance for city services yet unrendered, such as water 
rents, advances on pavement construction, etc., and lastly, 
(4) public improvement bonds issued to contractors as 
payment for special assessment work in which the respon- 
sibility of the city extends only to the collection. This last 
item is discussed briefly in another place. 1 

BONDED INDEBTEDNESS. 

By the state constitution the bonded indebtedness of 
cities is restricted to five percent of the assessed valua- 
tion, 2 which since 1909 has been one-third of the "fair 
cash value." 3 The constitution also provides that suf- 
ficient direct taxes must be raised to liquidate any bonded 
indebtedness within twenty years from the date of incur- 

'See Chapter IV. 

"Constitution of 1870, art. 9, par. 12. 

'Laws of 1909, p. 308. 

FOOTNOTES TO TABLE 29. 
'$12,681 not in the form of tax warrants. 
'Includes $200,000 school tax warrants. 
'Includes $78,800 school tax warrants. 
'See Text, page 108. 

'Itemized in year's expenditure as "bills payable". 
'Predominating interest rates are italicised. 
'Warrants carried for use of city funds. 
'Estimated. 



102 MUNICIPAL REVENUES IN ILLINOIS [462 

rence, and to pay the prescribed rate of interest. 4 It is 
further provided that bonds may be registered with the 
state auditor, 5 in which instance sufficient taxes to pay in- 
terest and provide a sinking fund are certified by the 
auditor to the several county clerks, such rates being col- 
lected as if a part of the state tax. 

The necessity for the bonded debt limit may be seen 
by referring to Table 29. Fonr cities, Bloomington, East 
St. Louis, Ottawa, and Springfield, had slightly exceeded 
the maximum indebtedness allowed, 6 while Quincy was in- 
debted to over ten percent of the equalized valuation and 
devotes twenty-seven percent of the total taxation to the 
payment of interest and the retirement of bonds. Four 
other cities had a debt of three percent, while the remainder 
were indebted to about one-half of their allowance. The 
average was three and four-tenths percent of the assessed 
valuation. 

Such a comparison of indebtedness, based upon the 
property assessment, is the most equitable one, yet it is cus- 
tomary to consider the per capita indebtedness as some 
criterion of the financial condition of a city. According 
to the census bureau, 7 there is considerable irregularity 
in the per capita indebtedness of American cities of over 
30,000 population, the tendency being to increase the in- 
debtedness with the size of the city. This tendency is also 
shown in the smaller cities of Illinois, but not to a marked 
degree. In the municipalities of over 20,000 population 
the average per capita debt was $11.005, while in those of 
a less size the average per capita debt was $9.66. Or stated 
in another fashion, the average population of the cities 
of Illinois having a per capita debt of over $7.40 was 
30,163; of those having such a debt under $7.40 it was 
18,919. In the cities of between 30,000 and 50,000 popula- 

4 Constitution of 1870, Art. 9, par. 12. 

"Act of Feb. 13, 1865; amended April 27, 1877, and June 4, 1879. 
That there is an excess in these cases is probably due to school dis- 
tricts which are not exactly coextensive with the cities. 
'Special Report, Statistics of Cities; 1907, p. 75. 



463] LOANS 103 

tion in the United States, the average per capita net debt 
is a trifle over $40.00. 8 

Bonds should, of course, be retired during the life 
time of the utility for which they are issued; and in the 
absence of exact data, the desirability of a fixed limit is 
easily demonstrated. Peoria is still paying interest on 
$42,000 of bonds representing bounties paid during the 
Civil War. The interest has amounted to double this sum, 
yet as estimated by the comptroller, a sinking fund tax 
of $2,800 per year collected for ten or twelve years would 
pay these bonds when due. 9 

That the amount of taxation necessary to retire city 
bonded indebtedness may not be excessive in any one year, 
the city of Quincy (which in 1881 was burdened with a 
debt of nearly $2,000,000 and still has a debt of over 
$600,000 ) 10 makes use of a plan which insures a bond and 
interest tax varying little in amount from year to year. 
An ordinance passed in 1899, a certified copy of which is 
on file in the office of the state auditor, outlines the amount 
to be collected each year, and provides that any surplus 
shall counteract later deficits. By this method, while the 
amount paid for bonds and interest each year varies as 
much as $35,000, the taxation decreases regularly by about 
$3,0.00. This is a rather crude use of a complicated scheme 
of debt retirement. The perfected plan would permit of an 
equal annual tax devoted in the early years to the paying 
of a large amount of interest and a small amount of prin- 
cipal, changing gradually to the larger retirement of 
principal as the amount of interest required declines. For 
example, $20,000 indebtedness at 5% interest is incurred 
by a city, and a $1,500 annual tax provided for liquidation. 
The principal for the second year is $19,500 upon which 

*Supra. cit. p. 307. This statement, however, represents only about 
84% of the municipal indebtedness of the cities concerned. The re- 
mainder, except less than one percent of floating indebtedness, consists of 
tax warrants or short time loan certificates in anticipation of taxes. 

'Annual report, 1009, p. 12. 

"Annual report, 1910, p. 25. 



104 MUNICIPAL REVENUES IN ILLINOIS [464 

the interest is $975. Therefore, $523 of the bonds may be 
retired as compared with $500 the previous year. If the 
total of bonds may be retired only at the end of a stated 
period careful actuarial work is necessary to determine the 
proper tax levy. Although this plan insures absolute jus- 
tice to the taxpayers, the difficulty of its administration 
has prompted cities to turn to other methods of liquidating 
indebtedness, one of which is the sinking fund. 

A sinking fund provides that sufficient sums shall be 
set aside from year to year, so that at the end of a pre- 
arranged period a sufficient sum shall be in the treasury 
to retire the bond issue outstanding. The fixed amounts 
to be set aside each year, dependent upon the rate of inter- 
est received upon the sinking fund, and the life of the bonds 
to be retired, have been carefully calculated, and the tables 
should be available for the use of the city comptroller. 11 
The sinking fund method of debt retirement equalizes the 
burden of the taxpayer, but is open to very decided dangers. 
Unless compound interest is paid upon the sinking fund 
the method is an extravagant one; the taxpayer not only 
pays the interest upon the bonds outstanding, but also 
loses the interest upon the cash contributed to the retire- 
ment fund. Also, owing frequently to the lack of publicity 
for municipal accounts, sinking funds are used for general 
municipal purposes. 

It is not uncommon for cities to invest sinking funds 
in their own securities. From this arises a danger, espe- 
cially in larger cities or in other communities dependent 
upon local capital for funds. If a city is required to throw 
a large quantity of sinking fund securities into the market 
in order to retire bonds of an earlier maturing date, the 
disturbance to the financial market may be serious. New 
York City, in the decade from 1950 to 1960, will be com- 
pelled to put approximately $200,000,000 of such sinking 

"An excellent set of tables will be found in Sprague's Tables of Com- 
pound Interest, Discount, Annuities, Sinking Funds and other Computa- 
tions for use in the Accountancy of Investment, published by the author 
for the New York University School of Commerce, Accounts and Finance. 



465] LOANS 105 

fund securities before New York bankers. This is perhaps 
a "far cry" to be urged for consideration in the smaller 
cities of the nation. 

The difficulties suggested have prompted municipal- 
ities to resort to the use of the simpler, but less equitable, 
plan of bonds retiring serially over a series of years. The 
bulk of the interest is borne by the tax payers in the earlier 
years; but they have the compensating advantage of using 
the utility created while it is new. Practically all of the 
Illinois municipal bonds are of this serial type. 

TAX WARRANTS. 

Tax warrant indebtedness is incurred entirely for cur- 
rent expenses, and represents how far the expenditures 
have at some time exceeded the income of the city. Table 
29 shows that the cities which are already heavily bonded 
are, with few exceptions, also issuing a large amount of 
tax warrants, though the less indebted cities are by no- 
means free. 

Such indebtedness is bad, not only because it repre- 
sents municipal extravagance, but owing to the excessive 
rate of interest which it bears. The funds for the most 
part are furnished by banks, the preponderating rate of 
interest being five percent, though as low as 4.74% was 
charged in Jacksonville, and as high as six percent in 
Springfield and Peoria. Elgin, by allowing the free use of 
city funds to banks, has been allowed to borrow $25,000 
annually from them practically free of interest. The rates 
charged are from one to two percent higher than those 
on municipal bonds, of which 46.6% are floated at 4% ; 
27.1% at 4.5% ; 14.2% at 5% ; 8.2% at 3.5% ; and .075% 
at the high rate of 6%. About 82% of the bonds outstand- 
ing are floated at 4.5% or below; while only $11,000 in 
warrants are drawing less than 5%, and these are at 4.75%. 

Before 1911 there was no statute which allowed a city 
to invest the money of its special funds in warrants or cer- 
tificates drawn against the general fund. Such a law 
secures to the municipal corporations the high rate of in- 



106 MUNICIPAL REVENUES IN ILLINOIS [466 

terest paid on temporary indebtedness, and is desirable, 
even though affecting only a limited number of the smaller 
cities of the state. 

Under the circumstances mentioned, the question nat- 
urally arises, would it not be expedient to relieve the 
necessity for the annual issue of tax warrants by the float- 
ing of a bond issue at a lower rate of interest? There are 
at least three reasonable arguments against such a process. 
In some cities the maximum debt limit has already been 
reached, so these new bonds could not be legally issued. 
Again, the presence of a large indebtedness of a temporary 
nature is a guarantee against further marked extrava- 
gance on the part of the city officials. That the total in- 
debtedness must be kept within such bounds that loans 
may be easily made prevents its growth out of the pro- 
portion to the wealth of the city. Finally, the discrep- 
ancy between the rates of interest on bonds and warrants 
is more apparent than real. 

Tax warrants represent the need of an amount of 
money for a short time, since they are usually issued in the 
winter and are retired as soon as the taxes are paid in the 
spring or early summer. Though the average life of a war- 
rant is seven months, there are reasons for believing that 
the greater amounts of money are used for a less time than 
this. For example, Bloomington, Galesburg, and Spring- 
field, all of which are heavy users of tax warrants, pay 
interest for five months or less. In order to have a suf- 
ficient sum on hand it would be necessary to issue bonds to 
approximate the amounts of warrants out, sums which, ac- 
cording to the most conservative estimates, would lie in the 
city treasuries for five months in the year. On such a 
basis, the cities would not be the losers, if they pay five- 
twelfths more for warrants than bonds. If four and four 
and one-half percent be taken as the typical bond rate of 
interest, then it would be profitable to float warrants at 
5.6% or 6.3%. Of course, in cases where the warrants are 
running for year terms, as are $200,000 of Rockford school 
warrants, funding would be expedient. 



467] LOANS 107 

In Galesburg, while school tax warrants are not issued, 
the salary warrants of the fiscal year, are drawn upon an 
empty treasury and bear interest at six percent. 

FLOATING DEBT. 

No defense can be offered for floating indebtedness. 
It is in all cases but one (see table 29) connected with 
large bonded and warrant indebtedness ; and one is entitled 
to assume that there has been at some time mismanagement 
in the conduct of the business of the cities so burdened. 
Such indebtedness emphasizes most strongly the need for 
scientific budget making in municipal business. Every 
departmental head should be required to estimate in ad- 
vance and in detail the needs for the year's adminis- 
tration. Such executives should then be required to spend 
the sums appropriated according, to the advance estimate, 
or return any unexpended balances into the general fund 
of the municipality. 

Any city working without a classified budget is as 
liable to suffer from unexpended departmental balances 
as from floating indebtedness. The two are products of the 
same cause, a poorly drawn budget. To the ordinary 
voter and taxpayer a deficit becomes known through the 
newspaper; the use of unexpended balances is not so easy 
to discover. The curious citizen may be prompted to in- 
quire of his city clerk for a statement of monthly expendi- 
tures of the several departments for the past fiscal year. 
He will be interested to note if there is a marked increase 
in departmental expenditures in October and March, 
more especially for salaries. If services were unnecessary 
ten months in the year, there should be some explanation 
if the payrolls are excessively large in the two months 
which immediately precede elections. And, if this expla- 
nation is honest, it will frequently demonstrate why de- 
partmental heads have not sufficient funds to complete the 
fiscal year. 

The indirect effect of a floating debt is even greater 
than the loss of the cash which at some time has been 



108 MUNICIPAL REVENUES IN ILLINOIS [468 

wasted. When dealers are compelled to wait an undue 
period for the payment of bills, the city business drifts into 
the hands of middlemen. These make all proper allowance 
in their prices for long waits, and the city treasury suffers 
proportionately. 

In Champaign, the f 20,000 of floating debt represented 
an unpaid light bill of nearly six months standing; while 
$20,000 of Urbana bonds in 1909 were a judgment for 
floating debt on current expenses. It may be advanced that 
owing to unexpected decreases in revenues, debts of this 
kind must occasionally be incurred. This is perhaps some- 
times true; but such losses could be anticipated and more 
adequately met if city finances were put upon the same 
sound basis that is demanded in the best private business. 

The elimination of unsecured indebtedness by this 
means, as well as the promotion of efficiency in public ex- 
penditures, would be secured if the more elementary steps 
necessary to scientific public budget making were followed : 

1. The finance committee of the city council should 
require every department head to submit an estimate of pro- 
posed expenditures for the coming fiscal year. 

2. This estimate should show all suggested expendi- 
tures classified by salaries, wages, services other than per- 
sonal, materials, supplies, equipment, structure and parts, 
land, capital outlays, fixed charges, pensions and contin- 
gencies. 12 Such a division would enable city officials to 
know the cost of a single service or supply for the entire 
city, or to compare costs as between departments. 

3. The departmental estimate should also show the de- 
partmental expenditure for the same services, etc., for 
the year previous, the expenditure of the past six months 
of the current year, the expenditure of some typical month 
of the current year, and any increase asked for next year. 

"The complete classification as suggested for the United States gov- 
ernment by the President's Commission on Economy and Efficiency may 
be seen on page 4 of their circular No. 19, to be obtained through any con- 
gressman, or the similar classification of New York and Philadelphia can 
be secured by corresponding with the comptroller of these cities. 



469] LOANS 109 

4. Such estimates should be printed in a tentative 
budget, and public hearings held where both officials and 
citizens could appear to defend or protest against suggested 
appropriations. 

5. The final revised budget having been passed, every 
departmental head should be required to regulate his ex- 
penditures as outlined, all salaries and wages to be ex- 
pended at the rate of one-twelfth or one-fiftysecond per 
month or week, except for temporary employes. 

6. Any change in the segregation of the budget should 
be made only after a vote of the city council. 

7. All unexpended balances at the end of the fiscal 
year should be returned to the treasury of the city. 

Such an outlined plan is not experimental but is in 
operation in the largest cities of the country. Not only 
are appropriations more efficiently expended, but they are 
considerably reduced when granted after public hearings. 
In a single year in New York City, surplus appropriations 
of 13,000,000 were returned to the municipal treasury, 
which, under the system in vogue in Illinois municipalities, 
would perhaps have gone to salary increases and work not 
contemplated or advertised at budget time. 



CHAPTER VII 

SUMMARY AND CONCLUSIONS. 

In the preceding text repeated comparisons have been 
drawn between the important items of revenue income 
of the several cities, especially upon a per capita basis. 
It is unnecessary to review these here, aside from stating 
the conclusions which they substantiate. The total gen- 
eral revenue, however, should be considered. This general 
revenue account will exclude the more uncertain and un- 
stable items of school revenue, road and bridge taxes, spe- 
cial assessments, and commercial revenue which is not 
net profit. The deduction of these items, all of which faiL 
to affect directly the general administration of municipal 
government, leaves a balance devoted entirely to the sup- 
port of the cities. This residual general fund for each 
city is given in table 30, with the principal component 
parts. In table 31 is shown the data in percentages. 

The minimum per capita income is $4.23. This is 
found in Champaign, one of the smallest of the cities 
studied. Similarly low per capita revenue of $4.53 and 
$4.40 prevails in Streator and Jacksonville, both small 
cities; while the largest per capita revenue, $11.74, is in 
East St. Louis, the largest municipality considered. Such 
figures indicate that there is a relationship between the 
size of the city and the necessity for increased income per 
inhabitant. This fact, with its causes, has been commented 
upon in the introduction to this study. It is not to be 
expected, however, that this rise in per capita income will 
be regularly progressive as population increases. Two 
of the smallest municipalities, LaSalle and Ottawa, have 
a per capita revenue only equaled by five of the largest 
cities of the group; while Kockford and Decatur, both 
among the larger communities studied, have about the 
minimum cost of government per resident. Setting aside 



471] SUMMARY AND CONCLUSIONS 111 

the possibility of mismanagement of city funds, this may 
mean that these smaller cities have assumed costly civic 
functions, which the larger municipalities have not as yet 
seen fit to undertake. 

Considering the twenty-four cities as a group, the 
earlier contention that with increasing population the 
municipalities must undertake activities formerly left to 
individuals, is amply borne out. Of the six largest cities 
in the list, five have a large per capita revenue, and only 
four municipalities of between seventeen and seventy-five 
thousand population have an income of less than f 6.00 per 
person. The summary table No. 32 shows graphically the 
relative rank of all the cities as regards population and 
per capita general income. 

A summary of the conclusions which have been dis- 
cussed in the text indicates the defects in the system of 
property taxation and the nature of other undeveloped 
sources of income, which it has been in part the purpose 
of this thesis to consider : 

1. There is a wide diversity among the municipalities 
of the state in the rate of assessments of both real and per- 
sonal property. In few communities is real estate taxed at 
its full cash value, while personal property escapes with 
from one-fifth to one-third of its legal burden. Undoubt- 
edly this latter discrepancy is only an unofficial recognition 
of the unfair double taxation inherent in the assessment 
of most personal property. Without entering into a dis- 
cussion of justice in taxation, it may be said that a careful 
readjustment of personalty values would add as much as 
30% to municipal incomes. 

2. The continuation of two officials for the collection of 
municipal taxes, one before and one after taxes become 
delinquent, involves an unnecessary duplication of ad- 
ministrative machinery and results in loss of efficiency and 
increased costs. If the functions of the town collector 
were transferred to the county treasurer, taxes could be 
collected more expeditiously, more completely and at a di- 
minished expense. 



112 MUNICIPAL REVENUES IN ILLINOIS [472 

3. Practically every city is collecting the maximum 
legal tax allowed for general purposes, yet there is an in- 
creasing demand that the municipalities assume new and 
expensive duties. The maximum total tax rate of three 
percent on the assessed valuation (one percent on the sup- 
posed full value) is inadequate to meet the needs of the 
modern city. 

4. The percentage of total income received by Illinois 
cities from other sources than the general property tax 
ranges from 60% in Joliet to 3% in Urbana. The large 
proportion of municipal funds derived from these mis- 
cellaneous sources in certain cities indicates the inade- 
quacy of the present system of taxation. 

5. The amount of municipal income derived from 
liquor licenses, does not depend upon the number of licenses 
issued, but with considerable uniformity varies directly 
with the cost of the license. An increase in the minimum 
cost of saloon licenses from f 500 to f 1,000 per year would 
not only result in the issue of fewer licenses, but would be 
accompanied by a decided increase in revenues. Also, of 
no inconsiderable importance is the reduction in police 
force which may follow a limitation in the number of 
saloons and their segregation into a restricted district. 

6. In cities where there is a real restriction in the 
number of saloons in proportion to the population, the 
licenses normally acquire a monopoly value. The amount 
of this monopoly value has been estimated for several 
cities under consideration. Since the municipalities have 
reduced the number of existing licenses they should pro- 
portionately increase the charge to cover any loss in reve- 
nue. A premium on saloon licenses is a criterion of such 
a loss. 

7. Municipal revenues from general license taxation 
would be increased by assessing high licenses against a few 
industries and occupations which are accustomed to license 
taxation. In numerous instances the present rates are un- 
profitably low, -and the energy necessary for a complete col- 
lection of the tax is dissipated over a wide field. It is 



473] SUMMARY AND CONCLUSIONS 113 

not infrequent that licenses fail to yield revenue because 
the licensing ordinances are too intricate to be easily ap- 
plied by the crude machinery provided for that purpose. 

8. Cities which largely utilize special business taxes 
find in them a remunerative source of revenue. In view 
of the usual under-assessment of stocks-in-trade, doubtless 
some tax of this nature is justified. Such taxes, however, 
are difficult to administer with any degree of equality, 
and there is usually local prejudice against their impo- 
sition. A trend in this direction must be gradual, begin- 
ning with those occupations which require some measure 
of sanitary or police control. 

9. One of the most profitable and equitable of tax 
returns is that from the licensing of vehicles. This tax, 
going into a special fund for the repair of streets and al- 
leys, relieves to some extent, the unequal burden imposed 
by the special assessment laws upon the property owner. 
The rates upon horse drawn vehicles are by no means 
uniform throughout the state and where the minimum tax 
is imposed, the return is not large. The tax upon auto- 
mobiles, however, can be made to return a very considera- 
ble income. 

10. Insurance brokers frequently avoid the payment 
of the tax upon the business of foreign fire insurance com- 
panies and in some municipalities the law is not enforced 
at all. This would be avoided if a nominal license fee 
were imposed upon all insurance dealers and they were 
compelled to render an annual report, under oath, of all 
business transacted. 

11. Revenues from fines and costs are restricted by 
the frequent non-assessment of fines if costs are paid, by 
failure to assess high fines, inclination to allow cases to 
be prosecuted by the state's attorney, rather than by the 
city officials, and finally the limited number of arrests 
which find their way into the police courts. 

12. Fees and departmental charges are neglected 
sources of municipal revenue, which, were they adequately 
imposed and collected, would produce an income equal to 



114 MUNICIPAL REVENUES IN ILLINOIS [474 

that obtained from general license taxes. A complete fee 
system, however, would involve not only the abolition of 
the practice of allowing fees as salaries, but the introduc- 
tion of an adequate system of accounting and control 
which would insure cities receiving payments made. 

13. Under the present prevailing system in Illinois 
by which public service corporations are usually allowed 
to fix their charges at the point of maximum profit, fran- 
chise taxes are a tax upon the profits of the corporation 
rather than upon the consumer. However, only a few utili- 
ties pay for the privileges they enjoy, and these only small 
sums. A considerable number of franchises will expire 
in the near future permitting cities to make provision for 
franchise payments. These costs may be imposed either 
as a percentage of the net or gross annual receipts or as 
an initial charge for the right to continue in business, or 
both. 

However, the number of perpetual franchises, espe- 
cially in the gas and telephone industries argue in favor 
of some form of legislative control over the prices de- 
manded for these services. Should this regulation of com- 
modity charges be brought about, any tax imposed by the 
city upon public service corporations would probably be- 
come a burden upon the consumer. The conditions require 
the careful and honest consideration of city councils and 
of the state legislature. 

14. In the operation of municipal water plants, three 
cities apparently show a distinct surplus over all charges 
and three other cities make a satisfactory financial record ; 
while seven cities have a high percentage of operating 

expenses, in two of them the operating expenses exceeding 
the total revenue. In a few cities the water rates are too 
high; but in most they are too low to meet operating ex- 
penses, thus burdening the tax payer at the expense of the 
water consumer. Estimates for six municipal lighting 
plants indicate that three have furnished street lighting 
at a cost less than the charges of private corporations. 
Were the municipalities authorized to do commercial as 



475] SUMMARY AND CONCLUSIONS 115 

well as public lighting, the costs would probably be further 
reduced. 

15. Publicly owned cemeteries have been conducted 
at a financial loss, but the sums involved are so small as 
not to demand serious consideration. 

16.i The income from real property owned by the 
municipalities is an inconsiderable part of the budgets, and 
is not an adequate return upon the value of the property 
involved. 

17. None of the cities investigated received a sufficient 
return in the form of interest upon the cash balances in. 
their treasuries; most of the cities received no interest 
whatsoever upon these funds. The annual loss is very con- 
siderable, and should be prevented by a statute requiring 
city treasurers to account for a return upon public funds 
in their possession. 

18. Considerable sums are spent by municipalities as 
interest upon short time loans made in anticipation of 
taxes. The rates of interest are higher than those upon 
bonds but since the funds are needed for only a few 
months, it is more expedient to pay a higher price for 
short time loans than to issue bonds. In some in- 
stances, however, debts of this nature might well be 
funded. A yet more profitable plan would be for cities 
to borrow from their special funds, which will insure a 
much higher rate of interest on these than is at present 
received. 

19. The keeping of city accounts upon a receipt and 
expense basis rather than by revenues and liabilities 
works to the continual detriment of administrative ef- 
ficiency. Budgets are made up on crude estimates of city 
receipts, and not upon the more correct basis of amounts 
legally accruing to the municipality over a designated 
period. This system of accounting not only prevents inter- 
ested citizens or officials from learning the exact financial 
status of the corporation, but enables executives to thrust 
the burden of extravagance or dishonesty upon following 
administrations. 



116 MUNICIPAL REVENUES IN ILLINOIS [476 

20. Less than one-half of the cities included in this 
study publish annual reports of their financial affairs, 
and in those published there is a marked lack of unformity 
as regards date of appearance, matter contained, method 
of presentation and value to the public. There is urgent 
need of some private or public body which will cooperate 
with municipal officials in applying tests of efficiency 
to city government, and making the results known through 
uniform city reports. 



477] 



SUMMARY AND CONCLUSIONS 



117 



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118 



MUNICIPAL REVENUES IN ILLINOIS 



[478 



TABLE 31. 
SOURCES OF GENERAL REVENUE, 1909, IN PERCENTAGES. 





General 
Property Tax 


i- t/j 



& _0 


Other 
Licenses 


Wheel Tax 


Foreign 
Insurance Tax 


Police Fines 


N 

<U 


Franchise 
Taxes 


Interest 


C 
a 
c 

.0 


Other 
Revenues 


Alton 


57-8 


29.4 


5-3 


.5 


1.45 


1.6 


none 


.21 


.86 


2.54 


.22 


Aurora 


Jl ' * 

70.0 


20.7 


1.63 


none 


79 


.96 


none 


1-9 


none 


" *J^ 

.19 


4-6 


Belleville . . 


54-7 


38.7 


3-2 


33 


43 


39 


72 


77 


none 


.09 


.81 


Blooming'n 


61.5 


27.8 


2.6 


none 


.61 


95 


1-35 


1-9 


none 


.81 


3-3 


Champaign . 


92. 


none 


3-79 


none 


2.12 




.42 


none 


none 


1.46 


none 


Danville ... 


56. 


36.4 


2.21 


none 


91 


3-85 


.2 


none 


none 


44 


.04 


Decatur . . . 


83-7 


none 


2.1 


none 


2.08 


3-6 


.III 


none 


none 


.24 


8.1 


E. St. Louis 


71- 


22.5 


3.56 


1.04 


175 


.178 


51 


23 


none 


039 


.485 


Elgin 


71.4 


21 .7 


1.98 


none 


.71 


.4^8 


.117 


. V) 


none 




3.38 


Evanston . . 


/ " * *T 

6 S .I 


/ 

none 


* w** 

2.67 


3-9 


" / * 

-7 


*TJ V -' 

1-59 


**/ 

1-73 


* *jy 

none 


1.48 


.843 


+j J V 

21.9 


Freeport . . . 


62.2 


22. 


1.37 


none 


99 


4.12 


none 


none 


1.78 


.09 


7.25 


Galesburg . 


91.8 


none 


1.88 


none 


1.17 


2-3 


.082 


none 


1.24 


.66 


.895 


Jacksonville. 


85.8 


none 


1.32 


3-51 


2.1 


2.73 


.607 


none 


none 


.648 


3-86 


Joliet 


4O I 


=U.6 


I .21, 


none 


813 




- 1 - 


I 36 


none 


42=; 


07^ 


LaSalle .... 


T.V * 

52.3 


*J*T * ** 

44. 


**o 
I.7I 


none 


*- /i O 

97 


573 


none 


* j v 

none 


none 


<-t** j 


y/ o 
4 


Moline 


61. 


35-8 


1-75 


none 


.803 


.236 


447 


none 


none 




none 


Ottawa 


55-7 


31-3 


533 


none 


I.I3 


.738 


.425 


2.48 


none 


6.05 


1.64 


Peoria 


65-5 


26.3 


2.3 


none 


1.41 


i. IS 


.771 


-0957 


273 


23 


1. 12 


Quincy 


70. 


21.4 


I-I45 


1.03 




1. 21 


none 


378 


4.81 


.0336 


.027 


Rock ford . . 


87.7 


none 


1.63 


none 


9 


5 


.66 


1-34 


none 


42 


8-75 


Rock Island 


64-5 


29. 


2.22 


none 


I. II 


2.03 


.855 


none 


none 




.346 


Springfield . 


64- 


23-7 


1-35 


none 


.378 


1.28 


44 


0655 


none 


.113 


8.7 


Streator . . . 


51.25 


41-3 


1-57 


none 


1.8 


1-45 


none 


-575 


none 


.312 


1-37 


Urbana 


97-6 


none 


95 


none 


77 


77 


none 


none 


none 


-0935 


none 



479] 



SUMMARY AND CONCLUSIONS 



119 



TABLE 32. 
RANKING OF TWENTY-FOUR ILLINOIS CITIES, 1909. 





c 

*3 
O. 
O 

CM 


Total Percapita 
Assessment 


Percapita Realty 
Assessment 


Percapita Person- 
[ alty Assessment 


General Tax Rate 


Percent of General 
Income from Taxes 


Percapita General 
Tax Income 


Percapita Total 
General Income 


Percapita Income 
Liquor Licenses 


Population per 
Saloon 


Peoria 


I 


6 


4 


14 


8 


ii 


7 


6 


o 


14 


E. St. Louis . . 
Springfield . . 
Rockford 
Quincy . . 
Joliet 


2 

3 

4 
5 
6 


4 
I 

21 
19 


10 

3 

i 

22 
17 


21 

7 

2 

19 
2O 


15 
7 
23 

i 
19 


8 
14 
4 
9 
24 


I 

3 
IO 
2 
23 


i 
3 
19 

2 

8 


3 
8 

19 

IO 

i 


19 
9 
I 

13 
II 


Decatur 


7 


14 


14 




10 


6 


15 


21 


15 


4 


Aurora 


8 


8 


7 


II 


9 


10 


9 


IO 


16 


3 


Danville 


o 


o 


n 


4 


16 


10 


20 


18 


7 


7 


Elgin 


10 


2 


o 


I 


21 


7 


II 


15 


17 


2 


Bloomington . 
Evanston 
Rock Island . 
Moline 


II 

12 
13 
14 


3 

15 

16 


2 
12 

18 


9 

IS 
8 


13 

6 

5 


16 

12 

13 
17 


14 
s 

13 

12 


9 

5 

12 

7 


13 

ii 
6 


8 

12 

5 


Galesburg 
Belleville .... 
Freeport 
Alton 


15 

16 

17 
18 


7 
18 


5 
16 


12 

16 
6 


12 
II 

14 
17 


3 

21 
IS 

18 


4 
18 

17 

21 


17 
ii 

14 
16 


5 
18 

14 


18 
6 

IO 


Jacksonville . 
Streator 
Champaign . . 
LaSalle 


19 

20 
21 
22 


10 

20 

5 

22 


ii 

20 

6 

21 


10 

17 

S 

21 


20 
22 

19 
2 


5 
23 

2 
22 


19 

24 

16 

22 


23 

22 
24 
13 


12 
2 


15 
16 


Ottawa 
Urbana 


23 

24 


12 
II 


19 

8 


3 

18 


4 

7 


2O 
I 


6 

8 


4 

20 


4 


17 

























BIBLIOGRAPHY 

Constitution of Illinois. 

Kurd's Revised Statutes of Illinois (1908). 

Session Laws of Illinois, 1907, 1909. 

Kales and Liessmann : Compilation of Illinois Tax Laws and Decisions* 
(1910). 

Report of the Auditor of Public Accounts (1008). 

Reports of the Wisconsin Railroad Commission. 

United States Bureau of the Census : Special Report, Statistics of Cities, 
1907. 

President's Commission on Economy and Efficiency, Circular No. 19. 

C. E. Merriam : Report on the Municipal Revenues of Chicago, City Club 
of Chicago, Pub. No. 2 (1906). 

John A. Fairlie : Report on the Taxation and Revenue System of Illi- 
nois (1910). 

Frank J. Goodnow : City Government in the United States. 

Sprague's Tables of Compound Interest, Discount, Annuities, Sinking 
Funds and other Computations for use in the Accountancy of Invest- 
ment. 

Alton : Annual Reports, 1009. 

Aurora : Municipal Officers' Annual Report, 1909. 

Bloomington : Annual Reports, 1909. 

Evanston : Annual Reports, 1909. 

Elgin : Annual Reports, 1909. 

Freeport : Annual Reports, 1909. 

Galesburg: Annual Reports, 1909. 

Joliet : Annual Reports of City Officers, 1009. 

LaSalle : Annual Reports, 1009. 

Peoria : City Comptroller's Report, 1909. 

Quincy : Annual Reports of City Officers, 1909. 

Rockford: Annual Reports, 1909. 

Rock Island : Annual Reports, 1907. 

Springfield: Annual Report of Water Works, 1910. 

Streator : Annual Reports, 1009. 



120 



INDEX 

Accounting methods, municipal, 8, 115. 
Agricultural property exempt from tax, 14. 
Alton, 40, 41, 42, 50, 62, 90, 91, 96, 97. 
Amusement licenses, see licenses. 
Appleton, Wis., 82. 
Arrests, 49, 50, 51, 54. 
Assessments, 16, 19, 20, 23; 

rate of, 1 1 1 ; 

rank of cities, 119. 

Aurora. 22, 27, 40, 50, 51, 53, 57, 62, 67, 72, 81, 89, 96. 
Automobile licenses, see vehicle tax. 

Back taxes, 25. 

Bakery tax, 42. 

Beloit, Wis., 82. 

Belleville, 40, 41, 42, 61, 96. 

Billiard licenses, see licenses. 

Bloomington, 38, 41, 48, 52, 53, 59, 62, 70, 71, 81, 89, 96, 102, 106. 

Bonded debt, see debt. 

Brewer licenses, see licenses. 

Bridge tolls, 95. 

Broker's tax, see licenses. 

Budget making, 107, 108, 109. 

Bureau of the Census, 8. 

Business taxes, 10, 41, 42. 

Cab license, see licenses. 
Capital stock, taxation of, 15. 
Cemeteries, public, 89, 90, 115. 

j-*8, ?* 89, 9*7 108-, -nor 



Champaign County, 21. 

Charges, departmental, see departmental charges. 

Chicago, 8, 12, 13, 30, 48, 96. 

Cigarette license, 40. 

City funds, 96-99; see also interest. 

City hospitals, 92. 

City property, 95, 115; see also real estate. 

Clearing house, municipal, need for, 10, 116. 

Coal dealer tax, 42, 43. 

Collection of taxes, losses in, 24. 

Commercial revenues, 58. 

County treasurers, collections by, 24. 

Cyclone tax, 13. 

121 



122 MUNICIPAL REVENUES IN ILLINOIS [482 

Danville, 25, 38, 56, 71. 

Debt, 101-107. 

Decatur, 18, 29, 30, 41, 56, 71, 72, 78, 81, no. 

Delinquent taxes, see taxes. 

Departmental fees and charges, 10, 58, 61, 113. 

Dog tax, 32, 33. 

East St. Louis, 13, 18, 21, 33, 40, 41, 42, 44, 46, 48, 50, 59, 61, 72, 81, 

1 02, no. 

Eau Claire, Wis., 82. 

Electric light, see Franchises and Lighting Plants. 
Elgin, 22, 29, 72, 84, 97, 106. 
Endowments, 56, 91. 

Evanston, 10, 18, 24, 38, 40, 43, 45, 51, 56, 57, 59, 70, 71, 78, 89. 
Exemptions from taxes, 14, 15. 
Expenditures, classified, need of, 108. 

Fees, 58, 59, 60, 113, 117, 118. 
Ferries, 95. 

Fines, police, see police fines ; 
library, see library fines. 
Fire insurance tax, 32, 45, 46, 113, 117, 118. 
Firemen's relief fund, 32. 
Fireworks tax, 42. 
Floating debt, see debt. 
Fond du Lac, Wis., 82. 

Foreign fire insurance license, see fire insurance tax. 
Foundry license, see licenses. 
Franchises, 9, 10, 15, 62-68, 114. 
Franchise taxes, 61, 63, 117, 118. 
Freeport, 24, 38, 40, 47, 50, 71, 72, 97. 

Galesburg, 18, 35, 40, 71, 72, 89, 97, 106, 107. 
Gas Works, see franchise taxes. 
General funds, 98. 
General licenses, 117, 118; 

see also licenses. 

Gifts, grants and subventions, 55. 
Gifts by individuals, 57. 
Green Bay, Wis., 82. 
Grocery tax, 42, 43. 

Hay and grain dealer tax, 42, 43. 
Hospitals, see city hospitals. 
Hotel tax, 42. 
Hydrants, 79, 80, 81. 



483] INDEX 123 

Ice dealer tax, 42, 43. 

Income, city, no, 117, 119. 

Inspections, income from, 58. 

Insurance funds, taxation of, 16. 

Insurance license, see fire insurance tax. 

Interest on public funds, 10, 13, 96, 97, 98, 99, 115, 117, 118. 

Interest on debt, rate of, 100. 

Interurban railways, see franchise taxes. 

Jacksonville, 18, 44, 50, 57, 89, 105, no. 

Joliet, 8, 9, 17, 18, 38, 40, 43, 50, 62, 79, 81, 96, 112. 

Juul law, 12, 14. 

Kane County, 21. 

LaSalle, 18, 29, 41, 49, 50, 56, 70, 72, 79, 81, 96, no. 

Libraries, 13, 18, 91, 117, 118. 

License cities, taxes in, 18. 

License districts, limitation of, 27, 28, 29. 

License revenue, 26. 

Licenses, general, 9, 30-42; 

legality of, 26; 

liquor, 9, 26-30, 34, 49, 112, 117, 118, 119. 

Lighting plants, 9, 10, 86, 87, 114. , 

Liquor license, see licenses. 
Livery stable tax, 42. 
Loans, 101, 115. 

Losses in collection of taxes, 24. 
Lots, assessment of, 20. 
Lumber yard tax, 42, 43. 

Madison, Wis., 85. 

Mains, miles of, 80. 

McLean County, 96. 

Meat dealers' tax, 42, 43. 

Meters, water, use of, 84. 

Method of investigation, 7. 

Milk dealers' license, 39. 

Miscellaneous income, 57, 58, 61. 

Moline, 22, 41, 44, 48, 96. 

Motorcycle license, see vehicle tax. 

Municipal industries, 73 ; see also water plants, lighting plants, etc. 

Mueller law, 93. 

New York City, 104, 109. 
"No-license" cities, 18. 



124 MUNICIPAL REVENUES IN ILLINOIS [484 

Omnibus license, see licenses. 

Ottawa, 21, 30, 33, 35, 40, 41, 51, 67, 81, go, 91, 92, 95, 102, no. 

Park districts, 13, 18. 

Paving, free, 64. 

Pawnbroker licenses, see licenses. 

Peoria, 13, 30, 38, 40, 41, 43, 46, Si, 52, S3, 56, 59, 62, 70, 71, 72, 80, 

103, 105. 

Peddler licenses, see licenses. 
Personal property, 9, 15, 20-22. 
Pleasure drive districts, 14. 
Police costs, 52. 

Police fines, 9, 47, 48, 49, 51, 52, 54, 113, 117, 118. 
Pool license, see licenses. 
Prostitution, licensing of, forbidden, 32. 
Property tax, theory of, 14. 
Public libraries, see Libraries. 
Public property, sale of, 58. 

Quincy, 8, 18, 22, 39, 48, 51, 56, 61, 91, 95, 97, 102, 103. 

Railroads, taxation of, 15, 20. 

Railroad Commission of Wisconsin, 77, 86. 

Real estate, taxation of, 20, 94, 95, 115. 

Real estate broker tax, 42, 43. 

Reports, lack of city, 116. 

Restaurant tax, 42, 43. 

Road and bridge tax, 24. 

Rockford, 18, 25, 29, 30, 33, 35, 40, 41, 44, 46, 48, 52, 53, 57, 62, 71, 

72, 75, 106, no. 
Rock Island, 22, 30, 35, 39, 40, 48, 95. 

Sale of public property, 61. 
Saloons, see licenses, liquor. 
Sanitary districts, 14, 18. 
School debt, see debt. 
School tax, 13, 56. 
Services, water, kind of, 80. 
Service privileges, 61. 
Sewers, 71, 94; 

see also special assessments. 
Sheboygan, Wis., 82. 
Sinking funds, 13, 103, 104. 
Special assessments, 68-72, 98. 
Special funds, 98. 
Springfield, 13, 30, 41, 43, 44, 50, 59, 62, 71, 72, 78, 79, 81, 84, 85, IO2, 

105, 106. 



485] INDEX 125 

State grants, 55, 56. 

Store goods dealers' tax, 42, 43. 

Streator, 17, 18, 27, 35, 52, 53, 56, 96, no. 

Streets, see special assessments. 

Street car license, see licenses. 

Street lighting, see Lighting Plants. 

Street railways, municipal, 93. 94; 

see also franchises. 
Subvention, see gifts. 

Taxes, assessment of, 12, 16; 

business, see business taxes ; 

collection of, n, 16, in; 

delinquent, 16; 

exemption from, 14, 15; 

personal property, 21 ; 

powers of municipalities, li; 

school, see school tax ; 

when due, 16; 

see also property, business, vehicle, etc. 
Tax income, 17-19, 24, 112, 117, 119. 
Tax rates, 9, 13, 18, 19, 112, 119. 
Tax warrants, 105, 106, 115; 

see also debt. 
Telephones, 64; 

see also franchises. 

Telephone and telegraph, assessment of, 20. 
Town collectors, collections by, 24. 
Transportation, free, 64. 
Tuberculosis sanitariums, 92. 
Tuition, 56. 

Undertaker's tax, 42. 

Unimproved property, exemption from taxation, 14. 

Urbana, 9, 18, 21, 35, 40, 43, 71, 108, 112. 

Vehicle tax, 10, 32, 43, 44, 45, 113, 117, 118. 

Water plants, 9, 10, 74-85, 114. 

Wheel tax, see vehicle tax. 

Wisconsin Railroad Commission, 77, 86. 



126 



MUNICIPAL REVENUES IN ILLINOIS 



[486 



LaSalle . 
11,537 



Peon a. 
66,950 




I 



* Reekford 

**sy8 45 < wi 

Evanston 

Klgln ^ 9> / 
aF,97fe 

Aurora. 
2.9,807 

Jo) let 
34- ,6 70 



Otta-wa. 
9,535 



14,2.53 



Bloomlntfton 
2.5,768 



Danville 



Dccatuv 



MAP SHOWING LOCATION OP CITIES STUDIED. 



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