M. OTHER ISSUES: A FEDERAL ROLE IN RELIEF AND REFORM In addition to completing the questionnaire, each State was asked for comments on several broader questions, such as the role of the Federal Government in the field of property tax reform, and centralization of the assessment function in the State tax agency-one of the major recommendations contained in the ACIR 1963 report. Fewer than half the States provided comments on the question of centralization of the assessment function in a State-level tax agency. Of the 20 States responding specifically to this question, the majority favored retaining the assessment function at the local level as much as possible, or else did not foresee support within the legislature for such action any time soon, although most States did express support for increased State involvement in an advisory capacity. Only New York, North Carolina, Oregon, Vermont, Washington, Wisconsin. and Wyoming expressed support for an increased centralization of the assessment function at the State level. (In Hawaii, all assessment is carried out at the State level only.) Similarly, the majority of responses commenting on the role of the Federal Government in this area expressed hesitance over any Federal involvement other than through revenue sharing or through technical assistance and advice. Some selected comments on this point include: Governor Evans of Washington The availability of Federal revenue-sharing funds should permit the latter (State and local governments) to achieve significant relief on their own if they wish, and this is the route we are taking * * *. I am strongly opposed to a Federal grant-in-aid or incentive program designed to establish fair assessment practices ***. Governor McCall of Oregon Although I believe that the administration of the property tax must remain within the domain of local government and the States rather than the Federal Government, I also believe that the Federal Government is in a position to make a very worthwhile contribution in terms of model laws, studies to pinpoint problem areas, and studies to provide guidance toward bringing about greater uniformity in property tax laws among the States. Governor Carter of Georgia ***I believe that the major role of State government in property tax administration should be through increased technical assistance by which desired uniformity and economies can be obtained. In my opinion, the Federal Government can play an important part in this regard. For example, the Federal Government could provide more input and control over standardized mapping procedures * * *. Resources could also be made more readily available for training pro- Several States did express support, however, for some type of Federal incentive program to improve property tax administration: Governor Burns of Hawaii ***for the sake of uniformity and equity in property taxation, States rights should be set aside in favor of a limited Federal program ***. Governor Lucey of Wisconsin It would appear that Federal intervention in property tax administration, except for interstate commerce problems, should not be necessary if the States were assuming their full responsibilities ***. The experience in Wisconsin, and I assume this is true in other States as well, has been that property tax administrative reform has been thwarted by local officials and bureaucracies and special interests benefiting from underassessment. Governor Anderson of Minnesota As a minimum, either a direct Federal circuit breaker system or a Federal aid to State systems is needed. Governor Holshouser of North Carolina In my opinion, the greatest contribution the Federal Gov- IV. SURVEY QUESTIONNAIRE TO STATES V. RESPONSES TO QUESTIONNAIRE BY Responses to the questionnaire from individual States are reprinted in their entirety below. Note. In those cases where a response to a particular question was provided in the attachment of sections of a State law or constitution, the citation to the section has been noted and the attachment has been omitted. ALABAMA Answer 1 The total collections of property tax in Alabama for the fiscal year ending September 30, 1972 were: State, 34.7 millions, county, 98.7 millions and municipal, 53.4 millions, for a total of $186,850,000. We do not have final figures on collections of all taxes for the 1971-72 fiscal year. Based on collections for prior years, we estimate that total county and municipal tax collections were 564.3 millions. Total collections of State taxes were 937.8 millions making a total State, county and municipal tax revenue $1,502,100,000. Property tax therefore, represents 12.4 percent of the total. Answer 2 Local tax assessors are elected. They are not required to have any professional qualifications. Answer 3 No salary incentives are provided for special training courses. Answer 4 County boards of equalization fix property values and hear initial protests. Values as finally fixed by county boards of equalization are appealable de-novo to the circuit court of county where the property is located. A county board of equalization is composed of three members appointed by the Governor for a 4 year term, one from three names submitted by the county governing body, one from three names submitted by the county board of education and one from three or more names submitted by the municipalities of the county. Answer 5 The department of revenue prior to 1972 had statutory general supervision of the administration of the property tax in all counties, however, historically and for some practical reasons, the assistance given the counties was limited to appraisal assistance by department personnel on request by a county board of equalization. Beginning in 1972 the department of revenue has become active in the direction and supervision of a statewide reappraisal program designed to equalize tax assessments. This policy change was brought about by a court order and an act of the Alabama Legislature directing equalization of property taxes. The act of the legislature further, directs the department of revenue to maintain equalization when the in-progress revaluation program has been completed. Assessment of utility and railroad properties are made on a unit basis at the State level. Answer 6 The State department of revenue has made two statewide ratio studies, the last in 1969. There is no statute requiring ratio studies. The department of revenue will, however, at the conclusion of an in-progress statewide revaluation program establish a program under which there will be a continuous updating of ratio information in each county. The ratio study made in 1969 was made available to any interested individual or group. This study covered real property only. Answer 7 For the 1971-72 fiscal year, $690,000 was appropriated to the department of revenue to be used in the normal operation of the State property tax unit. In addition, $250,000 was appropriated to pay the cost of the supervision of the reappraisal program. The latter is a continuing appropriation to be used to maintain equalization of property tax assessments. Additional provisions were made to pay the direct costs of the reappraisal program. There are 28 professional appraisers employed by the department of revenue. Of these, three are assigned to utility and railroad appraisals, three are assigned to the appraisal of shares of stock in domestic corporations and four are in supervisory positions. The 18 remaining appraisers are assigned to field work, primarily in assisting county boards of equalization. Perhaps one half of the total number are qualified to appraise industrial property. The department of revenue is now in the process of employing not less than 12 qualified appraisers. Answer 8 No. Answer 9 All real and personal property in Alabama is subject to the property tax except (a) institutions exclusively devoted to religions, educational or charitable purposes which are granted constitutional exemptions and (b) statutory exemptions as shown by the attached material. Specifically, motor vehicles, jewelry, furs, stocks, bonds, farm equipment and machinery are subject to taxation. Answer 10 The Legislature of Alabama proposed and the citizens voted into the Alabama constitution, effective the tax year beginning October 1, 1972, a classification system dividing property into (1) farm and residential, (2) utility and railroad, (3) all property not included in classes 1 or 2. Class 3 includes personal and commercial property. The State ratios are 15 percent class 1, 30 percent for class 2 and 25 percent for class 3. The counties may assess these classes for taxation at ratios not less than 15 percent nor more than 35 percent of market value. Answer 11 Persons and classes of property are exempted from taxation on the basis of the attached material. (Title 51, chapter 2, Code of Alabama.) Answer 12 The State of Alabama does not have a greenbelt law. Answer 13 The State of Alabama does not have a law which allows credit on any other tax or any kind of refund of any other tax because of property tax paid. Answer 14 Prior to the 1972 amendment, all property, real and personal was required to be taxed on the same basis with limitations as to rates for the State and the counties and municipalities of the State. The provisions limiting rates were amended numerous times. The 1972 amendment sets out classes of property taxable on separate and different bases. This amendment also voids the rate limits fixed in the constitution and provides the procedures to be followed to increase or decrease rates in effect in each county and municipality on the inititive and action by the county, with legislative approval of an increase required. There is also provided an overall maximum effective rate. (Copies attached, article XI, taxation and 1972 amendment, Constitution of Alabama.) ALASKA Answer 1 The total revenue generated within the State of Alaska from various State tax revenue and local property tax levies for fiscal year 1972 (July 1, 1971-June 30, 1972) amounted to $119,194,233. Of this figure 23.49 percent or $28,000,000 derived from property taxes levied and collected by municipalities. The remaining 76.50 percent or $91,194,233 was State tax revenue collected from various non-property tax sources. No statistics are available at this time concerning revenue generated from the municipal sales tax. Answer 2 Local assessors are appointed by the chief executive of the municipality. Answer 3 Yes, one local jurisdiction, the greater Anchorage area borough which has a population of 110,456 (35% of the State's population) and a real and personal property tax base of $1,660,976,670 (46.6% of the State's municipal tax base) provides salary incentive for appraisers who completed periodic special training. The State does not provide any such incentives and relies completely on municipally sponsored assessor-appraiser training. Answer 4 The elected assembly or council sits as the Board for Equalization on valuation appeals. The assembly may, however, delegate this power to a board appointed by it for that purpose. AS 29.53.135. Answer 5 There is no State-level tax assessment review agency and the State does not assess, levy or collect property taxes on any class of property. The standard of value to be used by municipalities for the purpose of property assessment is prescribed in Alaska statutes as follows: |