Detailed Provisions regarding methods of Appropriations 278 ..282 APPENDIX NO. 2. ILLINOIS CONSTITUTION, Article IX......... 306 APPENDIX NO. 3. CONSTITUTIONAL PROVISIONS ON TAXATION... 309 318 B. Maryland Budget Amendment of 1916.... C. Massachusetts Budget Amendment of 1918...... 321 APPENDIX NO. 5. BUDGET PROVISIONS OF CIVIL ADMINISTRA- 322 APPENDIX NO. 6. CONSTITUTIONAL PROVISIONS ON DEBT LIMITS.. 325 I. SUMMARY Taxation. The first state constitution of Illinois had few provisions relating to taxation and finance. The article on the legislative department contained several brief sections relating to revenue bills and appropriations. A provision in the Bill of Rights laid down the uniform rule of taxation more definitely than in any previous state constitution. In practice the tax laws for twenty years after 1818 provided a crude system of classification and segregation, but a law of 1839 established the general property tax in full force. In the state constitution of 1848 the financial provisions were much more detailed. The uniform rule of taxation was continued, with additional provisions relating to poll tax, special taxes, exemptions, tax sales and redemptions, local taxation, state appropriations and restrictions on state debt. The township organization law of 1851 and a new revenue law of 1853 decentralized tax administration, and amplified the rules for the assessment of property with specific reference to intangible property. In the constitution of 1870 further details were added. Provisions relating to appropriations and state debt were made more specific. The article on Revenue was increased from six to twelve sections, with additional provisions as to special taxes, 'exemptions, limitations on municipal debts and county taxes, and for special assessments and special taxation for local improvements. Separate sections prohibit municipal aid to private corporations and state aid for railroads. and canals. Constitutional amendments have authorized special assessments for drainage districts, the Governor's veto of items in appropriation bills and additional debt for the city of Chicago and for a deep waterway. A new revenue law of 1872 further elaborated the rules relating to the assessment of property for taxation and reorganized the State Board of Equalization (established in 1867). Numerous amendments and additional tax laws have since been passed, providing for an inheritance tax, increasing the powers of county officers in the work of assessment, recognizing the practice of undervaluation and changing the basis of assessment, limiting local tax rates, establishing a state tax commission, and increasing the license taxes on corporations and insurance companies. Two early decisions of the Supreme Court of Illinois upholding tax laws indicated a liberal construction of the rule of uniformity in taxation. But in later decisions the uniform general property tax has been more strictly enforced, not alone as to all forms of tangible property but also as to intangible wealth, such as stocks and bonds, mortgages and other securities and credits. The inheritance tax has been upheld; and also special taxes authorized by section 1 of Article IX, where imposed in addition to the general property tax; but special taxes to supersede taxes on personal property have been held to be invalid. The constitutional enumeration of certain classes of property which may be exempted from taxation has been held to be an exclusion of all other subjects of taxation and a limitation on the power of the General Assembly to grant other exemptions. Provisions for vesting local authorities with power to tax for corporate purposes have been held to limit the grant of local taxing powers to locally elected municipal officers, or officers appointed in a manner to which the people to be taxed have given their assent. The provision for special assessments by "cities, towns and vilages" was held to prevent the grant of authority to levy special assessments by drainage districts; a decision which led to the adoption of a constitutional amendment in 1878 authorizing special assessments by such districts. But it has been held that park boards may be vested with power to make local improvements by special assessments. In connection with the provisions as to local improvements, the Supreme Court has held that such improvements involve the idea of permanence; that special assessments and special taxation may not. be combined for the same improvement; and that each improvement must be wholly within the limits and under the control of one municipality. Criticism of the present system of taxation in Illinois has been long continued and widespread, relating to defects in administration, failure to meet its own standard of uniformity, and injustice in the theory of the general property tax. More specifically, complaints are made of the general undervaluation of property, great inequalities in assessments, and the escape from taxation of large amounts of property. A comparison of assessed valuations with the census estimates of the true value of tangible property shows a steady decrease in the percentage of true value assessed from 1850 to 1890; and while there was an improvement for a time after 1898, there has been a renewed decline since 1904, and the "full value" assessments are less than half of the census estimates of true value. It is further clear that there is a great degree of inequality in the degree of undervaluation as between classes of property, local districts and taxpayers. Such inequalities appear even in the assessment of real estate, as between different counties, and as between farm lands and urban lots. So long as real estate is thus underassessed, the full assessment of intangible personalty can hardly be expected. More striking are the variations in the assessment of personal property. The total assessments of all personal property in 1912 were only 31 per cent of the census estimates of the true value of tangible personal property, as compared with 54 per cent for real estate. The assessments for the various items of enumerated personal property show the most absurd and whimsical variations, both as to the number and value of particular items in different taxing |