(1) State Bates.

One of the theories advanced in explanation of the breakdown of the general property tax as applied to intangible property is that the high rates induce many owners of such property to evade the taxes. A review of the rates is, therefore, pertinent.

In 1881 the rate of taxation for state purposes, including public schools, was reduced from 50 cents to 40 cents on the one hundred dollars' valuation of property. In 1883 the constitution was amended to provide that the state rate, exclusive of the tax necessary to pay the public debt, should never exceed 35 cents, and that a separate tax, not to exceed 20 cents, should be levied for the benefit of the public free schools.1 In 1912 the constitution was amended so as to authorize a special pension tax of not more than 5 cents on the one hundred dollars' valuation of property.2

The average rate during the thirty-five years, 1880-1915, was 33.25 cents for state and school purposes combined. The average for the state or general revenue purposes alone was 17.80 cents, and the average for school purposes was 15.45 cents. In 1888 the rate for general revenue purposes was reduced from 25 cents to 10 cents, owing to a large refund by the Federal government, but it rose to 20 cents in 1889. In 1908 the rate was reduced to 6.25 cents, in 1909 to 5 cents, and in 1910 to 4 cents, as a result partly of increased valuation and partly of the huge fines collected from the Waters-Pierce Oil Company and other penalized corporations. In 1911 the rate went up to 12.50 cents, in 1913 to 23 cents, and in 1915 to 30 cents.3 Since 1913 a special pension tax of 5 cents has been levied, as well as the special school tax.

1 Laws of 1884, p. 5. Constitution, art. 8, sec. 9, and art. 7, sec. 3.

2 Laws of 1911, Reg. Sess., p. 288.

3 See Appendix, table 11, for tax rates. The tax rate of 55 cents in 1915 was forcefully and convincingly defended by Governor Ferguson in his Waco speech of June 10, 1916, as reported in the Austin American, June 11, 1916.

As showing the importance of the tax among the sources of the state's total tax receipts, the property tax constituted 56.9 per cent of the total in 1881, 66.8 per cent in 1887, 65.2 per cent in 1891, 61.3 per cent in 1901, 62.5 per cent in 1910, and 74.5 per cent in 1915.

(2) Local Bates.

Numerous changes have been made since 1880 in the taxing powers of counties, towns, cities, and other subordinate units. In 1880 the constitutional tax limit of counties was 75 cents, outside of taxes on account of interest and sinking funds, and except in the case of coast counties. The limits for towns and cities were, according to their class, 25 cents, 75 cents, and $2.50, except in the case of coast cities and except in the case of taxes for debts incurred prior to 1876.

In 1883 section 9 of article 8 of the constitution was amended so as to give counties, towns, and cities the power to levy a tax not to exceed 15 cents for roads and bridges. Also, it reduced the tax which might be levied for public buildings from 50 cents to 25 cents, and added streets, sewers and other permanent improvements to the purposes for which this 25 cents could be levied. The constitutional tax limit of counties became as a result of this amendment 65 cents as compared with 75 cents formerly, with the usual exception of taxes for debts incurred prior to the adoption of the amendment and taxes in coast counties for seawalls, etc. The statutory limit was accordingly changed and was fixed in 1884 at 65 cents.1

In 1885 and 1887 cities and towns incorporated under the general law were authorized to levy a tax not to exceed 25 cents for the construction or purchase of public buildings, water works, sewers, streets and other permanent improvements, but it was not until 1891 that in conformity with the amendment of 1883 were they authorized to levy a tax not to exceed 15 cents for roads, street and bridge purposes.2 The total taxing powers of general law cities of 10,000 population and under became thus fixed by statute in 1891 at 65 cents, except the tax for debts incurred before 1883.1 In 1889, however, a new class of general law cities was provided for under authority of article 11, section 5 of the constitution, namely, cities of more than 10,000 population. General law cities constituting this class were authorized to levy a tax not to exceed $1.75, 25 cents of which was for the purpose of taking up any floating debt contracted prior to January 1, 1889.2 In 1901 the provision of the constitution permitting coast cities to construct seawalls and breakwaters, was given statutory effect, and a tax not to exceed 50 cents, when voted by a two-thirds majority of the property taxpaying voters, was authorized.3 Legislation since 1901 affecting cities and towns has changed the population requirements of specially chartered cities and the method of adoption and amendment of charters. Until 1909 only cities having a population of more than 10,000 could be chartered by special act, but the amendment to the constitution adopted in 1909 makes it possible for cities having more than 5,000 population to be so chartered.4 Cities of 5,000 or less may be chartered by general law only.5 An amendment to article 11, section 5, adopted in 1912, gave cities of more than 5,000 population the power to adopt or amend their charters, subject to such limitations as may be prescribed by the legislature, and limited the tax which they may levy to $2.50. The Thirty-third Legislature in 1913 carried this into effect by the so-called Enabling Act.6 The commission form of government may be adopted by any general law city, and it may be secured by special law cities through adoption or amendment of their charters, but the taxing power of no city is changed by its adoption.7 A town or village which has more than 500 and less than 10,000 inhabitants may be incorporated as a town or village, and it may levy a property tax, not to exceed 25 cents.1

1 Laws of 1884, p. 67. See also Laws of 1885, p. 105.

2 Laws of 1885, p. 99. Laws of 1887, p. 37. Laws of 1891, p. 135.

1 Rev. Civil Stats., 1911, art. 925.

2 Laws of 1889, p. 3. Rev. Civil Stats., 1911, art. 926.

3 Laws of 1901, First Called Sess., p. 23. Rev. Civil Stats., 1911, art. 5585.

4 Art. 11, sec. 5.

5 Art. 11, sec. 4.

6 Laws of 1913, Reg. Sess., p. 307.

7 Rev. Civil Stats., 1911, title 22, chap. 15. Laws of 1913, Reg. Sess., p. 36.